As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

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Value Investing
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Thursday, 3 May 2018

As Long Term Investors; We Will Do Well??? (2)

Read? As Long Term Investors; We Will Do Well???


Bruce3 May 2018 at 10:48:00 GMT+8

Uncle8888, 7.3% over 18years, HUAT!

from the info i have:
a) STI started Jan 2000 at 2231, 3573@2018/04/16, CAGR=2.6% (this however w/o dividend contribution, if assume there is so-called 'pseudo' 3% yield avg, CAGR is 5.6%)
Uncle8888's skill not bad, beat index a lot.

b) STI ETF started in 2002 April(when STI stood at 1730), based on its website info:
till 2018/04/12, 10y, 4.36%, 
since inception(11 Apr 2002) 16yr,7.52%(this includes dividend contribution)
it shows it is difficult to beat ETF fund, even though it is not time horizon exactly aligned comparison.



How to achieve 16 yr,7.52% (this includes dividend contribution) in STI ETF?

This performance of 16 yrs, 7.52% is achieved by lump sum investing at its inception or market timing at Point X. For real investing on the ground by retail investors over market cycles since 2002 by buying high and selling low or buying low and selling high over the measuring period; it is most unlikely to be able to achieve 7.52%.

Lump sum investing at the right buy price and add on accumulation of good yield over the measuring period will achieve superior return.






4 comments:

  1. I did a backtest calculation, for a no brainer annual DCA into STI ETF on every last business day of April from 2002 till 2018. Any dividends is re-invested as soon as possible.

    Surprise, surprise ... XIRR for the above dumbo method is 7.75%

    In reality will be slightly lower due to transaction costs.

    PS: For annual DCA, better to do it end of September instead. I noticed April usually tend to be the short term tops.

    For myself, when there's the next big bear ... I may allocate some portion into STI ETF and SREIT ETF. So far most of my ETFs/funds are Asia ex-Jap and US-oriented ... Singapore forms only a tiny %...

    ReplyDelete
    Replies
    1. Ya. I will do STI ETF next bear and no more guessing how is the investment return for index investors.

      Delete
    2. So far I haven't see any retail index investors showing off their multi years CAGR in the cyber space that I regularly visit. If there is any, pls provide the links.

      Delete
  2. Oh ... for the backtest I used annual contribution of $10K each time, for total of $170K.

    At the beginning of May 2018, end up with about $330K.

    ReplyDelete

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