tag:blogger.com,1999:blog-37872616.post8767451723734526694..comments2024-03-28T22:39:26.440+08:00Comments on BULLy the BEAR: Thoughts about STI part 2la papillionhttp://www.blogger.com/profile/01372278083694506953noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-37872616.post-20367869348098801182008-08-19T23:23:00.000+08:002008-08-19T23:23:00.000+08:00Hi market uncle,Thks for your visit.I do agree. If...Hi market uncle,<BR/><BR/>Thks for your visit.<BR/><BR/>I do agree. If one has to fork out cash to pay for STI ETF, then it's not worth it. But comparing to cpf rates, then you do make a sensible and logical case.<BR/><BR/>I agree that it's also very hard to find the PE of sti. It's so hard to dig out the historical PE of sti. Not easy to find at all.la papillionhttps://www.blogger.com/profile/01372278083694506953noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-10202123621456891192008-08-19T21:44:00.000+08:002008-08-19T21:44:00.000+08:00Hi La Papillion, Good analysis there. A few thi...Hi La Papillion,<BR/> Good analysis there. <BR/><BR/> A few things to build on what you've found.<BR/><BR/>1) Though the compounded 3.1% on average seems pathetic, this is already significantly higher then risk free CPF returns of 2.5% (ignoring the added 1% for the first 20k).<BR/><BR/>If one can set aside money to invest in STI index fund as long as one stuck his fund in CPF, his returns should be far greater than CPF returns.<BR/><BR/>2) The way you've calculated is for 'blind' investing, i.e. buying STI index in any year without taking into account whether STI is possibly over or under valued. What if you one invest in STI whenever its possibly undervalue, e.g the collective STI rolling P/E is below 12 and sell whenever its possibly overvalued, e..g above 18, or some other number.<BR/><BR/>Just my thoughts. I couldn't get my hand on STI rolling (collective) band p/e data over the years. <BR/><BR/>Somehow, I believe there should be a threshold for over and under value. i.e. 10th percentile p/e and 90th percentile p.e. Selling above and buying below these cut off lines should yield very attractive returns. However, the flip side is hyper boring investment experience and also requires tremendous patience. Imagine transacting STI ETF only a few times in say 30 years?Market Unclehttps://www.blogger.com/profile/13926458268187430049noreply@blogger.com