The Dangers of Eating Late at Night

By JAMIE A. KOUFMAN
OCT. 25, 2014

ACID REFLUX is an epidemic affecting as many as 40 percent of Americans. In addition to heartburn and indigestion, reflux symptoms may include postnasal drip, hoarseness, difficulty swallowing, chronic throat clearing, coughing and asthma. Taken together, sales of prescribed and over-the-counter anti-reflux medications exceed $13 billion per year.

The number of people with acid reflux has grown significantly in recent decades. Reflux can lead to esophageal cancer, which has increased by about 500 percent since the 1970s. And anti-reflux medication alone does not appear to control reflux disease. A Danish study published this year concluded that there were no cancer-protective effects from using the common anti-reflux medications, called proton pump inhibitors, and that regular long-term use was actually associated with an increased risk of developing esophageal cancer.

What is responsible for these disturbing developments? The answer is our poor diet, with its huge increases in the consumption of sugar, soft drinks, fat and processed foods. But there is another important variable that has been underappreciated and overlooked: our dinnertime.

I specialize in the diagnosis and management of acid reflux, especially airway reflux, which affects the throat, sinuses and lungs. Airway reflux is often “silent,” occurring without telltale digestive symptoms, like heartburn and indigestion. Most of the tens of thousands of reflux patients that I have seen over the last 35 years are well today because I treat reflux by modifying my patients’ diets and lifestyles.

Over the past two decades, I’ve noticed that the time of the evening meal has been trending later and later among my patients. The after-work meal — already later because of longer work hours — is often further delayed by activities such as shopping and exercise.

Typical was the restaurateur who came to see me with symptoms of postnasal drip, sinus disease, hoarseness, heartburn and a chronic cough. He reported that he always left his restaurant at 11 p.m., and after arriving home would eat dinner and then go to bed. There was no medical treatment for this patient, no pills or even surgery to fix his condition. The drugs we are using to treat reflux don’t always work, and even when they do, they can have dangerous side effects. My patient’s reflux was a lifestyle problem. I told him he had to eat dinner before 7 p.m., and not eat at all after work. Within six weeks, his reflux was gone.

In my experience, the single most important intervention is to eliminate late eating, which in the United States is often combined with portions of large, over-processed, fatty food. Europeans have fewer cases of reflux than we do, even though many of them eat late. That’s most likely from portion control. In France, for example, a serving of ice cream is typically a single modest scoop, while in America, it’s often three gargantuan scoops.

For my patients, eating late is often accompanied by overeating, because many skip breakfast and eat only a sandwich at lunch. Thus the evening meal becomes the largest meal of the day. After that heavy meal, it’s off to the sofa to watch television. After eating, it’s important to stay upright because gravity helps keep the contents in the stomach. Reflux is the result of acid spilling out of the stomach, and lying down with a full stomach makes reflux much more likely.

And if you add an after-dinner dessert or bedtime snack? Again, reflux is a natural consequence. In a healthy young person, the stomach normally takes a few hours to empty after a moderate-size meal. In older people or those who have reflux, gastric emptying is often delayed. Further, those dessert calories tend to be high in carbohydrates and fat, and high-fat foods often create reflux by slowing digestion and relaxing the stomach valve that normally prevents reflux. Other popular but notoriously bad-for-nighttime-reflux foods and beverages are mints, chocolate, soft drinks and alcohol.

Many of my patients find that eating earlier alleviates their allergies, sinusitis, asthma, sleep apnea and diabetes symptoms. Although these conditions may not seem linked, postnasal drip and a cough are typical reflux symptoms that can easily be mistaken for something else.

Some of my patients who arrive complaining of reflux already eat healthfully. For them, dining too late is often the sole cause of their problem. And yet, hearing that they need to change the timing of their meals is sometimes a challenge they cannot meet.

A New Yorker with reflux came to see me because both her father and uncle died of esophageal cancer and she was afraid of getting it, too. This patient was a prominent businesswoman and her nightly routine included a 9 p.m. dinner at an elegant restaurant with at least two bottles of good red wine for the table. Her reflux was serious, and I explained that changes were needed.

She listened, then left and did not come back to see me for a year. When I saw her again, she explained what had happened. “For the first two months I just hated you,” she told me, “and then for the next two months — I was having some trouble swallowing — I figured I was going to die of esophageal cancer.” Then she nudged me and added, “You know, we’re the reason that it’s not so easy to get 6 p.m. reservations at the good restaurants anymore.”

To stop the remarkable increase in reflux disease, we have to stop eating by 8 p.m., or whatever time falls at least three hours before bed. For many people, eating dinner early represents a significant lifestyle shift. It will require eating well-planned breakfasts, lunches and snacks, with healthy food and beverage choices.


Jamie A. Koufman is a physician in New York who specializes in voice disorders and acid reflux.

Link
http://www.nytimes.com/2014/10/26/opinion/sunday/the-dangers-of-eating-late-at-night.html?_r=0

許達夫醫師抗癌法

台灣腦神經外科名醫許達夫目前已經幫一萬多位病患開過腦部手術，但是他自己卻被醫師宣佈罹­患癌症活不過三年，七年過去了，仍然非常的健康，他還向氣功大師學了一套平甩功，他要­分享抗癌結合中西醫的自然療法.

Taiwanese Neurosurgeon, Dr. Shu was diagnosed with 3rd-stage colorectal cancer back in January 2003, but he managed to survive without devastating surgical procedures. Hope his story will inspire those who are fighting cancer.

我是名醫 我對抗癌症(Video in Chinese)


LINK
許達夫醫師自然醫學醫療網
http://www.nsshu.com/front/bin/cglist.phtml?Category=119471

Letter to Cancer Patients (English)
http://www.nsshu.com/front/bin/ptlist.phtml?Category=325031

Arm Swing QiGong(甩手功)
http://www.nsshu.com/front/bin/ptlist.phtml?Category=420577


抗癌资料，来自：约翰·霍普金斯大学
Cancer Information from Johns Hopkins University

癌細胞最重要的食物---糖(Video in English/Chinese)

Iskandar: Too many homes, too soon?

Recent news about mega developments in Johor's Iskandar region has investors asking: Will there be an oversupply of homes? Perhaps. But no one knows for sure because no good data exists.

The Straits Times - July 8, 2014
By: YASMINE YAHYA FINANCE CORRESPONDENT

IT HAS been touted as an affordable real estate investment destination in an up-and-coming market, an attractive alternative to Singapore's pricey housing scene.

But property buyers in Iskandar are now facing two big investor problems: a potential oversupply of homes and an inadequate supply of property data.

The Iskandar region encompasses an area of more than 2,000 sq km in Johor. It covers the city of Johor Baru and the adjoining towns of Pontian, Senai, Pasir Gudang and the construction of a new administrative capital in Nusajaya.

Mainland Chinese developers have been launching mega housing developments, with thousands of units each in the Malaysian territory, sparking fears that a supply glut might dampen residential prices and rents.

Complicating the situation is a dearth of data about Iskandar's property sector, underlining the risks of investing in a market less transparent than Singapore's.

Basic data such as the volume and value of home sales, average transaction prices and average rentals are not easily available. Neither is information on the homes being built, launched or completed in Iskandar alone.

Sudden policy changes, such as additional taxes or restrictions on foreigners' purchases, add to the confusion because they are not always communicated clearly.

Without comprehensive data compiled by a central authority, it is next to impossible to assess the true health of Iskandar's property market. There is a dire need for more public and timely data on the market situation.

Massive supply
WHAT little is known now seems to point to a looming oversupply of homes in Iskandar.
As at the fourth quarter of last year, there were 118,191 homes under construction in Johor state, where Iskandar is located, and another 168,371 planned, according to the Malaysian government.

To put this in perspective, Singapore - which has a population of 5.3 million, compared with Johor's 3.5 million - had about 67,000 homes under construction and another 6,000 planned, as at the first quarter of this year.

The massive upcoming supply in Iskandar is a result of hefty investments in the property sector in recent years.

Of the RM131.6 billion (S$51.5 billion) in committed investments Iskandar attracted between 2006 and December last year, a quarter went to residential property developments - surpassing the combined total of investments in the retail, industrial, education, finance, creative, emerging technologies, health-care and logistics sectors. Another 36 per cent came from manufacturing, and the remaining from the government and utilities.

This year, there have been even more property investments.

Country Garden, which last year launched 9,000 units in Danga Bay at one go, is developing a 2,000ha island off Tuas that will be nearly three times the size of Ang Mo Kio housing estate and 10 times that of Danga Bay.

Dubbed Forest City, the man-made island is to be a tourist destination with luxury homes. It will take 30 years to build.

Guangzhou R&F Properties is also at work on a massive integrated development that is said to be almost as big as the entire residential zoning area of the Kuala Lumpur city centre.

This R&F Princess Cove project will include about 3,000 apartments in 15 blocks in its first phase, to be completed in 2017, but Malaysia's The Star newspaper reported that the developer could launch as many as 30,000 homes in all.

Another 80ha of Iskandar land have been snapped up by other China players, including Shanghai-based Greenland Group and Zhuoda Real Estate Group, as well as Hao Yuan Investment, which is based in Singapore but controlled by mainland shareholders.

Cooling demand
THESE figures have left some observers predicting a glut of homes. Units being built now will be ready in about three to five years' time. But investments that create jobs may take years longer. Who will live in the homes then?

Current projects also face falling demand in the wake of property cooling measures introduced by the Malaysian government last year. The curbs include property gains taxes as well as minimum purchase amounts and stamp duties for foreign buyers.

"Developers who expected to sell out by now still haven't," says property agent Ryan Khoo. "Country Garden Danga Bay is one. It has hovered at about 60, 70 per cent since August last year."

He adds: "Sales have definitely dropped since the introduction of the cooling measures and because there are a lot more choices on the market, property buyers have become very cautious."

Newer projects have also taken a hit. UEM Sunrise's Almas Suites, for example, saw an initial take-up rate of just 15 per cent, according to reports last December. By the end of June, sales reached 25 per cent, UEM Sunrise says.

A report by Maybank analyst Wong Wei Sum in January highlighted fears of oversupply.
"The primary concern here is that these developers could deluge the market with a massive supply of high-rise mixed-development projects... if there is no synchronised planning and control by the authorities," he says.

Mr Getty Goh, director of property research firm Ascendant Assets, notes that condominium sales in Johor Baru fell 37 per cent from the last quarter of last year to the first quarter of this year.
"All you need to do is to drive around Iskandar Malaysia and you can see that there are many units still vacant," he says.

The seemingly disproportionate tilt of investments towards property rather than business activity, apart from manufacturing, also raises the question of whether there will be enough rental demand from incoming workers to fill up the tens of thousands of homes that will be completed over the next few years.

"You'll have to search really hard to find the answer as to where all the occupants, whether Singaporeans, Malaysians or expatriates, are going to come from," says Mr Colin Tan, the director of research and consultancy at Suntec Real Estate Consultants.

Still, some investors believe Iskandar continues to hold promise.

Real estate agent Germaine Ng, who owns a condo unit in Iskandar that she is considering renting out, says: "Rental demand could come not just from expatriates working in Johor but also those working in Singapore who would like more space and the lifestyle in Iskandar."

Although the market is a tad quieter these days, she says home buyers are still keen on Iskandar, as "prices here are stabilising and still attractive because of the weak ringgit. For about $400,000, you can get a semi-detached house."

Not all property buyers in Iskandar are speculators looking for a quick profit, she adds.
Those seeking a weekend or retirement home are unlikely to dump their properties if the market heads south, minimising the risk of a downward market spiral.

Some segments of the market - such as landed property - may also be less at risk of oversupply, says investor Mohd Mokhtar Mohd Amin, who bought a landed home in Leisure Farm last year.

"There might be an oversupply of condos in Iskandar now but if someone is looking to rent a resort-style landed home like the ones in Leisure Farm, their choices would be limited," he says.

The information gap
BUT what would really ease investors' fears is a more accurate picture, based on hard data.
Unlike in Singapore, property developers in Iskandar are not required to disclose sales or rental updates. Often, they simply refuse to reveal how many units they have sold at their launches, so it can be hard to estimate the success of their projects.

Even macroeconomic data is difficult to come by. The Iskandar Regional Development Authority releases quarterly figures on investment in the region but not data on job creation or population growth. All analysts have to go on is an estimate that Iskandar's population, now at 1.6 million, will rise to three million by 2025.

In such a market, there is little to prevent property players from making promises that might not be sustainable - and would-be buyers from being led astray.

It is not uncommon, for example, to see advertisements for Iskandar condos offering guaranteed rental returns of 10 per cent to 15 per cent over two years.

But critics have pointed out that once this guaranteed period is over, there is no knowing whether the units being advertised can attract such high yields in the open market.

Without regular and comprehensive updates from a central authority, even the most educated estimate about the health of the Iskandar property market remains just a guess.

In its ambitions to develop Iskandar into a world-class city and financial centre, it might be timely now for the Malaysian authorities to consider issuing such updates on a regular basis.

This would not only help investors make more informed decisions but also create a more transparent and level playing field, maintaining investor confidence.

How interest rate rise affects Reits

Investors may be hit by lower distribution income and a fall in asset values, say BENJAMIN TAN and SHAUN CHIA
 
The Business Times - June 23, 2014
 

How interest rate rise affects Reits
SINGAPORE real estate investment trusts (SReits) have long been identified as an instrument providing decent returns for investors. As with investments in stocks, bonds and properties, SReits are not spared from the effects of the expected rise in interest rates in the market.

The price of SReits have been volatile over the past year, correcting about 20 per cent from highs last seen in May 2013 after the US Federal Reserve announced a scale-back of stimulus which in turn heightened the likelihood of higher interest rates.

SReits then bottomed out in February and have gained about 10 per cent as investors piled back into high yielding assets, the rise coming because of optimism that rates may not rise as quickly as thought.

For investors, understanding the impact of rising interest rates on their investments and what Reit managers have been doing to hedge against rate hikes as part of their capital management is crucial to evaluating Reits as an investment in one's portfolio.

A rise in interest rates can affect Reits in three ways:
* Rising rates increase the cost of debt financing,
* Rising rates cause an increase in expected dividend yield, and
* Higher rates also cause a decrease in the market valuation of the underlying properties.

First, rising rates can lead to higher interest payments on floating rate debt. This ultimately affects what the investor gets in terms of distributions.

As Reits finance their assets by debt, fluctuations in their borrowing rates would have a significant impact on distributable income to investors. On a per-unit basis, this is known as distributions per unit (DPU).

Distributable income is arrived at after deducting interest payments on debt and administrative costs, as well as taxes, from net property income. Sometimes, distributable income also includes a return of capital.

Though interest rates are likely to stay near zero in the short term, it is foreseeable that they will rise over the longer term as the US economy recovers.

Assuming that all other factors remain constant, an increase in financing costs will lead to a drop in distributable income.

To illustrate the impact, let us assume a Reit that has an outstanding debt of $300 million payable at a current floating interest rate of 3 per cent per annum and a net property income of $80 million.

After deducting annual financing costs of $9 million (3 per cent of $300 million) from net property income, and assuming no tax effects or other management expenses, distributable income will be $71 million.

However, if rates rise by one per cent, financing costs will rise to $12 million (4 per cent of $300 million) and distributable income will correspondingly fall to $68 million.

This results in a 4.2 per cent drop in DPU for unitholders.

Second, Reit investors expect a higher distribution yield when risk-free interest rates or government bond yields rise.

The expected distribution yield of Reits is largely determined by the spread above the yields of government bonds that are currently traded.

The average spread between SReit and 10-year government bonds has widened from 3.7 per cent in May 2013 to the current 4.2 per cent.

Given that the yield on a 10-year government bond is about 2.4 per cent, this means the collective basket of SReits trades at an average yield of about 6.6 per cent, compensating an additional 4.2 per cent to investors of SReits.

Capital losses
SReits, after all, are higher investment risks compared to triple A-rated Singapore government bonds.
The widening spread signals the increased risk profile of SReits, as investors require higher returns in order to be adequately compensated for bearing additional risk.

For potential investors, higher spreads are good news. They can invest at higher than expected distribution yields and get a better return on what they invested.

But higher spreads are unfavourable for existing investors who have invested when bond yields and average spreads were low.

As expected distribution yield rises, price falls, assuming DPU remains constant.

For example, a Reit that has an annual DPU of $0.05 yearly and a current share price of $1 has a current yield of 5 per cent.

If its expected distribution yield increases to 6 per cent, new investors will only buy the Reit if it can provide a 6 per cent return.

At a $0.05 DPU, a 6 per cent return can only be provided when the price is $0.83.

This means the Reit's share price is expected to decrease from $1 to $0.83 to reflect the change in expectation of a higher required distribution yield.

Investors may thus suffer capital losses on their investments in the event of an actual interest rate hike caused by an increase in expected distribution yield.

Third, higher rates will decrease the market valuation of underlying Reit properties.

As future cashflows of the properties are subjected to a higher required rate of return due to the increased cost of financing, this will result in a lower valuation of the underlying property portfolio in Reits.

For example, a cashflow of $100 next year at a required return of 5 per cent will be worth $95.24 today and $94.34 at a required return of 6 per cent.

The lower market valuation of property assets can complicate a Reit's ability to obtain refinancing.
As Reits are financed by taking on leverage against the valuation of their properties, a decrease in market valuation will result in a rise in their debt to asset ratio.

This ratio measures the amount of leverage that Reits use to fund their acquisition of properties.
If a Reit was already borrowing close to its stipulated debt-asset limit of 35 per cent for non-rated Reits and 60 per cent for rated Reits, the decrease in valuation for their properties will push them above the borrowing limit.

Their ability to obtain debt financing to purchase new properties, for example, will be impaired as a result.

While the impact of an increase in interest rates may cast a pall over the performance of SReits in the long run, Reit managers have found ways to hedge the near-term impact of an expected rise in financing costs.

This is mainly done to ensure stability in the Reit's cashflows and to reduce its debt to asset ratio so that investors can continue to enjoy a high expected DPU in a well-managed Reit. Some methods include fixing interest rates for a large proportion of debt, increasing the length of debt maturity, and equity placements of new units to reduce debt.

First, some Reit managers have taken steps to hedge the interest rates on their debts through taking on fixed interest rate debt or using financial derivatives like interest rate collars and interest rate swaps to protect against an imminent rise in borrowing costs.

For instance, during Ascendas Reit's full- year results presentation in April, its manager said it targets to hedge 50 to 75 per cent of its interest rate exposure and has fixed the interest rate exposure of 65.3 per cent of its debt to mitigate the impact of rising interest rates.

Retail bonds
The overall weighted average cost of its borrowings at March 31, 2014, was 2.7 per cent, down from 3.3 per cent a year ago.

Ascendas Reit also provided investors with more information on how the rise in interest rates affects distributable income.

In a sensitivity analysis, the Reit manager estimated that for every 0.5 percentage point rise in interest rates, DPU will be reduced by 0.16 cents, or 1.1 per cent, for its financial year 2013/2014.

Second, rather than relying on short-term financing, Reits have taken long-term alternative funding options to meet their financing needs. They can negotiate for a longer-term loan. They can also issue medium-term notes or retail bonds to meet capital requirements and lock in the current low interest rates for an extended period of time.

Longer debt maturity can help ease the uncertainties related to refinancing debt given potentially volatile short-term interest rates.

For example, CapitaMall Trust recently issued $350 million worth of seven-year retail bonds at a relatively low interest rate of 3.08 per cent.

This helped increase the Reit's weighted average debt maturity from about 3.8 years to four years.
Finally, to help reduce the over-reliance on debt financing, some Reits have taken the route of raising capital through issuing new units instead of using debt as a primary financing source.

An example is the recent private placement of 218 million new units by Suntec Reit at the end of March. The new capital was raised primarily to repay existing debt.

Reits have certainly delivered significant returns for many long-term investors over the recent years.
While investors hunt for high-yielding instruments like Reits to grow their wealth, it would serve them well to keep in mind the likely change in the macro environment.

Investors should monitor the actions taken by the Reit managers to mitigate the risk resulting from rising interest rates in order to safeguard their investment.

Benjamin Tan Guo Hui is from Singapore Management University's School of Economics and Shaun Chia Qi Jing is from SMU's Lee Kong Chian School of Business. Both are final-year undergraduates and are student trainers in the Citi-SMU Financial Literacy Programme for Young Adults. Jointly launched by Citi Singapore and SMU in April 2012, the programme is Singapore's first structured financial literacy programme for young adults. It aims to equip those aged 17 to 30 with essential personal finance knowledge and skills to give them a firm foundation in managing their money, and a financial headstart early in their working lives

How to use your Netbook as a eBook Reader

photos credit to owner

For common EPUB, MOBI and PRC ebook formats, download and install the software fbreader from http://fbreader.org.

This software is the only ebook reader that I know of that can rotate the text of the book by 90 degrees so that the netbook's screen now emulates the page of a book. However, it cannot handle HTM or PDF documents at the moment.

For PDF ebook format, download and install the Adobe Reader XI from http://get.adobe.com/reader/. It has an option for rotating the screen.

There you have it. By downloading and installing these two softwares, you can turn your netbook into a ebook reader.

Link:
http://lifehacker.com/5468581/turn-your-netbook-into-a-feature-rich-e-book-reader
http://ridz1ba.blogspot.sg/2011/08/turning-netbook-into-ebook-reader.html

$1m gone in one year

The Straits Times
Published on Jun 08, 2014

$1m gone in one year: Widow of killed Changi Airport worker is now broke


Two years ago, after her husband was killed in a freak accident while working at Changi Airport's Budget Terminal, she received nearly $1 million in insurance payouts and donations from the public.
Today, that money is all gone.

Madam Pusparani Mohan, 34, is now looking for work in Singapore to support her four young children back in Johor Baru.

"I made a mistake. People knew I had so much money and they all came to me. I am so stupid. I never buy house and finished all the money meant for my children," Madam Pusparani told The Sunday Times from her home in Skudai.

She gave some of it away to relatives when she returned to her hometown in Kedah, then spent a portion of it on a holiday in Genting Highlands with her family. She also lost a chunk of it to a bad business investment - all in the span of a year.

"Now I don't have enough for my children's future."

On March 17, 2012, her husband, Mr Chandra Mogan Panjanathan, 34, was operating a floor-scrubbing machine outside the terminal when he was hit by a taxi hijacked by a Chinese national.

The driver is now serving his jail sentence of two years and one month for voluntarily causing hurt in committing robbery.

Donations poured in after the tragic accident was reported in the media. Many sympathised with Madam Pusparani, who was also working as a cleaning supervisor at the airport, for having to raise four children by herself.

The Malaysian couple's youngest daughter was barely three months old then. Today, their children are aged two, seven, 10 and 11.

Changi Airport Group (CAG) helped to collect donations after it received calls from members of the public wanting to help. Madam Pusparani said she is not clear how much was collected, but thinks it could be about $800,000. She also received over $100,000 in insurance payouts, she said.

"The CAG financial adviser advised me to divide the money between myself and my four children. After allocating $200,000 to each of my four children, I was left with $150,000," she said.

She took that $150,000 home to Johor Baru, quitting her job in Singapore, to take care of her children.

A CAG spokesman told The Sunday Times the CAG had arranged for a family counsellor for Madam Pusparani and had also engaged a financial services adviser to help her with the money she received, including setting up an annuity plan for her children.

"I was told not to touch my children's money as it was meant for their future," she said, adding that the financial adviser also suggested she could use the remaining money to set up a small business in Malaysia.

But the money proved too much for Madam Pusparani to manage on her own.

She said she first had to pay off debts of $50,000 - the couple, who made $2,000 a month jointly, had borrowed money from friends to make ends meet.

Then, she decided to invest the remaining $100,000 in her brother's transport business in Kuala Lumpur, thinking it would give her a stable income.

"But I was told the money was only enough to buy one lorry and we needed three lorries. So, I withdrew half of my children's money, which was about $400,000, to buy two more lorries."

Madam Pusparani said CAG was unaware of the withdrawal as the money was kept in an account under her name.

"I was thinking I could put the money back later," said Madam Pusparani, her voice shaking.

The business did make money in the first three months, said Madam Pusparani, who has a Sijil Pelajaran Malaysia, the equivalent of an O-level certificate, and who took up accounting as she wanted to manage the business herself.

But in the fourth month, the widow was told that the company was losing money. She said she fell out with her brother eventually and did not recover any of her investment.

Her younger brother, Mr Magan Mohan, 32, a technician, said she blamed the family for encouraging her to invest in the business. Mr Magan said his elder brother's business has since folded.

"Some people think my sister gambled away the money, but she never gambles or drinks. She just got into the wrong business."

In January last year, Madam Pusparani took out the rest of the money meant for her children.
She had no choice, she said.

"I never work, but I have to eat. I also need to take care of my parents. I was living with them and I had to pay for the monthly rental which was about RM1,000. My baby is still young and needs money for milk and pampers," said Madam Pusparani, agitatedly.

"My expenses came up to RM5,000 to RM6,000. Where do I find the money?"

That last $400,000 she withdrew lasted her five months.

By May last year, she was broke.

"I also don't know how I finished (using) the money," she said.

A friend got her a job as an accounts clerk in Johor Baru, earning RM2,000 (S$780) a month.

Today, her employer pays her rent for an old, double-storey terraced house, which her family of five live in. A huge portrait of the late Mr Chandra is the only thing adorning the empty living area. Her children's shoes are torn and worn out; so too are their schoolbags.

The family sleeps on two old mattresses in one of three rooms on the second storey. Clothes are piled up on the floor as they cannot afford a cupboard to keep them in.

"I cannot survive with RM2,000 a month. I am thinking of going to work in Singapore. But I feel ashamed," said Madam Pusparani tearfully.

"I don't know how to explain to the people who donated money to me and my children."
joycel@sph.com.sg

Democracy of deeds and voices

Published on Jun 07, 2014


To reverse the tide of negativity, it's essential to give people a voice so they feel heard. This way, they can take action to improve society and feel they truly make a difference.

By David Chan, For The Straits Times


A NEGATIVE climate appears to loom large in Singapore, judging from some online and offline comments on the Government, public institutions, public service providers and foreigners.

Public expressions of negative emotions need not always be a bad thing. They reflect people's concerns, aspirations, goals and experiences. They can and have helped policymakers identify problems, revisit priorities and formulate solutions.

But the natural expression of negative emotions over an issue is not the same as having what is termed a "negativity mindset".

Such a mindset is developed and strengthened over time, by repeated, unresolved negative experiences and emotions. It can be fuelled further by misinformation and misinterpretation.

Once formed, negativity comes fast and strong. And yet, turn the tide we must, for the well-being of Singaporeans and the future of Singapore.

But first, we need to understand the nature of such a mindset.

A negativity mindset
A NEGATIVITY mindset is a predisposition to regard a person or group unfavourably based on who the person or group is, rather than on what they say or do.

The target can be a politician or a political party. It can also be an advocacy group or a segment of the population such as the online community of a website.

A negativity mindset can occur in anyone, regardless of educational background, socioeconomic status, political belief or moral position. Citizens, advocacy groups and policymakers - no one is immune to developing a negativity mindset.

A person with a negativity mindset focuses only on the negative attributes of the target. These might be true negatives, but they could also be neutral or positive points reinterpreted as negatives.
There is little or no reflection on the target's position, the issue or the context.

Is the interpretation supported by facts? Is the reasoning valid? Are the values and principles underlying the position desirable and acceptable?

These questions do not arise or are not taken seriously.

The fixation is on the identity of the target - who the person is and which group the person belongs to - and the alleged self-serving intentions of the target.

The fixation drives reasoning and reactions towards a predetermined negative conclusion - never mind the facts.

The negativity mindset is basically a self-reinforcing confirmatory bias. It is a tendency to seek out, interpret and remember information that confirms existing beliefs, positions or actions which highlight negative attributes of the target.

A negativity mindset can develop subtly but quickly when negative emotions or experiences accumulate. It can also spread quickly and influence other people's perceptions. This often occurs when people share common experiences or see themselves as being in similar situations.

Constructive discussion is difficult when one or both parties have a negativity mindset. Finding solutions to problems becomes unlikely.

Studies show that people with a negativity mindset are less likely to be happy, maintain quality social relationships or become effective leaders. They are also less likely to succeed in effecting positive change to the status quo.

In short, a negativity mindset hurts both the person who holds it and the target.

Other people could be affected as well. It produces new problems instead of generating solutions. This means it is often self-defeating.

How does one deal with a negativity mindset?
If it results from ignorance or misinformation, one can present relevant facts, clarify and reason.
When made promptly and honestly, such responses can reduce the likelihood of a negativity mindset developing.

But facts and rational arguments alone will not be enough. Positive attitudes need to be developed.

Fostering positivity
ONE way to do this is to involve people in volunteer and community work.

Giving time, money and other assistance not only benefits the recipient but also leads to positive outcomes for the giver. When people give, they derive a sense of personal meaning from helping others. They also appreciate their own circumstances more as they learn of the situations facing the less fortunate.

The interaction between the givers and the recipients also produces positive social relationships that will benefit the community in many ways.

Another way to foster positive attitudes is to involve people in identifying problems and generating solutions. This means giving people a real voice to express comments and ideas.

A real voice means there must be genuine listening and openness to the possibility of change on the part of the listeners.

But people should also be accountable for what they say, and put forward their views responsibly and reasonably.

An effective leader regards such views as important inputs when diagnosing problems and generating solutions. They are not regarded as mere noise or hurdles that must be cleared in decision-making.

If people do not have a voice or they conclude that their voices are not being heard, it produces angst and leads to a polarisation of attitudes. Negative attitudes will therefore develop.

But when active participants have a voice, and the issues are discussed openly, constructive action follows.

Voices and actions do not have to contradict. They can complement and reinforce one another, since experiences from helping others often motivate people to speak up, and having a real voice can lead them to take action to improve society.

An evolving democracy
MUCH has been said recently about Singapore being a "problem-solving democracy" and how it should be - in the words of the late S. Rajaratnam, one of the nation's pioneer leaders - a "democracy of deeds, and not words".

Deeds are actions to improve society. But voices are not merely words that speak softer than actions. Together, voices and actions solve problems. So to me, to be a problem-solving democracy, Singapore should be a "democracy of deeds and voices".

The combination of deeds and voices will lead to real improvements in society and people's quality of life - not just for the people who are helped but also for those who step forward to give voice and take action. This will help build goodwill and trust between all the parties involved.

As involvement in deeds and voices expands, democracy in Singapore will mature when people are able to make decisions in more areas of their lives and then implement those decisions.

In this way, people will take ownership of the decisions. They will feel responsible for seeing those decisions implemented, and will be more willing to help solve any problems that might arise.

People will move away from a "blame mentality" to a problem-solving mindset. They will appreciate that while things cannot be perfect, they can be improved. They will effect positive change.

Psychological capital
OVER time, people-centric involvement in deeds and voices will help foster a positivity mindset.
A sense of self-efficacy - confidence that they can change things to improve Singapore and the lives of Singaporeans - develops. So does a sense of optimism as people see that things can and will get better in future.

People will also have hope. Seeing that they have a real opportunity to achieve their aspirations, they will set challenging but achievable goals and strive to reach those goals.

Resilience will develop when people experience for themselves that it is possible to recover from adversity, cope with changes and adapt to new demands brought about by uncertain situations.
Self-efficacy, optimism, hope and resilience contribute to a positivity mindset that has a "can do" spirit and a "will do" attitude. To foster this positivity mindset among Singaporeans is to build psychological capital in Singapore.

Tackling negativity mindsets requires looking at objective factors such as infrastructure issues that might contribute to the formation of these mindsets. So it is important to review and improve policies and their execution, as well as improve public communication and engagement.

But getting policies right is only one dimension of tackling negativity. It is also important to get the psychology right by fostering a positivity mindset.

Positivity is not fluffy thinking or ignorant bliss. It is a core resource that enables Singaporeans and Singapore to adapt and change for the better.

It is a positive force multiplier that broadens and builds. Positivity opens hearts and minds, and it solves problems.
stopinion@sph.com.sg

The writer is director of the Behavioural Sciences Institute, a Lee Kuan Yew Fellow and Professor of Psychology at the Singapore Management University.

Which to go for - CPF Life Basic or Standard plan?

The Sunday Times
Goh Eng Yeow
1/6/2014 

Many of my friends in their 50s are facing a major concern - whether they have saved enough to last them through retirement.

For my parents' generation, the norm for a married couple was to raise a large family which would, in turn, look after them when they grow old. But times have changed, and many of us either have small families or stay single so we have to be financially secure to ensure our money does not run out.
But getting to our objective of financial wellness needs a careful strategy.

The cornerstone of any retirement planning should start with the savings we are accumulating in our Central Provident Fund (CPF) accounts. That at least ensures that we can still pay our monthly grocery and electricity bills when we are old and not working, if we have already paid for the roof over our heads.

Then how comfortable we want to make our retirement will depend on the other aspects of our financial planning such as squirrelling money away into a Supplementary Retirement Scheme (SRS) account or even buying a house for investment in the hope that property prices will keep going up.

Take a Singaporean who reaches 55. As a CPF member, he must set aside a Minimum Sum in his Retirement account from money in his CPF Ordinary and Special accounts. From next month, the Minimum Sum will be $155,000. Currently, about half of them meet this requirement.

Once he reaches 65, he will get a fixed monthly payout for about 20 years from the savings set aside in his CPF Retirement account. Between 55 and 65, the money in his Retirement account will enjoy an interest rate of up to 5 per cent per annum - which is far higher than what the banks are offering for fixed deposits.

But what happens if our Singaporean lives past 85 and the money runs out? It is not a hypothetical question as people are living longer. My parents are in their 80s and I have a 104-year-old aunt in Hong Kong.

Since last year, it has been compulsory for Singaporeans and permanent residents who turn 55 to be part of the CPF Lifelong Income for the Elderly (Life). Yet most of them are ignorant about its details. CPF Life offers two plans - Standard and Basic.

The Standard plan is essentially a traditional annuity scheme. People taking up this option will use the entire sum in their Retirement accounts to buy the annuity. They will get a monthly payout for the rest of their lives once they reach 65.

Wage-earners may like to opt for this plan since they are used to getting their salaries credited into their bank accounts every month. This ensures that when they retire and hit 65, the salaries they are used to getting will be partly replaced by the monthly CPF Life payout.

Calculations from the CPF Life Payout estimator show that a male Singaporean who turns 55 from next month and has the CPF Minimum Sum of $155,000 will get a monthly payout ranging between $1,200 and $1,350 if he opts for the Standard plan. For a woman, the monthly payout will roughly vary from $1,100 to $1,250 as she is expected to live longer.

Indeed, the norm for most of the 400,000 people who retire in Britain every year is to buy an annuity similar to CPF Life Standard.

One merit about CPF Life is that it is run by the Government. That removes the big worry of retirees as to whether their insurer is financially strong enough to withstand the next global financial crisis in order to keep making the monthly payouts.

But buying an annuity is a relatively new concept here and there are people who gripe about why they should have to buy one when it takes Herculean efforts to live past the age of 85.

One issue raised by a friend is the possibility of "mortality cross subsidy", whereby those unfortunate enough to die early effectively subsidise those who live longer than the average.

My reply is that the purpose of buying an annuity is to achieve some income certainty when we are old. Trusting our investments entirely to achieve that goal is too much like relying on the roll of the dice, given the regularity with which financial crises have been occurring.

Still, I am glad that CPF Life has another choice - the Basic plan - which gives a lower monthly payout and a higher bequest. Essentially, it works like a deferred annuity - an insurance product that is very popular in the United States.

Under this plan, a CPF member will have premiums deducted from his Retirement account to pay for the deferred annuity whose payouts will only start when he reaches 90. After he turns 65, what he gets is a monthly payout from his CPF Retirement account.

In essence, the CPF Life Basic works like an insurance plan for those with longevity concerns but who may have other sources of income. If he lives past 90, he will get a payout - and he does not have to worry about subsidising people who live longer than the average.

I believe that the Basic plan will appeal to the financially literate and to the self-employed who may not have much CPF savings.

That, in a nutshell, sums up CPF Life: The Stan-dard plan offers an annuity scheme similar to what retirees in Britain opt for. The Basic plan is commonly adopted by US retirees. Choose wisely.
engyeow@sph.com.sg


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Background story
Starting point
The cornerstone of any retirement planning should start with the savings we are accumulating in our CPF accounts. That at least ensures that we can still pay our monthly grocery and electricity bills when we are old and not working, if we have already paid for the roof over our heads.

Forget high living with CPF Life payouts

The Sunday Times
Jonathan Kwok
1/6/2014

There was quite a reaction from my friends after the Central Provident Fund (CPF) recently raised its Minimum Sum yet again.

We may still be decades away from retirement, but there was still some irritation over the idea that part of our money will be parked in some account that we can access only after various conditions are met.

The latest change announced last month raised the Minimum Sum to $155,000 from July 1, up from $148,000. This is the amount that has to be left in our account at age 55, so it means we can withdraw less.

I was the voice of moderation, as I pointed out the rationale behind the change.
The Minimum Sum has had to go up often in recent years for two reasons, I explained: People are living longer and things are getting more expensive.

No escaping from these realities.
The Minimum Sum is used to buy an annuity, called the CPF Life, which provides monthly payouts from retirement until you die.

A higher Minimum Sum means CPF Life payouts can increase to keep pace with inflation.
In fact, my concern is almost opposite from that of some of my peers who worry about money being locked away in the CPF account.

I am less angsty about not being able to use my money whenever I want to. Rather, I tell people that we should be worrying that the payouts from CPF Life will be too low for us to maintain our current lifestyles after we retire.

This system is meant to meet the needs of a lower-middle income retiree. So you will need to save and invest separately if you aspire to live a better life, taking an occasional holiday and eating at restaurants, for example.

I did some back-of-the-envelope calculations to get a quick gauge of how much a couple will need for their retirement. It turns out, you and your partner may need about $500,000 to $800,000 in stocks to provide enough dividends to supplement CPF Life payouts.

Savings and Investment Plan
First and foremost, we need to find out how much an above-average income family spends.

I took data from the Statistics Department's most recent household expenditure survey, which was released in December 2009.

The top-earning 20 to 40 per cent of households spent $4,532 per month, the report said.
I'll assume that our hypothetical go-getting couple fall in this range and do not want their living standards to drop after retirement.

But these figures presumably capture households at a time when they are raising children, who would have grown up by the time the couple retire.

So I assumed expenditure could be cut by one-quarter to $3,399.

How much of this can be covered by CPF Life?
A Singaporean man who turns 55 this year and has the CPF Minimum Sum of $155,000 will get a monthly payout ranging between $1,200 and $1,350 if he opts for the standard plan, said the CPF Life Payout estimator.

A woman's monthly payout will roughly vary from $1,100 to $1,250 as she is expected to live longer. The payouts will start when they turn 65.

Taking the lower sums, a husband-and-wife team will get only $2,300 per month from CPF Life, leaving them with a $1,099 deficit from their $3,399 expenditure. That works out to a shortfall of $13,188 per year.

If our hypothetical couple fail to make up the shortfall, they will need to cancel their hotel high teas and forget about travelling further than Johor Baru.

But surely our couple deserve better after slogging for decades in the rat race?

Fear not, a solution is present if they start saving and investing early in life.

I centred my calculations on using shares to meet retirement needs, though you can probably achieve the goal via an investment property. Assuming a dividend yield of 4 per cent, a $329,700 portfolio of stocks will be able to generate dividends of $13,188 per year. This amount will be able to meet our couple's shortfall.

Inflation with no drawdown
This simple calculation discounts inflation, however. As time goes by, things will surely get more expensive and you will need more money to maintain your lifestyle.

A 3 per cent inflation rate over 30 years will lead to annual combined expenditures eventually ballooning to $99,003 for our couple. If CPF Life payouts go up in line with inflation, this would eventually come to $66,992 per year for our couple.

But the shortfall for the couple's desired lifestyle would also have widened, and they would need a combined portfolio of a whopping $800,269 to generate enough dividends for that.

Inflation with drawdown
The previous scenario assumed that the couple would use only dividends from their shares and leave the entire capital to their beneficiaries after they die.

But one way to reduce the required amount is if they are willing to draw down on their stock capital after retirement. So their yearly payouts will consist of both dividends and a drawdown on capital.
After 25 years of retirement, they will have zero shares left but they would have needed a smaller amount to start their retirement with - $520,082.

The lesson from all these calculations is that it makes good financial sense to start preparing for retirement early. Without top-ups from your own investments, CPF Life will be able to provide only a basic lifestyle.

jonkwok@sph.com.sg

http://www.straitstimes.com/sites/straitstimes.com/files/20140601/ST_20140601_JKCPF01NEW_370394.pdf

If in doubt, sell half

The Sunday Times
Goh Eng Yeow
18/5/2014 

As a financial writer, I regularly get queries from readers about their investment strategies but while they might sound innocuous, they often defy straight-forward answers.

Take this from Mr Lawrence Law, a 58-year old Singaporean working in Jakarta who got into share investing only late in life.

Mr Law bought 2,000 Singapore Airlines shares in two tranches but the average cost was below the carrier's market price. He asked if he should sell the 1,000 shares that were profitable, while keeping the other 1,000 that were still below his investment costs.

Well, the answer will depend on what sort of investor he is.

If he is a "buy and hold" person like me, he will probably not do anything as he would have studied the counter very carefully before investing and would settle in for the long haul.

This is the approach so elegantly elucidated by investment guru Benjamin Graham, who noted that in the short run, the market behaves like a voting machine - tallying up which firms are popular and unpopular. But in the long run, it is a weighing machine, assessing whether a company's business has substance.

But herein lies the problem: There are times when a company is unloved, for whatever reason, even though it enjoys good business fundamentals. This is reflected by its depressed share price.

It may take a long time before it is priced correctly, yet in the meantime, it can be frustrating and painful for investors who are right about the company at the wrong time.

One example is beverage giant Fraser & Neave, whose share price had traded for years at a so-called "conglomerate" discount to the value of all its various businesses when they were added up.
The shares finally received a boost nearly two years ago when it became the subject of a fierce takeover tussle that resulted in Thai billionaire Charoen Sirivadhanabhakdi taking control.
So for many investors, it may be the tallying of votes - what other people think of the stock - that matters a lot more than the weighing machine Mr Graham talked about.

There is another analogy for investors who take a much shorter view on their investments, one enunciated by another great investor, the British economist John Maynard Keynes.

He described investment as a beauty contest with a difference. To guess the winner, what is important is not to select who you believe to be the most beautiful contestant but to guess at how the judges will rate the various contestants.

Seen in that light, successful investing is really a lot more psychology than anything else, a process of coming to grips with your own emotions as well as others'.

My answer to any investor, who is confronted with a dilemma over taking profit on his winning bet or cutting loss on a plunging stock, is to sell half of it.

Selling half of the investment will release the psychological logjam that comes from trying to decide whether to keep the investment or get rid of it completely. He can then analyse why he bought the stock in the first place, and whether to hold the remaining shares, sell them or buy more.

This ploy is especially useful to a trader who is facing losses on his bets. What should he do if he keeps losing money even though he believes he is right and that the market would see sense eventually?

When a stock falls substantially, the trader's first reaction is denial, as he hopes to salvage the best of a bad situation, telling himself that it is only a short-term fall.

Then when it drops further, he may start calculating how much money he has lost. He may even hold the stock for a while longer, and then when it hits bottom, sell everything and swear never to invest in shares again.

But selling half of the investment first saves him from an even bigger loss if the price continues to plunge. But he will also be able to enjoy some of the investment's upside if the price recovers.

Once a trader has crystallised his loss, the next step is to look ahead and not dwell on the past, wallowing in despair over how awful it must feel to throw such a huge wad of money down the drain.

Let's face it, no matter how successful we are as investors, all of us have encountered disasters at one time or another. In his latest newsletter to shareholders of his company, Berkshire Hathaway, investment legend Warren Buffett owned up to losing a whopping US$873 million ($1.1 billion) on the debts issued by a firm known as Energy Future Holdings.

"Most of you have never heard of Energy Future Holdings. Consider yourself lucky; I certainly wish I hadn't... Unless natural gas prices soar, EFH will almost certainly file for bankruptcy in 2014," he wrote.

The rest of us would not have $1 billion to lose in the first place. But in acknowledging his investment mistakes, Mr Buffett flags the importance of learning from them and moving on. That is a valuable lesson for all of us.

engyeow@sph.com.sg

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Background story

Dilemma solved
Selling half of the investment will release the psychological logjam that comes from trying to decide whether to keep the investment or get rid of it completely. The investor can then analyse why he bought the stock in the first place, and whether to hold the remaining shares, sell them or buy more.

Planning for a sustainable retirement

The Business Times
Lorna Tan
14/5/2014 

BUYING an annuity insurance policy is a daunting experience.

That was how I felt when I forked out $100,000 to insurance cooperative NTUC Income in 2011 in return for some peace of mind in my golden years.

It was unnerving not only because I coughed up a six-figure sum as a one-time single premium. It was daunting because, knowing that I'm here on earth on borrowed time, I felt as if I was audaciously negotiating with my maker for a longer life.

After all, it makes sense to buy an annuity only if I believe that I can live (God willing), and am committed to living, a long healthy life.

In 2011, I bought NTUC Income's Guaranteed Life Annuity policy, which is expected to pay a regular guaranteed income - $700 per month or $8,685 per year - from the time I turn 65 till I die.
So the longer I live, the more payouts I get to enjoy from the insurance policy.

But what happens if my "longevity" plan fails?

The policy comes with a death benefit that will be paid to my beneficiaries in one lump sum.
There are two scenarios. If death were to occur before I turn 65, the higher of the single premium or 97 per cent of the premium accumulated with interest and bonuses, is paid.

If death were to occur after the annuity payouts have started, the premium with interest and bonuses accumulated from the time I purchased the policy till my death, less the total annuity payments made, would be refunded.

The interest rate is guaranteed at 2.5 per cent per annum. And what if I change my mind and wish to surrender the policy? I could do so but it is not advisable as buying a life insurance policy, particularly an annuity, is a long-term commitment and an early termination involves high costs.

I would incur a loss if the surrender value is less than the premium paid. I can only "win" from buying the Guaranteed Life Annuity plan if I live a long life.

At least, until I live past 90, which is when I "break even". On a 2.5 per cent interest rate, it takes roughly 25 years for me to recoup, through the annuity payouts, my original $100,000 single premium, which would have compounded to $160,000 by the time I reach my drawdown age of 65.
Some of you may wonder why I bought an annuity.

After all, this would be on top of another annuity plan, the compulsory national annuity scheme called CPF LIFE (Lifelong Income For the Elderly), which Singaporeans or permanent residents born in 1958 or after would be placed on, when they reach 55. Under this scheme, members receive a monthly income for life, starting from their drawdown age.

If you are now a 50-year old male and have the CPF Minimum Sum of $148,000, your default CPF LIFE monthly payout from age 65 would be from $1,157 to $1,283. (The CPF Minimum Sum will be raised to $155,000 from July.)

Women are expected to live longer lives (87 for females, 83 for men) so the payouts based on the current Minimum Sum are lower, projected to be $1,053 to $1,172.

Well, the decision came about after I did an about-turn in my retirement planning.

Like many people in the past, I used to think that retirement planning is all about accumulating a certain magic number - depending on your desired lifestyle - before the drawdown phase kicks in. Not anymore.

As life expectancies increase, thanks to a host of reasons such as advanced medical science, one retirement risk we potentially face is the danger of outliving our nest egg.

It has been reported that for Singaporeans who are 65 today, about half of them are expected to live another 20 years (that is, 85 and beyond), while a third will live beyond 90. Therefore the difficulty of determining this magic retirement sum increases as well, rendering such an approach unsustainable. How much of this lump sum is enough? What if we get our sums wrong?

I used to think I would have achieved financial independence and could call it a day at work when I reach my retirement target of a million dollars.

I was wrong. Faced with a longer life expectancy, the rising cost of living, ongoing support for my ageing parents and an estimated overseas education bill of about $500,000 to be chalked up by my two kids in the coming years, I had to redo my sums.

To mitigate this risk, I've shifted my focus to ensuring lifelong cash flows or income sources - which we can call an income goal - that would fund my golden years, instead of just achieving a certain magic number.

Having an income (better still, if it is inflation-protected) throughout my golden years is now a measure of my success in retirement planning.

This income goal has a few important characteristics:
•The cash flows should be regular and sustainable.
•They should generate enough income for me to live on at all times, whether the economy is up or down.

A good way to get started is to work out the cash flows you need, followed by the crucial step of matching the investments that will generate income sources to fund the desired cash flows.
To make it easy to work out my cash flow needs, I pictured a money pyramid, much like a food pyramid, with the basic subsistence category of needs at the bottom.

Here, I would include essentials, such as food, housing, medical, insurance, utilities, and allowance to parents. It is prudent to project realistically how much you would need (say, $3,500) to sustain these retirement essentials. And I would want to ensure that the income flows required to fund these needs are safe, predictable and guaranteed.

Begin by listing the regular, sustainable and guaranteed recurring income flows (say, $1,500) that you already have and work out the cash flow gap ($2,000), before deciding how this gap could be closed.
This is where the two annuities I own would come in handy as they would potentially provide two streams of "guaranteed" income flows totalling about $1,700 per month.

Other financial instruments that would qualify are bank savings, monies and investments parked in my Supplementary Retirement Scheme account, dividend payments from real estate investment trusts (Reits), coupon payouts from bonds and preferred stocks, and rental income from investment properties.

The next layer in the money pyramid is the category of wants or non-essential items that I could do without if I couldn't afford them, such as cable TV, dining out, shopping, gifts, leisure activities and vacations. The income flows channelled to satisfy these wants would be generated by investments that offer growth and capital appreciation, and may be volatile. Examples are stocks, unit trusts, commodities and hedge funds.

In summary, they would be relatively less safe, less predictable and less guaranteed compared with the investments you match with the cash flows of your essential needs.

The rationale is that as I have taken care of my essentials, I can take more risk with the remainder of my retirement savings. Of course, this would also depend on your risk appetite and capacity. It is easy to fall into the mistake of matching the wrong investments with the different categories of cash flows. For instance, I wouldn't expect my investments in single stocks to fund my essential needs.

Here's why:

Taking a pointer from the financial meltdown in 2008 when stock prices headed south, many retirees who primarily invested in stocks found themselves caught in a situation where they either got out of the stock market with huge losses or gritted their teeth and tried to stay invested for better days.

When their stock investments were unable to immediately generate the cash flows they needed, they faced the dire choices of either going back to work and/or cutting down their expenses drastically.

In a best-case scenario, if I could successfully achieve my income goal, I could live off that income during my lifetime and bequeath my principal savings and assets to my beneficiaries.

Now, that would be planning my retirement sustainably.

The writer is the author of 'More Talk Money' and 'Talk Money', and former Sunday Times Invest editor. She is senior vice-president, corporate communications, at CapitaLand

Singapore a 'canary in the gold mine of globalisation'

Published on May 24, 2014

Republic testament to how countries can reap success from free trade

By Andres Martinez

 You land at Changi Airport after flying for what seems a lifetime, and you're naturally disoriented, even before you hit the customs booths that feature bowls of mints, dire warnings about the death penalty for those bringing in drugs, and digital comment cards asking if the service was to your liking.

Duck into a public restroom and you'll be exhorted to aim carefully and to "flush with oomph" for the sake of cleanliness. Outside, it's tropical sticky but impeccably clean, in a city that is inhabited by Chinese, Malays, Indians and a multiplicity of guest workers from around the world - all speaking English.

Singapore is an assault on one's preconceptions. Singapore calls itself the Lion City but it would be more accurate to call it the Canary City - the canary in globalisation's gold mine.

Arguably no other place on earth has so engineered itself to prosper from globalisation - and succeeded at it. The small island nation of 5 million people (it's really just a city but that's part of what's disorienting) boasts the world's second-busiest seaport, a far higher per capita income than its former British overlord and a raft of No. 1 rankings on lists ranging from least-corrupt to most business-friendly countries.

On the eve of celebrating its 50th anniversary next year as an independent nation, Singapore is proof that free trade can and does work for multinationals and ordinary citizens alike. So long as globalisation continues apace, the place thrives.

Singapore's defining achievement is summed up in the title of its former prime minister Lee Kuan Yew's memoir, From Third World To First.

When it split from Malaysia a half century ago to become a separate nation of dubious viability, Singapore had little going for it, other than a determination to become whatever it needed to be - assembly plant, container port, trustworthy banking and logistics centre, semiconductor hub, oil refinery, mall developer, you name it. But the brilliance of its founding fathers - OK, it was mostly one father, Mr Lee - was in realising that the precondition for any and all of this to happen was good governance. Over a recent week of meetings and briefings with Singaporean business and government leaders sponsored by the non-profit Singapore International Foundation, two offhand remarks bore this out.

The first was a statement by one business leader that he has never had to pay a bribe in his lifetime. To an American audience, that may seem like a fairly modest boast but as this speaker noted, it'd be a difficult claim to make in neighbouring South-east Asian countries (or developing nations anywhere).

Growing up in Mexico, my dad, a businessman who'd never set foot in Singapore, would often go on and on at dinner about how our country needed a Lee Kuan Yew. I had a vague sense of what dad meant but only now do I get the vehemence behind his sentiment. You couldn't get by in Mexico back then without paying bribes, constantly.

Like Americans, Singaporeans worship the concept of meritocracy. Unlike Americans, Singaporeans entrusted their society to an all-knowing one-party technocracy, a civil service that has delivered the goods across two generations, including affordable, publicly built housing for a majority of the population, and a system of private lifetime savings vehicles that are the envy of policy wonks the world over.

Society's cohesive glue, in addition to English, is a collective form of the "Singlish/Chinese" term kiasu, which roughly translates into a fear of losing or being left behind.

Kiasu usually refers to the extraordinary lengths to which people - individually and collectively - have gone to ensure success. And the motivating anxieties are not hard to discern in a nation-state so small it must rely on other countries for the water it drinks and the space to train its armed forces.

What if China and some other Asian state go to war over disputed islands? What if Shanghai or Hong Kong leverage their domestic markets to overshadow you as Asian financial hub? What if the Malaysians cut off your water? The brutal Japanese occupation during World War II and the recent heart-wrenching dip in trade during the financial crisis of the last decade are stark reminders of how quickly things can sour for a vulnerable canary in a gold mine.

Even now, at the height of its success, Singapore doesn't get much love from the legions of foreigners who avail themselves of its First World amenities.

It's almost obligatory for Westerners visiting or residing in Singapore to complain about the "sterility" of the place and joke about the carefully manicured boulevards and pristine shopping malls - contrasting Singapore unflatteringly to the grittier authenticity and "character" of nearby Cambodia and Vietnam. It's indeed easy to mock Singapore if you haven't lived in a poor country, and it's a form of colonial prejudice to begrudge Singaporeans their lack of Third World "charm". We prefer our tropics to be exotically chaotic, thank you - not tidier and more efficient than the Swiss.

But the interesting wrinkle here is that Singaporeans themselves seem to be joining in the second-guessing about the price of development. Opposition parties are gaining some ground in parliamentary elections, capitalising on unhappiness with strained public services, soaring prices and an influx of super-wealthy foreign investors that resulted from the Government's openness to rapid growth.

Having taken care of its population's basic needs and then some, it must be galling for Singapore's relentlessly pragmatic leadership to see a surge of yearning for rooted authenticity. The few older neighbourhoods that have not been demolished - including the first generation of public housing complexes - are now heralded as historic landmarks, and Singaporeans treat their old botanical gardens as sacred ground. At the Singapore Government's world-renowned scenario-planning futures think-tank, one analyst confided that she is looking into the uptick of nostalgia and what it might mean for policy.

This ill-defined sense of nostalgia - presumably an irrational sentiment in a place that's gone from Third World to First in record time - reflects the tensions inherent in globalisation.

You can leverage all of your comparative advantages to succeed in the global marketplace, and transform yourself accordingly, only to end up feeling some unease at having your distinctive sense of place eroded.

Until recently, Singapore was among the most welcoming places to outsiders, with one out of every three residents born elsewhere. But with fertility rates dropping, the country opened the floodgates to immigrants to ensure continued growth and prosperity, turning immigration into a lightning rod.

This being policy-wonk heaven, one of the triggering events to a national debate on the issue was a government White Paper discussing the target of reaching a population of 7 million. A more spontaneous event was a modest riot late last year in the city's Little India quarter.

This was the subject of the second offhanded remark that struck me most during my recent week in Singapore, when a government official, off-script, said with some relish: "Imagine that, we had a riot: We must be a real place."

A general unease about Singapore's identity and concerns about overcrowding (the price of a Honda Accord is set at more than US$100,000 or S$125,000, in what has to be the bluntest form of congestion pricing anywhere) have forced the Government to slow down its intake of immigrants and taper its growth projections. The move was a testament to how responsive Singapore's system can be to its citizenry's needs and desires, without being terribly democratic.

It was a testament, too, to how perfect Singapore and its paternalistic, technocratic cosmopolitanism is for an age of interdependence that prizes connectivity over a sense of place.

There are many cautionary tales to globalisation's downside but no better canary in the gold mine of globalisation's tenuous triumphs than Singapore.

--------------------------------------------------------------------------------
The writer is the Washington editor of Zocalo Public Square and vice-president of the New America Foundation.

This article is taken from www.zocalopublicsquare.org
Zocalco Public Square, a project of the Centre for Social Cohesion at Arizona State University, is a not-for-profit "ideas exchange" that blends live events and humanities journalism.

Getting the hang of reading annual reports

Published on Apr 20, 2014

Be alert to big drops in sales and/or profits, jumps in debt levels and queries from SGX

By Goh Eng Yeow, Senior Correspondent

Like thousands of other investors, I have found my mail-box cluttered and overflowing with annual reports in the past few days.

Most of these reports are mailed in the form of CDs but there are a handful of companies that still take the trouble to send me the printed copy.

I try to make the effort to go through the annual reports when I find the time. Most are from companies whose shares I have held for years and reading their reports reinforces my belief as to why I bought them in the first place.

But I am more the exception than the rule in this respect. Few investors bother to even glance at the reports sent to them. In fact, most people I know toss them away unopened, even though the companies might have spent a lot of time painstakingly piecing the information together.

The problem may have become more acute in recent years because the reports come in CD form. Trying to manoeuvre through a report on a laptop can be an ordeal compared to flipping through the printed copy.

That said, I understand the need for companies to be environmentally friendly and save the forests by using less paper since most of the reports end up in the bin unopened anyway.

When I ask friends why they fail to look at the annual reports of the listed firms they invest in, the same excuse crops up again and again: They don't have the time and they don't know what to look out for anyway. They also rely on their brokers to tell them if anything is amiss.

That is a pity. Unlike buying a house that you can see and touch, holding listed shares is a peculiar form of ownership in a company. You have no direct control over the firm's assets and you reserve the right to walk away at the drop of a hat by selling your shares.

So, next to attending the company's annual general meeting to size up its management and form an impression of where its business is headed, the next best recourse is to take a stab at its annual report.
But the problem is that annual reports are not exactly easy-to-read documents to start with. Most of them are dense and dull, run to a few hundred pages and are filled with lots of off-putting numbers. Some do not bother to have pictures to liven up the grey pages.

However, it is important for a long-term investor to try and understand how the business of the stock you own is performing, and one of the best ways to do that is by going through the annual report, whether you like it or not.

I have some suggestions on what to look out for if you have only a few minutes to spare:

What is the management saying?
There is nothing that beats reading the top dog's take on the company. In most cases, the chairman's statement is merely a bland overview of the company's past performance - with highlights of any achievements, such as an increase in dividend payouts.

However, if an investor owns shares in a particular company long enough and he takes the trouble to scan the annual reports, then the tone of the chairman's letter and management discussion will be a good pointer to how the core business is running.

If the management starts making excuses or talking in jargon, that should ring alarm bells.

Sales, cash flow and debt levels
You do not have to be a sophisticated investor to know that a big drop in sales and/or profits is a sign that all is not well with the company. Other red flags would be a sudden drop in the cash flow a company gets from its operations. I usually also check to see if there is any big jump in the company's debt levels.

What you should also do is to check the Singapore Exchange's (SGX) website to see if it has raised any queries with the company after it issues its annual report.

The additional information the company has to disclose following an SGX query will often give you a handle on how its business is performing.

Auditing the auditors' take
A listed firm must hire an independent auditor to run his eye over the financial numbers it releases in its annual report.

For most companies, it is routine to get a clean bill of health from their auditors, but there have been instances of auditors flagging their concerns over a company's financial conditions which an investor needs to be aware of.

If a company is changing its auditors, that may also be a cause of concern. You can check the disclosure the company would have made to the SGX for the reason for the change.

At the end of it all, the money is yours to lose if you fail to keep abreast of developments in the company whose stock you own. So those few minutes checking out the report could turn out to be the best investment you make.

engyeow@sph.com.sg

How to win at a winning game

Published on Apr 20, 2014


Consistently invest in diversified stocks, don't bail out in bad times, minimise cost

By Teh Hooi Ling

It is a fact. A lot of novice investors in equities ended up losing money.

Consider the track record of Mr Peter Lynch who managed Fidelity's Magellan Fund from 1977 to 1990. He beat the S&P 500 Index in all but two of those years and averaged returns of 29 per cent a year.

That's mind-blowing. It means that $1 grew to more than $27. Had you invested as little as $37,000 with him in 1977, you would have been a millionaire in 1990.

You would imagine that most of the investors who put money in the fund would have made money. But guess what? Mr Lynch himself once said that he believed more than half the unitholders in his fund had lost money. It depended on when they had bought and sold Magellan.

Mr Martin Zweig, a market analyst and investment manager, commissioned Morningstar, the mutual fund research organisation, to track the cash flows in and out of the leading growth funds in the United States in the 1990s.

The contrast between the returns of the investments themselves and the returns of the investors was absolutely breathtaking: The 219 growth funds averaged an annual compounded return of +12.5 per cent for the five years ended June 1994.

But, the investors did much worse. They apparently didn't make any money at all; instead, they lost 2.2 per cent a year with the same group of growth funds!

Both of these findings point to the same conclusion, that is: As a group, investors do a rather poor job of deciding when to buy or sell their investment funds.

The chart on top shows the movement of the Dow Jones Industrial Average (Dow) in the US in the past 10 years. A typical inexperienced investor will probably behave as follows:

July 2005:The market has been quite steady and trending up for the past 21/2
years. All the market experts are saying that prices will continue to go up. OK, I'll invest $10,000 to test the water first.

April 2006: The $10,000 that I invested is now worth $10,816. That's a return of more than 8 per cent in one year. Not bad. Market looks firm. I think I'll invest another $50,000.

May 2007: My capital of $60,000 invested so far is worth $71,682. Wow, this definitely beats leaving my cash in the bank. OK, I'll transfer another $100,000 from my fixed deposit and invest in the market.

January 2008: What's all this news about the sub-prime market? Market is choppy. But it's OK, these investments are for the long term.

January 2009: Oh no! There doesn't seem to be a bottom to the market. Now people are talking about the possibility of another Great Depression. During the Great Depression, the Dow fell from a high of 386.17 on Sept 3, 1929 to a low of 40.56 on July 8, 1932. That's a plunge of some 90 per cent. The market did not recover to the 1929 levels until 1954, some 25 years later! Now my portfolio is down by about 35 per cent only. I'd better take out what I have left.

So the investor exited the market in early February 2009, and got back $103,730 of the original $160,000 invested. As it turned out, the investor withdrew his money near the bottom of the market. Just over a month later, in the second week of March 2009, the market hit bottom, and stock prices rebounded sharply from there.

If the investor had stayed invested and held on to his shares, his $160,000 would have been worth $211,308 as at March 1 this year. All the numbers above exclude transaction costs and dividends received.

Because of this emotional tug of war between greed and fear, many investors effectively manage to lose at a winning game.

So how exactly do we ensure that we win at this winning game?

First, understand that when you invest in a diversified basket of stocks, you are investing in a slice of the economy. As long as we need to buy and sell things - there is no question about this here because we can't possibly produce all the things we need ourselves - then there will always be a value to productive companies.

Second, don't exit the market when everyone else is rushing for the exit. Then, you will not get a fair value for the businesses that you own.

Third, all the more you should buy when you see businesses going on sale at a cheap price.

Now, let's see how someone would have done if he had kept investing in the stock market through the Great Depression. We know that the Great Depression was the worst period the stock market had ever gone through in history - it was many times worse than the recent global financial crisis and the Asian financial crisis. We know that the Dow lost a whopping 90 per cent of its value in the three years between 1929 and 1932 and it didn't climb back to its 1929 level until some 25 years later.

Did an investor who put money into the market during that period see zero or even negative return?

The chart at the bottom shows an investor, let's call her Mary, who started investing in the US market in early 1926. She put in $100 into the market every year. Her investment did well in the first four years. Then the crash of October 1929 happened, to be followed by the Great Depression. Mary watched in horror as her hard-earned savings shrank by the day. But she kept faith. She believed in the continued functioning of the modern economy. As long as companies are allowed to produce what people want and need, they will make money, and the stocks she has invested in will have a value, she told herself. So she kept investing $100 into the market every year.

By the end of 1950, Mary would have put $2,500 into the market. Her portfolio value as at December 1950 was $4,239. This, despite the Dow still being 38 per cent below its September 1929 peak.

Mary managed to grow her capital by 4 per cent a year by consistently putting money into the stock market even through the worst of times. She managed to beat the inflation rate of 1.3 per cent during that 25-year period. In other words, she generated for herself a real return of 2.7 per cent a year in the most adverse of situations.

So, to recap, the secret to winning in a winning game is:
One, consistently invest in a diversified basket of stocks that represents the real economy - especially when prices are cheap. (Some Asian markets are still relatively weak vis-a-vis the US market now. So it may not be a bad time to put some money into those markets.)

Two, don't bail out at the worst of times. All the more, if you can afford it, put in more money at the most depressed of market conditions.

Three, try to minimise your cost as much as possible when getting your equity exposure.

Keeping to these three golden rules will ensure that your savings will grow faster than inflation, and that you will tremendously increase your odds of meeting your financial goals.

stinvest@sph.com.sg

The author, a CFA charterholder, is head of research in no-management fee value fund manager Aggregate Asset Management.

Finding the best strategy in share investing

Published on Apr 20, 2014

In the lead-up to The Sunday Times Invest Seminar on May 10, we are running a three-part series on how you can start on that investing journey. This week, a look at various strategies popularly used to buy shares.

By Jonathan Kwok

Higher returns come with higher risk
The stock market is often touted as an accessible way for beginners to grow their money, but there are plenty of traps for the unwary.

First the good news: You can get started for $1,000 or less, compared to possibly $1 million or more if you want a brick-and-mortar investment like a condominium.

The tricky part starts when you decide to take the plunge as there are many strategies to go about share investing.

The jargon does not make things easier - "value investing" and "dollar cost averaging" probably sound like Greek to most people.

The Sunday Times examines some of the more common strategies used to decide what shares to buy, and when to buy or sell.

Value-investing strategy
This aims to buy "cheap" companies by estimating their value and buying if the price is below this figure.

The most famous proponents are billionaire investor Warren Buffett and his late mentor Benjamin Graham, who is considered the "father of value investing".

Unlike many before them who viewed shares as pieces of paper to be bought and sold for a quick buck, Mr Buffett and Mr Graham stressed that shares should be viewed as what they are - documents that give you part-ownership of a company.

So investors should think of themselves first and foremost as company owners, they argued.
Value investing is used alongside "fundamental analysis" - the study of a company's health and profitability.

Fundamental analysis studies the management and competitive advantages of companies, their competitors and markets, and their strategies to thrive.

A major component is an analysis of the company's financial statements - and the possible forecasting of future profits and cashflow.

The investor can then derive a figure of what the company's share price should be valued at. Value investors will buy in if the market price is lower than this by a certain "margin of safety".

"The focus of this strategy is the value of the firm and how the firm creates such value," says Mr Roger Tan, chief executive of Voyage Research, a Singapore-based stock research firm.

Value investing applies more to firms with a track record, rather than new companies or those boasting a turnaround strategy.

There is a lot of academic literature that investors can rely on when attempting fundamental analysis, so valuations can be treated with some confidence, say advocates.

However, it is time-consuming to learn fundamental analysis and apply it. Because analysis is both an art and a science, you may be way off the mark in your valuation without even knowing it.

There is also the danger of the "value trap" - that good, undervalued companies remain cheap for a long time.

In this case, you won't be able to realise your profits.

Used By:
This method is famous thanks to big-name investors like the late Mr Graham and Mr Philip Fisher, best known as the author of Common Stocks and Uncommon Profits.

Mr Buffett, who runs his Berkshire Hathaway investment firm, is also credited as a great value investor.

But Voyage Research's Mr Tan says the trio simply implemented existing theories in economics and finance.

"Many of their methods and theories are derived from academia," he notes.
Some active fund managers use value investing. Their investment mandates may say that they aim to invest in "value stocks".

Ms Teh Hooi Ling, head of research at Aggregate Asset Management, is a believer.
"Value for us is paying just 60 cents for something that is worth $1," she says.

"We look at fundamental data about a company, the tangible assets within the company, be it cash, real estate, machinery or inventory.

"We want companies with a long track record that pay consistent dividends. And we don't like companies with high debt levels."

The firm manages the Aggregate Value Fund with 190 stocks in five markets - an unusually large number of stocks.

Ms Teh said this ensures that more stocks will deliver returns, compared with those that don't.

Suitable For:
Those willing to put in the time to learn fundamental analysis. It may also be suitable for people seeking regular income as it can identify undervalued, dividend-rich shares.

You will need to keep an eye on market prices, but far more attention should be spent tracking company developments and results announcements.

Growth-investing strategy
Growth investors buy shares of firms they expect will achieve above-average growth in the years to come.

As opposed to value investors, they don't care if the share price seems high on various indicators when compared to other companies.

Because of this, value and growth investing are often regarded as opposing ways to approach the stock market, but Mr Buffett has said that there is no theoretical difference between these two concepts.

"The two approaches are joined at the hip," he famously declared.
Growth investors also use fundamental analysis to check what companies and sectors are most likely to grow.

They may also make predictions about future value. Growth investors are more likely to put money in new companies in nascent industries than value investors who typically require some form of track record.

But growth investing got a bad reputation after the bursting of the dot.com bubble in 2000.
The years leading up to it were marked by feverish investments in any tech company, regardless of whether it was making money.

The expectations at that time were that these firms would grow exponentially in the years to come.
The lesson is a reminder that growth investors may get caught up in a huge speculative market bubble - and may suffer huge losses if it bursts.

Used By:
The late American investor Thomas Rowe Price Jr was commonly regarded as the "father of growth investing", and his firm T. Rowe Price still manages funds using this strategy.

Many other fund managers also have unit trusts with "growth" mandates.

Suitable For:
Those willing to put in the time to study companies. If you plumb for growth companies with no operating history, it may be higher risk than value investing.

You can diversify and reduce risk by owning a portfolio of shares or investing in a unit trust.

Dollar cost averaging
This method has been gaining popularity in recent years, but it is more of a way to buy into the market rather than to choose stocks.

After you have identified a long-term investment opportunity, possibly from fundamental analysis, it may make sense not to throw in your money all at once, says Mr Tan of Voyage Research.

Rather, investors may put aside a set amount to buy the shares, either once a month or once a quarter.
"In this case, you will buy more units of the investment when prices are low and fewer when prices are high," he adds.

"The result is that the long-term average cost would tend towards the lower end of the price spectrum."

Mr Vasu Menon, vice-president of Singapore wealth management at OCBC Bank, says that dollar cost averaging is a good way to invest in volatile markets, and upcoming global events mean that markets are going to be volatile.

"If we wait to try and catch things at the bottom, we may miss the boat," he says. "I would recommend dollar cost averaging."

Some people who don't want to analyse companies might use dollar cost averaging to buy low-cost index funds like exchange-traded funds (ETFs).

These track a stock index, like Singapore's Straits Times Index, by buying the index's underlying shares, allowing you to diversify your holdings.

OCBC Bank, POSB Bank and brokerage Phillip Securities offer investing plans utilising dollar cost averaging.

Used By:
Not many active fund managers use dollar cost averaging because you are, after all, paying them for their ability to pick shares and time the market.

But there are some experts who advocate this strategy for retail investors, such as American financial adviser and television host Suze Orman.

Suitable For:
Investors who don't want to monitor the stock market. Use dollar cost averaging to buy individual shares if you have done some research and are confident about the stock.

Otherwise, buy ETFs or actively-managed funds like unit trusts.

Other strategies
There are several other strategies in the market, such as "momentum trading".

This involves identifying patterns in price or volume charts of shares, a field known as technical analysis.

"The theory is that consistent patterns exist and if such patterns are identified, a market timer can foretell how prices would move next," says Mr Tan.

In general, each strategy of approaching the stock market has its proponents, who often stubbornly believe that theirs is the best way.

Stocks are considered a high-risk asset class, especially when compared to bonds.

But within this asset, dollar cost averaging is seen as a lower-risk strategy, followed by value investing, with growth investing and momentum trading considered higher risk.

A high-risk strategy normally promises higher returns and vice versa. Whichever strategy you choose, this should be the one rule of thumb you must remember.

jonkwok@sph.com.sg