HSBC’s “The Future of Retirement” programme is an independent study into global retirement trends. Based on the the latest issue “A New Reality” (8th Edition), the top concerns Singaporeans have are poor health and financial hardship. Every Singaporean should read this report.

HSBC launched the “JumboTerm campaign” effective 6 May 2013 to 16 August 2013.

This campaign is designed to give customers an opportunity to get a $1 million and above term protection at competitive premium rates. If taken together with existing acceleration critical illness rider which is already competitively priced, the customers will have the opportunity to have a fully comprehensive protection solution at attractive prices.

During the campaign period, customers will enjoy 30% discount for ValueTerm (Life Only) and 20% discount for ValueTerm for sum insured $1 million and above. This discount applies to the first year and renewal premium of the basic plan i.e. a perpetual premium discount.

You can contact me if you would like to find out more about term insurance plans.

I am inspired by this twitter post. Though I cannot verify if it is indeed from UBS’s report, but I agree most of the points.

A consequence of ultra-loose monetary policy

By now we all know what the world has become. By pushing risk free rates to an unprecedented low level, central banks run the risk of creating a disorderly return for many assets around the world. The real danger will come when central banks start to “normalised” their policy.

Many people mistakenly take the bankers’ words for granted, mid 2014, end of 2016, whatever. It may just come much sooner than you can imagine.

The “Five Suspects”

#1 Risk Free Rate

Treasuries or Sovereign Debts have departed from fundamental value. To accept a deal to lock your money for 30 years and get a 2 to 3 percent interest may seems insane in the past, but is reality today.

As founder of US$21 billion Elliott Management hedge fund Singer pointed out, Fed’s monetary policies are distorting the prices of long-term bonds and the global recovery. “Everyone wants a safe haven. There is no such thing in today’s markets”.

Japan’s “to do whatever it takes” to get inflated policy just make a large sell-off in JGB (Japan Government Bond) a distinct possibility.

Collapse of Japanese Government Bond

#2 Credit

In desperation to search for yield, and thanks to all the brilliant bankers, junk bond is renamed as “high yield bond” and become a “essential asset allocation” to many investors.

The junk bonds are selling at record high. on May 7, Barclays US High Yield index closed at 4.97%, the first time in market history that the average junk-bond yield has fallen below 5%. That is lower than what the Treasury’s yield used to be!

In credit space validations do not look unreasonably stretched but the lack of liquidity in the market could engineer an adjustment that looks like a bubble bursting.

#3 Physical Real Estate in Asia

You and I know about this and the government knows it too. In Singapore, it takes 7 rounds of property cooling measures to sort of slowing down the market.

But the problem is, will you swallow the fact that you missed the boat when your neighbour has just made $1m selling his house? Will your neighbour goes on exploring other investment opportunities when he thinks he is a property guru now?

If the bubble does not burst but just leak. People will just patch it up and think everything is going to be ok. We will see the how the great rotation of gold will end.

#4 A number of Emerging Market Equity

Namely Indonesia, the Philippines, Thailand and Mexico. I do not fully agree this part but I admit the volatility will be high just like initial years of China’s stock markets.

I just do not think the markets have reached the hysterical level to call it a bubble.

Stock Index Indonesia vs Singapore vs Philippines

#5 Australian Banks

I do not have much comments of the banks per se, but in general, the recent collapse of commodity price put great pressure on Australia. Australia dollar has collapsed and below US$1 now. Australia was one the few countries survived the global financial crisis well but if you read Citibank’s 145 pages report “From Commodities Supercycle to Unicycles”, you may have to worry for the Australia’s business.

Last word, take note stock markets are nearly not mentioned here.

Since 1 July 2005, each of these Medisave-approved plans have been integrated with basic MediShield to form a single integrated plan. These Integrated Shield Plans provide you with additional benefits and coverage when you opt for Class A and B1 wards in public hospitals, or private hospitalisation.

Policyholders on the Medisave-approved Integrated Shield plans retain the benefits and coverage of the basic MediShield tier, while enjoying enhanced coverage provided by their private insurers. Premiums are paid directly to the private insurers who will service all the policyholder’s needs. Similarly, private insurers will service all claims and sort out all back-end arrangements with CPF Board to include any payouts from MediShield.

Medisave can also be used to pay for premiums of these private Medisave-approved Integrated Shield plans. The Medisave withdrawal limits for Integrated Shield plan are:

• $800 per policy, per year, for those aged 75 and below next birthday;
• $1,000 per policy, per year, for those aged 76 to 80 next birthday; and
• $1,200 per policy, per year, for those aged 81 and above next birthday.

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• NTUC Enhanced IncomeShield
• AIA HealthShield Gold Max
• Aviva MyShield
• Great Eastern SupremeHealth
• Prudential PruShield

The key highlights are as below:

The new and enhanced features of MyShield Plus from July 2013.

• Guaranteed renewability.
• New Option C covers deductible and co-insurance under one policy.
• Reduced premiums for most age groups.
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• As charged after 12 months ( reduced from 24 months ) waiting period for inpatient congenital anomalies.

The new MyShield Plus Option C for deductible and co-insurance

• Option C can be offered to clients who have existing Option A or B.
• With the issuance of Option C cover,  standalone Option A or B policies will be automatically terminated.

What is the first thing coming to your mind when you read the news? Even in our small island of Singapore, we have heard several times of such ATM thefts, though in much smaller quantity, just in thousands.

What is hilarious is the first comment in the news. It was said,

“Meanwhile, the pros on Wall Street stealing the big money are laughing at these guys having to sweat for peanuts, and with much greater likelihood of prosecution!”

Several years ago, I stumbled upon this image. It is a propaganda banner put up by the police in one of the cities in China. It said, “抢劫不如去炒股” (It is better to play stocks than to rob!). Can you believe what they are promoting?

How coincidental? Or not?

Maybe more and more people start to realize that the harms done by the “financial experts” have put all the robbers and thefts to shame.

Are the criminals still live in the stone age? Look at the $2 billion loss by UBS’s rogue trader Kweku Adoboli, look at the $1.3 billion losses made by Nick Leeson in 1995 and eventually bankrupted the 233-year-old Barings Bank, ask yourself, are you in the right business?

Maybe with your intelligence and abilities, you can help the world more than you harm.

“Because their upside in the current property market is so big, the subsidy they earn getting an EC compared to the subsidy that a lower-income family, through a three-room, four-room or five-room BTO… there’s a substantial gap”

And here comes today’s headline news, “Buyers in tizzy over possible EC tweaks”. It quotes:

“It’s not right to just look at the profit we make,” said engineer Eddy Lau, 40, whose $900,000 EC unit will be ready in 2015. “We also pay more in interest over the years for the EC. For us who are sandwiched, ECs are the only option to upgrade.”

The EC scheme was launched in 1996, targeted at the “sandwiched” class of home hunters who were priced out of private property. First-time EC buyers currently receive a grant of between $10,000 and $30,000.

I told you in my previous article “When will the HDB market ‘Show Hand’?” to think out of the box. Here is the strange thing. Currently ECs have an income ceiling of $12,000. If you can buy an EC, it means your “Your average gross monthly household income” is less or equal to $12,000. And here you are buying a $900,000 house?

Use this online interactive HDB loan calculator provided by CPF,� assuming about 20% down payment is made. Every month, 35% of your household income ($4,200) has to be spent on loan repayment, and you have to pay for another 20 years till you are age 60!

You are right. You have to “pay more in interest over the years”, that is whopping $250,000 based on this calculation.

You are right. You know you are “sandwiched”.

So why do you have to “upgrade” and buy such an expensive house?

Granted, you can choose whatever lifestyle you want to enjoy, but that should not be at the cost of other tax payers, i.e. the subsidies.

Here was the the headline news of Straits Times on Saturday. “HDB resale deals at 16-year low”.

Figures released by the HDB this week showed that there were 4,335 transactions in the first quarter of this year, the lowest figure since 1997, when the HDB started revealing the numbers. On average, the first three months of every year have seen 8,000 transactions. That was nearly half of the average transactions for the first quarter of the past years!

It seems the 7 rounds of cooling measures finally spook the market and the government’s determination of bringing down the housing price is reluctantly accepted.

I had to update address for a client 3 times a year because he flipped his property that often. But he hasn’t been moving house for the past 3 years. Another client of mine has 5 properties but he has been status quo for quite some time. This appears to me a sign that the demand of resale market is diminishing.

If you have not noticed, there was another news on Saturday too, “Record 18,400 new homes to come on-stream”. It was reported that URA data showed “An estimated 18,400 homes are set to be built this year, easily eclipsing the previous high of 14,600 units built in 1997″. National Development Minister Khaw Boon Wan’s goal to make home ownership affordable and not “to walk backwards to have a day where only 20 per cent own homes and the rest are renting” seems reassuring to me that the construction of HDB will keep pace with the market demand.

I have repeatedly emphasized that you should look at property market the same way as stock market. Property market was driven up by the imbalance of supply and demand, and now the demand and supply is moving to the equilibrium.

Both the stock market and property market have been inching up with lower volume, the coming few months will be the real litmus test and the market will “show hand”.

Never mind whether you are a HDB buyer or investor or speculator (there wasn’t a clear distinction in the first place), you have to stay vigilant. Don’t just believe what you have always believed, read widely and think out of the box.

There are many free online resources like iProperty or PropertyGuru. Spend some time to check out the market information of HDB Singapore. Many people spend more time researching the latest electronic gadgets and put in less effort to study their own properties which cost their life savings.

As Mr Khaw Boon Wan put in MND’s blog “let’s talk about housing“,

“Housing concerns all of us: whether we are buying or selling… It is an emotive topic, as it is the biggest purchase in our life… We are pulling out all stops to deflate the bubble without causing it to suddenly burst. This requires skills and luck. After much effort, we are seeing light at the end of the tunnel, though we are still not yet out of it.”

Here is a real case of such fraud of Bogus claims!

In 2010, a car insurance fraud ring of 8 people were discovered to be behind an insurance scam involving staged accidents, phantom passengers and false insurance claims. Led by Phang Choon Meng, 38, this group had cheated companies, including NTUC Income and AXA Insurance, of nearly $96,000.

On occasion, Phang would stage a traffic accident by deliberately jamming on the brakes of his car in front of a lorry driven by unsuspecting foreign workers. Then he would coach his accomplices to pretend that they had been inside the car, so they could fool doctors to obtain medical certificates and file personal-injury claims.

While examining five motor injury claims, an NTUC Income executive suspected that they were fake and lodged a police report. Thus, the entire syndicate was arrested, prosecuted and charged. Mastermind Phang was jailed 27 months whilst seven of his accomplices were jailed between two and six months.

The social impact of car insurance fraud on everyone will be highlighted a program called “Car Insurance Fraudsters” which will be broadcast on Tuesday, 30 April 2013, on Channel 5 from 10pm to 10.30pm

“Seemingly surprise” to everybody, the biggest drop in gold prices since 1983 happened this week. The price of gold bullion posted its biggest one-day decline on record, falling more than $125 an ounce on Monday. The price of gold has crashed! It crashed from $1,565 to $1,355 from the close April 11 to the low April 16, that is whopping 14%!

Wow, what a big news! and the best part is, there is no consensus why this has happened.

For the whole week, you must be flooded by the news and commentaries of speculations of why it crashed, what is the impact to the world like China and India, you and me. The gold bull is over, the gold is at good price to buy, the jewellery shops lost millions of dollars, people flocking to gold smith to buy gold bar at bargain price, etc etc. You must be searching for a reason or what to do about this Gold thingy, maybe that is why you landed on my blog.

But here is the thing. Isn’t this just like another trading day for any investment? isn’t any investment supposed to go up and down? What is a big deal?

It seems people have forgotten “Gold biggest three-day slump since October 2008” in 2011 Aug. Take a snap shot of 5 year Spdr Gold shares (GLD) chart as below, does this “crash” really look that big? I’d rather think that the end of 2008 market is more volatile.

These buzzes on Gold just like any other noises in the market. Check out my previous blog articles, remember the “The sure win schemes investing in Gold” are all under investigation now? Remember some analysts’ call that gold would go up to US$2,500 in 2011? Now the Gold is only nearly half of what they have predicted.

You don’t have to take my word, but trust Goldman Sachs!� Goldman Sachs cut its gold-price view two days ahead of the start of the biggest decline in three decades. On April 10, Goldman has already cut its 2013 gold forecast from $1,610�to $1,545 an ounce and its 2014 forecasts from $1,490 to $1,350. That is why I used the word “seemingly surprise to everybody” in the beginning. “Goldman Sachs rules the world” again?

Eligible newborns will receive a $3,000 grant in two tranches � the first $1,500 after the registration of their birth, and the remaining $1,500 in the subsequent year, provided that they remain enrolled in MediShield or a Medisave-approved Integrated Shield Plan. � Newborns will receive the Medisave grant automatically after the registration of birth. �Parents do not need to apply for the grant.

This grant can help parents defray the costs of their child�s MediShield premiums, as well as other healthcare expenses such as vaccinations.

After the grant has been deposited into the child’s Medisave account, parents will receive a notification letter to inform them of the deposit.

For more information about Medisave-approved Integrated Shield Plans. Please contact me.