At SGMoneyMatters, we are dedicated to assisting you in making informed financial decisions, ensuring wise investments, and planning for your retirement with finesse.
Here are the topics for this week:
- The surge of US long-term Treasury yield and its impact.
- TD Ameritrade pulls out of Singapore and its alternatives.
- Will and trust: Upcoming legacy planning workshop.
Let’s dive in.
#1. US Long-Term Treasury Yield Hits New High
The 10-year US Treasury yield has surged to an impressive 4.8%, marking a 16-year high and reaching levels last witnessed in 2007. This surge aligns perfectly with my earlier prediction during our August webinar, where we discussed the rising trend in long-term yields.
As a result, the average long-term US mortgage rate surged to 7.49%, the highest level since December 2000. You can see the existing home sales have reached as low as the Covid period.
If you recall, I talked about the potential interest rate impact on the Singapore property market at the beginning of the year. Lucky for Singaporeans, we have a prudent government to kick in the cooling measures in April to stop the property euphoria at the infant stage. But I think at some point, the rate hike repercussions will have to come into play in our local property market as well.
In parallel, the 10-year yield of the Singapore Savings Bond (SSB) has climbed to 3.32%, the highest in 2023. Let’s not forget that T-Bills have regained a yield exceeding 4%, one week earlier. These developments create a unique opportunity for bond investors.
However, it’s essential to recognize that bond investment, while seemingly straightforward, carries its complexities. You not only need to grasp the implications of interest rate movements but also effectively manage the risks associated with bond price fluctuations.
You may be surprised to know that many bond investors have faced losses exceeding those in the stock market in the past year.
To assist you in navigating this ever-changing interest rate landscape and to explore bond investment opportunities further, I’m planning a webinar “How to invest in bonds in a high interest rate environment” for our FRM members. Stay tuned for the invitation next week.
#2. TD Ameritrade Pulls Out of Singapore
TD Ameritrade, also known as thinkorswim, has made a significant announcement. As of December 2023, the company will cease serving retail investors in Singapore and pivot its focus exclusively toward accredited investors.
For those unfamiliar with TD Ameritrade, it stands as one of the most potent platforms for trading the US markets, particularly in options trading. I have personally used it for many years and have written some articles on options and futures strategies. Check them out.
- How to increase your stock portfolio return with option strategies
- How to hedge your stock portfolio risks using future contracts
It seems that the financial institutions have finally focused on profitability in a small market in Singapore. This is followed by the recent closing down of MoneyOwl and GRAB shuttering its investment products AutoInvest and Earn+.
#3. Legacy Planning Workshop: Embracing Trusts
When contemplating estate planning and wealth transfer, wills and Lasting Power of Attorney (LPA) are often the first thoughts. However, trusts are increasingly relevant as powerful tools in legacy planning.
Trusts enable you to transfer assets to a separate entity managed by a trustee, who follows your instructions to benefit one or more beneficiaries. They offer a multitude of advantages, including
- Efficiency, control over asset distribution,
- Care for vulnerable beneficiaries, and
- Protection from creditors and lawsuits.
For an in-depth understanding of how trusts can be integrated into your legacy planning, I’ve prepared a detailed article:
Additional Reading: Estate Planning Beyond the Will – The Crucial Role of Trust
If you are interested in learning more about how trusts can be incorporated into your legacy planning? Join us for our upcoming Zoom workshop where we’ll delve deeper into this topic.
That concludes this week’s newsletter. We hope you found it both useful and informative. If you have any questions or feedback, please don’t hesitate to comment below.
If you enjoyed this article, consider joining as joining our FIRE Retirement Membership (FRM) to fast-track your retirement journey.
Wishing you a week filled with financial insights and success.