Weekly Inter Market Analysis Oct 16-2016

See previous week Weekly Inter Market Analysis.

Original post from http://mystocksinvesting.com

SPY (SPDR S&P500 ETF)

SPY broke down from the symmetrical triangle but immediately rebounded from big Rising Wedge support. Keep an eye this coming week to see whether there is a follow through of this breakdown.

  • Resistance turned support zone: 211-213
  • Rising Wedge immediate support: about 210
  • Previous Head and Shoulders neckline support: about 204.
  • Rising Wedge next support: about 200

spy-oct-16-2016

 

VIX

VIX spiked above 15 on the break down of the symmetrical triangle of SPY. Need to see whether VIX can stay above 15 in coming week.

vix-oct-16-2016

 

Sector Performance (SPDR Sector ETF)

  • Best Sectors: Utilities (XLU) +1.34%
  • Worst Sector: Health Care (XLV)  -3.13%

sector-performance-oct16-2016

 

SUDX (S&P US Dollar Futures Index)

SUDX broke out from the Symmetrical Triangle and continue to break support turned resistance at about 129.04. Currently SUDX is facing the next resistance at 130.36. Still need to wait for the retracement to confirm the breakout.

sudx-oct-16-2016

 

FXE (Currency Shares Euro ETF)

FXE broke the rising trend support. Can this be the next big move down?

fxe-oct-16-2016

 

XLE (SPDR Energy Sector ETF)

XLE is expected to trade within the up trend channel.

xle-oct-16-2016

 

USO (United States Oil Fund)

USO is just resting on the resistance. If USO can stay above this resistance (about $11.44) and make this level a resistance turned support, USO will start an uptrend.

uso-oct-16-2016

 

TLT (iShares 20+ Years Treasury Bond ETF)

TLT broke another support at 132.5 and closed just below the 200D SMA! Is the treasury bond beginning to sell off? Sit up and pay attention!

tlt-oct-16-2016

 

GLD (SPDR Gold Shares)

  • GLD broke down from the support with a gap down. GLD is currently testing a 200D SMA support. Can this 200D SMA support hold? Take note that 200D SMA is still trending up.
  • Fibonacci Retracement level redrawn for GLD. Currently GLD is also sitting on the 61.8% Fibonacci Retracement Support.
  • Expect GLD to rebound from level.

gld-oct-16-2016

 

Next Week Economic Calendar

Key events:

  • ECB Draghi speaks on Oct 18 (Tuesday)
  • Crude Oil Inventory on Oct 19 (Wednesday)
  • ECB Press Conference on Oct 20 (Friday)

economic-calendar-oct16-oct22-2016

3 Essential Questions to Investment Portfolio for Retirement Planning

Chew Hock Beng

Q1: How much savings does one need for retirement?
When to start, and much funds should be set aside per month?

retirement-nest-eggThis really depends on your lifestyle. Take your current expenses as a gauge. For basic retirement , $1,000 per month. Then you need to have some ideas how long you need this income to fund. In other words, you need to have some ideas about life expectancy. Life expectancy, on average, is around 80 years of age. 

For simple and straight-forward calculation, we do not consider inflation, so the retirement lump sum would be $12,000 x 20 yrs = $240,000 for a basic lifestyle. So if you’re considering $2,000 per month, the retirement lump sum would be $480,000.

Let’s say, a person aged 40 wanted to retire at age 65, so he has has 25 years to accumulate his retirement fund. His desired retirement monthly income is $2,000, so based on 3% inflation, it will be inflated to $4,187.56 (This is equivalent to $2,000 in Today’s Dollars) (n= 25 years, i%=3% inflation rate, Present Value = -$2,000, compute Future Value) And if he’s going to live another 20 years, i.e. age 85, the retirement fund of about $770,031 based on a net return of 3% (6% return – 3% inflation).

What this means is to have retirement monthly income of $2,000 (today’s dollars), you need to accumulate about $770,031 retirement fund by age 65 to draw down the desired monthly income to age 85.

This shall form the basis for his retirement goal planning.

Q2: Are Singaporeans saving or investing enough to have a comfortable retirement?

Personally, I don’t think Singaporeans are heading towards their retirement plan. Most people probably thought that their Central Provident Fund (CPF) could be adequate for their retirement needs. For most Singaporeans, they probably rely on CPF for their retirement. But what CPF Life provides only a basic need of about $800-$1200 monthly retirement income. 

(On how to calculate how much you need to have, please refer to Q1)

Some also feel that they could sells/downgrade their house. But the question is can they able to adapt and cope with the new lifestyle? And not forgetting to take care of our younger adult kids who might find it expensive to acquire their future dream home and set up their family.  

More often than not, most of my younger clients feel retirement is still long long long way to go. They take ownership of this reason and so they postpone their plan with this  purpose.

So if we want to retire more comfortably, we probably have to save more now and as early as you can. This is another reason on the risk of not saving enough for our retirement that naturally lead to financial disaster. And that’s the last thing we want to take ownership.
 
Isn’t it true that the only person who can take care of older person you will someday be is the younger person you are today? So the person who can take care of the older person someday in the future is the younger person we are now.
So let’s start retirement saving as soon as possible.

Q3: How can one grow the retirement nest egg through investing? What products would you recommend?

retirement-portfolio

Firstly, you need to know which assets are earmarked for. More importantly, you need to know how much of your capital assets has been set aside for retirement purposes.

We need to set up a disciplined saving program, which I call it “Save first, spend later” program.

In this program, you need to set aside a portion of your income, say 10% – 20% for this purpose, depends of your desired retirement lifestyle. Though retirement is many many many years ahead, it’s best to have an estimates of how much. This provides you a sense of certainty and gives you some piece of mind.  

CPF OA and SA could be another capital assets, after clearing your housing loan, set aside funds for children’s tertiary education, if any,  for retirement accumulation.

Another alternative for high-income earner. You may consider Supplementary Retirement Scheme (SRS). This is suitable for you who want to save some taxes and at the same time able to accumulate their retirement nest egg.

Of course, you could create a investment portfolio, after setting up your emergency fund of at least 6 months of your monthly expenses.

A low risk portfolio (20% Equity 80% Bond) or a medium portfolio (60% Equity , 40%Bond) could be a good start.

We will share more on the retirement planning  in our upcoming event on how to construct and build your retirement portfolio without losing your sleep. Please register your attendance HERE as seats are limited.

See other event here. http://mystocksinvesting.com/events/

 

 

Risk should be THE key focus, not returns

Attended a Business Conference yesterday. I summarize the key points for the investment outlook presented by Sani Hamid (Director, Wealth Management (Economy and Market Strategy) of Financial Alliance Pte Ltd).

  • Gold’s tumble is not a concern. Focus remains on gold as insurance, not a commodity nor currency.
  • Gold is the ultimate ‘anti-bubble’ amid falling bond yields.
  • There are bigger concerns:
    • Increasingly a very worrisome “dysfunctional” environment:
      – Dysfunctional Monetary Policy
      – Dysfunctional Economies
      – Dysfunctional Fiscal Policy
      – Dysfunctional Markets
  • Not a normal environment. Risk should be THE key focus, not returns.
  • Dysfunctional Economies
    • Despite low interest rates and abundant liquidity, economies remain mired in slow & low growth.
    • Current debt levels now sit at a record 225 percent of world gross domestic product, the IMF said in its semi-annual Fiscal Monitor.
    • Financial crises tend to be associated with excessive private debt in both advanced and emerging economies.
    • If companies postpone paying off debt,they could become “very sensitive to shocks, increasing the risk of an abrupt deleveraging process.
  • Dysfunctional Fiscal Policy
  • debt-gdpfiscal-policyDysfunctional Markets
    • Equity markets continue to hold up despite weak profitability and revenue growth.
    • While bond markets burst at their seems despite being a crowded trade.
  • Investment Strategy:
    • Not about timing the market but rather smoothing volatility
      • Our defensive strategy should not be confused with timing the market. Done to lower the market volatility.
      • Because clients are only human –inability to take sharp swings.

My key take away for current market condition:

  • Defensive
  • Manage Risk by portfolio diversification
  • Focus on out performers
  • Portfolio re-balancing to manage the volatility

Join the coming workshop on “How to construct your retirement investment portfolio without losing sleep?”

See other event here. http://mystocksinvesting.com/events/