Canadian Divorcee in Singapore Finds Her Investment Wings

Amy Grant, like so many married women, let her husband manage their investments. 

But in 2010, the Singapore-based Canadian couple split up.   It left Amy in a lurch.  “We used to invest with a financial advisor, but he bought actively managed funds.  I’ve learned that those are a losing proposition, compared to low cost index funds.  So I didn’t want to go back to that guy.”

To her husband’s credit, he had taught Amy that active management is a poor strategy.  And after the couple split, he left her with $185,000 in a Citibank brokerage account, based in Singapore.

“I had no idea what to do with the money,” she said. 

She started off by reading my book, Millionaire Teacher.  Next, she figured out how to diversify her assets in the lowest cost fashion, utilizing the Citibank brokerage.

“As a Canadian, I knew that I needed some Canadian exposure,” explained Amy. “But Citibank doesn’t allow access to the Toronto Stock Exchange.  I had to make do with products trading on the New York exchange.”

This doesn’t mean that she wasn’t able to build a globally diversified portfolio.   Virtually any exchange traded index fund can be purchased off the U.S. stock market.  She split her $185,000 into roughly four equal parts:

Each exchange traded index fund has a ticker symbol.  Because Amy wanted a quarter of her money invested in international bonds, she needed to figure out how much the units would cost, and how many units she could buy with her $46,200.

This is what she did:

  1. She went to yahoo.com and clicked finance
  2. Then she entered the quoted ticker symbol for the iShares S&P/Citi International Treasury bond exchange traded index fund.  The symbol is ISHG.  After doing so, she found that it cost $92.42 per share.  See image below:

ishg

She then determined how many units of her other exchange traded funds she could buy with $42,500 and she wrote them down.

Here’s what she did next:

  1. She logged into her Citibank brokerage account
  2. She clicked “Brokerage/Fixed Income”
  3. She clicked “View your brokerage portfolio”
  4. She clicked  “Trade now”

When making the first purchase, her Citibank screen shot looked something like this:

amy-graph

Where it asks for the stock symbol, Amy put ISHG.  She clicked “Buy” for her action.  She then entered “500” for the quantity of shares she wanted to buy.  And she entered the current market price (which was actually $93.36 when she shared this screen shot with me).

Amy repeated this process with each of her exchange-traded funds, until she had roughly $46,200 invested in each.

When she gets paid, this is what Amy does:

 She looks at her four exchange-traded funds and determines which one is valued less than the rest.  For instance, let’s assume that, after the first purchases cleared, her portfolio looked like this:

One month later, after receiving her paycheck, she has $6000 to invest.  She opens her account and notices that her portfolio is now allocated something like this:

Clearly, the under-weighted exchange traded fund is the Canadian stock index, based on the hypothetical example above.  Because each transaction costs her roughly $30, she makes just one purchase (the Canadian stock index) putting her portfolio closer to its original alignment.

This process is counter-intuitive, but it’s important.  Most people chase “winners” and their investments do poorly as a result.  Amy knows better.  She’ll remain disciplined, “rebalance” her portfolio by perpetually buying the lagging index, and reap the long-term rewards.

It’s great to see women empowering themselves financially. 

After all, women tend to make better investors than men.





Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I’m happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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19 Responses

  1. john says:

    I get leery when i see those "women are better than men at…"

    Do we really need to make those statements? Sure, on average, they may be "better"… I'm sure if you wrote "men are better than women at…"…BOOM, wah wah wah.

    SO there's my wah wah wah at misandry.

    • I understand your point John. But with the purpose of empowering women financially (and in most cases, their maie partners manage the money) I did want to show what the data suggests.

      Cheers,

      Andrew

  2. Phyllis says:

    Hi Andrew,

    I have read your book and read your blog. I am now constructing my own portfolio: 40% STI ETF
    30% VT
    30% CPF as bond.

    However, I have queries regarding how do i rebalance a year later? My problem is that I currently have $100K in my CPF and $25K that I bought into STI ETF and $25K into VT. How do I rebalance my CPF ? Sorry for the query because I am really at a lost. Appreciate your help.

    Thank you.

    • Hi Phyllis,

      You won’t be able to rebalance your CPF, but that’s OK. Consider it your bond allocation, and you could rebalance the other two stock ETFs between themselves. It’s OK if your percentages of fixed income and stock income don’t align exactly with my examples. Your idea to build those other two indexes, while your CPF grows risk free, is an excellent one Phyllis. Well done!

      Andrew

  3. Dusty says:

    Hi Andrew and fellow readers,

    First off Andrew a big thanks to stopping me from making what would be the worst financial mistake of my life!

    A few weeks ago I was approached by an agent of Zurich International with one of their retirement deals. Lucky for me, I researched a bit and came upon your wonderful website and advise which means I will now steer well clear of above mentioned conmen!

    I bought your book ( and read it in one sitting!) and found out with interest about couch potato investing. I tried to open a DBS vickers online brokerage account but was denied??? I am a Kenyan living and working in Doha, Qatar maybe that’s what triggered alarms? Haha.

    On the serious side, I also found out about 8securities in HK and was considering opening an account with them. Have you heard of them? If not, any direction you (or any other sage individual) could point me in based on my nationality?

    Any advise is highly appreciated.

    Thank you,

    Dusty.

    • Hi Dusty,

      I’m glad you found the book useful. I don’t know much about the Hong Kong platform you mentioned, but I believe that if you give DBS Vickers another try, you might get lucky. Many of their reps seems to say “no” when they don’t know that foreigners (other than Americans) can open such brokerage accounts via another country. Many of my readers have done so….and many that have done it, were initially turned down. Often, they’re turned down by someone at the bank who doesn’t know, or is just plain lazy. If you try again, please keep me posted.

      Andrew

    • Dusty,

      Here’s a reader who opened the DBS Vickers account with success, from Japan.

      https://andrewhallam.com/2013/05/an-expat-canadian-in-japan-finds-a-way-to-invest/

  4. Julie Ryan says:

    Hi Andrew,

    I was in the audience when you came to talk at UWCSEA Dover recently and after your talk I bought your book and shortly afterwards told my finance guy that I wanted to fully surrender my Generali investment portfolio. This wasn’t exactly smooth sailing!

    The main thing that riled me was that I was told by Generali that as I was taking an ‘early’ encashment , there would be a discontinuance charge of around 5% of the nett value of the policy. I had no idea that my portfolio was for a fixed term of 8 years -this hadn’t been mentioned when I met face to face with my finance guy to sign the encashment papers. On querying this, I was told by my advisor that this had been explained to me at the outset of the portfolio – a portfolio that began about a month after my husband had passed away 7 years ago. I don’t remember very much at all around that time let alone a ‘small’ detail concerning my “available whenever you want your funds” policy actually having a fixed term…call me stupid!

    Although I am still awaiting the 20% balance of my funds (and been told this could be months way) I want to get started with a DBS Vickers account. Apart from placing funds in the Singapore Bond index, Singapore Stock Market Index and the World Stock Market Index, I am not sure where else I should look to invest. I have a home in Australia (with a mortgage) and am a NZ/British citizen.

    Any advise would be gratefully received!

    • Hi Julie,

      I’m sorry to hear about your experience. Unfortunately, it’s all too common. The reps rarely divulge everything, and this kind of exploitation needs to stop.

      But moving on….

      Consider where you may want to retire. If it’s Australia, you could build a portfolio like this:

      Global stock index
      Australian stock index
      International bond index

      If you decided to retire in the UK, you may want this option:

      Global stock index
      UK stock index
      International bond index

      You could have an allocation in bonds equal to your age, and split the rest between the other two indexes. This would give you full global diversification, with a bias towards the currency that you’ll likely be paying future bills in.

      If you don’t know where you’ll end up, you could just opt for two indexes: the global stock and the international bond. THose ticker symbols are VT, for the global stock index, and ISHG for the international government bond index.

      Please tell everyone you know about your experiences with the firm you were using. I know that people don’t like to talk about money, but especially in this case, they must. I’ve started to write a book on expat investing because these stories are crushing me. And if we can educate more people, we can stop the exploitation. Again, I’m so sorry to hear about your experience Julie.

      • Kelly says:

        Hi Andrew,

        I am really looking forward to your second book. I am an Australian/Canadian citizen living in the United Arab Emirates. I have worked here for nearly 4 years and have a pile of money sitting in the bank not doing much. I wanted to invest some and nearly fell into the actively managed fund trap. Luckily, when I googled Friends Provident, I came across your website! So I bought your book and regularly read this blog and now have the confidence to manage my own money.

        So many people I know here have put a lot of money into investment plans with Generali and Friends Provident. It’s funny, because people I know who actually sell the FP products tell people to stay away from Zurich International because they’re ‘bad’. And it’s sad too because some of my friends have bought actively managed funds because a close friend of theirs (who is also a financial advisor) recommended it to them. It seems to me that the only investment options here are actively managed funds.

        I don’t have high hopes for finding a good company to invest with here, so I am planning to open a brokerage account with DBS Vickers in Singapore. I hope that by following the experiences of some of the people on this blog I will manage to open an account without actually having to fly to Singapore.

        Thank you for all the advice you give on this blog and for allowing so many people to share their financial experiences with us. I’ll definitely be buying your new book!

        • Thanks for sharing your story Kelly. Getting the DBS Vickers account going will take a bit of legwork, but once you get it sorted out, you’ll have flexibility, diversification, and you’ll be paying much lower fees. Thank you for the encouragement. The more I hear from people like you, the more inspired I am to get this book of mine finished. Thank you! Andrew

  5. Julie says:

    Hi Andrew,

    Thanks for directing me to previous articles. I hope you don’t mind me asking you another question but I am a little confused!

    I believe that I will ultimately retire in Australia and following the advice that you have given in another article, I believe that I should place about 50% of my funds in the Australian market. I was told by DBS Vickers yesterday that for me to trade in the Australian market, I need to go through a DBS broker. I cannot have a broker for just one market so if I request a broker, he/she will assist me across all markets and I will be charged a higher commission rate as a result. Would you advise me to go ahead and invest in the Australian market or stick only to the markets that don’t require me using a DBS broker?

    Regards,
    Julie

    • Hi Julie,

      THe DBS rep you spoke to can’t see the forest through the trees. You can buy an Australian stock market ETF (as I showed on the investing for Australians section on my site) off the U.S. exchange. The New York stock exchange, for example, is like an uber-diverse supermarket, allowing you to buy almost anything. I provided ticker symbols in my articles for Australians, which you can access from the Investing tab at the top of the blog.

  6. Julie says:

    Thanks so much for your time and advice Andrew – much appreciated.

    Regards for now,

    Julie

  7. James Dykman says:

    Hi Andrew.

    Huge supporter and advocate!

    I’m a Canadian based in Bangkok, married locally and plan (at the moment) to retire here. Read your first book and took action last fall. Opened my brokerage with Citi Singapore and have started my couch potatoe portfolio based in the NYSE. I’ve just read in your new book regarding that investments over 60,000 become taxable if based in US products. I’m not quite at that amount yet and would like to make sure that if I need to I shift my market. Does this apply to Canadians as well? Wonring is I should start purchasing products on the HKSE. I chose Citi because their infrastructure seems more useable the DBS, their not custodian (which I think means I have more fund ownership security), I’m able to maneuver funds easily and host several currency accounts. Are there reasons you do not reference/recommend Citi as a brokerage of choice? Should I squash what I’ve got going at this early stage with Citi and move my brokerage? Although that is no immediate plan to retire in Canada, perhaps want to leave that option open and purchase products through TO… Hum. Any insights would be greatly appreciated.

    • Hi James,

      If you own U.S. domiciled ETFs, your heirs may have to pay U.S. estate taxes if you die with more than $60,000 USD in the account. Odds are, if you’re using Citi, you are trading on the U.S. market. If Citi allows access to the Hong Kong markets, that would be a safer bet. If they don’t, consider TD Direct International. They have recently reduced their fees. And from there, you could buy Canadian domiciled ETFs, eliminating any risk of U.S. estate taxes.

      Cheers,
      Andrew

      • James says:

        Great thanks for the quick response! I will look at HK efts for future purchases. Any interest to speak to international school teachers and other expats here in Bangkok?

        • Hi James,

          If you can arrange accommodation and flights, I can come to Bangkok. To make it most worthwhile, I have found that putting on sessions from Monday to Friday are best. They include sessions that include how much people should be saving. Then the investment sessions are tailored to people of different nationalities: Americans one day, Canadians another, Aussies another etc.

          • James says:

            When we get back to school, I’ll have a chat with our professional learning director. Cheers!

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