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Tag: recession

Which is My Best Option to Fund My Condo Purchase? (Guest Post)

Which is My Best Option to Fund My Condo Purchase? (Guest Post)

A long time reader wishes to purchase a condo that is valued at $1.65 million. Currently, the family is staying at a 5-Room HDB valued at around $500,000 that is fully paid-up. This HDB can potentially rent for a gross rental income of $2,500 a month.

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This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 995  followers.

He considered 3 options.

Option 1:

  1. Sell current HDB
  2. Use the sales proceed + CPF + cash to buy the condo
  3. Do not leverage up

Option 2:

  1. Sell current HDB
  2. Use the sales proceed + CPF to purchase
  3. Also loan $300,000

Option 3:

  1. Keep HDB
  2. Use CPF + some cash to buy a condo
  3. Also Loan $900,000
  4. This will incur an additional ABSD of $198,000 since this is the second property they would own.

Other assets the family own include:

  1. CPF OA: $900,000
  2. Cash: $500,000
  3. Stocks and Bond: $1,500,000

So he asked for my second opinion. I can’t give much advice since I am not his planner. But I think I can provide him some guidelines how he can go about to identify which option is most ideal for his situation.

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Is Time Running Out For Keppel And Sembcorp Marine As Oil Collapses Below Zero? [Guest Post]

Is Time Running Out For Keppel And Sembcorp Marine As Oil Collapses Below Zero? [Guest Post]

This week saw an unprecedented drop in oil prices to a negative level, almost -$40/barrel to be exact. Such a phenomenon has not happened in the past and it was largely the result of paper traders and Oil ETFs dumping their expiring May contracts “by all means” as buyers disappear.

This post was originally posted here. The writer, Royston Tan is a veteran community member and blogger on InvestingNote, with username known as Royston_Tan.

Since then, WTI oil prices have recovered to roughly $17/barrel as of this writing, a positive figure but not a “champagne popping” price level.

IS TIME RUNNING OUT FOR KEPPEL CORP AND SEMBCORP MARINE?

Keppel Corp posts 40% drop in 1Q earnings to $203 mil on lower one ...

The significant collapse of oil prices does not bode well for both Keppel and Sembcorp Marine. Yes, they do not derive their revenue directly from the sale of oil but indirectly in the form of newbuild contracts for production/drilling-related assets.

The problem is that with oil prices that low amid an oil glut scenario, no oil company in their right frame of mind will be contracting large newbuild orders from yards in the near term, in my view.

Can the existing backlog of Keppel and Sembcorp Marine support revenue recognition?

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What You Should Do if You Lost Your Job Or Lost Your Income Temporarily (Guest Post)

What You Should Do if You Lost Your Job Or Lost Your Income Temporarily (Guest Post)

Which direction should you take, the urgency of how you should perform things, will depend on how great or how dire is your current situation. Here are some things that you need to evaluate…

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 967  followers.

How prepared is Washington for a recession? - Lens

I started work after we came out from SARS in 2004. So I have been through the mental aspect of not knowing if you have a job when you graduated from university.

2008 was different in that I was already working but in my old company, the email will announced new hires every week.

This COVID-19 thing is a bit different. Not sure if it is because as an almost 40 year old, there are more people being furlough or retrenched.

I have not been retrenched before. Friends have shared with me that my old place is an iron rice bowl.

In the current workplace, we are doing OK, at least for now.

I am not going to be that guy to tell you what you should do.

I have read a few stuff out there and while they point you to resources such as the Ministry of Manpower, what are your rights, where to get support aid, they do not show you money-wise how you should pivot.

I came across some of these stuff in podcasts in the past. I think they might prove useful for you at this time.

  1. A part of the content explores what you should do if you are laid off.
  2. There is also the part of the content where you are not laid off but you need to fortify your work position.
  3. Lastly, there is a little bit exploring about coming up with backup plans

Let’s minimize on flowery words and get straight to the content.

Take Stock of Your Current Situation

Which direction you should take, the urgency of how you should perform things, will depend on how great or how dire is your current situation.

Here are some things that you need to evaluate:

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3 Key Points To Lookout For When Buying Stocks In A Recession (Guest Post)

3 Key Points To Lookout For When Buying Stocks In A Recession (Guest Post)

A recession is a significant decline in economic activity, lasting more than a few months. But many asked, when to buy stocks? How to better time a market entry in a recession? Well, here are 3 points to guide you along.

This post was originally posted here. The writer, Royston Tan is a veteran community member and blogger on InvestingNote, with username known as Royston_Tan and has 22 followers.

A Looming Recession? Look at Interest Rates - WSJ

For those looking to time a market entry, some data points on when might be a good time.

WHEN TO BUY STOCKS IN A RECESSION? THE IDEAL TIME TO PICK A BOTTOM

While I don’t recommend trying to time stock purchases with a crystal ball in front of you, especially during a bear market potentially as severe as the one we are currently facing, I will provide some reference point as to when might be the IDEAL time to PICK a bottom and start investing more aggressively in a recession.

This is not going to be from my GUT but instead using historical statistics to time entry. YES, I know that historical performance is never representative of the future trajectory of the stock market, especially one that is seemingly unprecedented as the current one.

Then again, having some maths behind you beats randomly pulling out some FORECAST based on your gut.

Before I disclose “my formula” on when to buy stocks in a recession, the question I like to ask is: Are we already in a recession? Seems to be a no-brainer question especially with more than half the world being on lockdown, right?

WHAT DEFINES A RECESSION?

A recession is a significant decline in economic activity, lasting more than a few months. There is a drop in the following 5 economic indicators:

  1. Real Gross domestic product (GDP)
  2. Income
  3. Employment
  4. Manufacturing
  5. Retail Sales

The current situation seems to tick all the boxes in this category.

A “simpler” definition for a recession is when the GDP growth rate is negative for two consecutive quarters or more. While it might seem simple, there might be some confusion. Should we be measuring GDP growth on a YoY basis (ie compare 1Q20 to 1Q19) or should we be measuring it based on QoQ (ie comparing 1Q20 to 4Q19).

The latter comparing on a QoQ basis is often being termed as a “Technical Recession” within the Singapore context (If you type technical recession in Google, most of the results are related to Singapore).

HOW DOES THE US CALCULATE GDP GROWTH?

In the US, the Bureau of Economic Analysis uses real GDP to measure the US GDP growth rate. Real GDP takes out the effect of inflation. GDP is calculated every quarter but is being annualized. The aim of annualizing is to remove the effect of seasons. If the BEA did not do this, there will always be a spike in the 4Q growth rate due to the holiday seasons.

The BEA provides a formula for calculating the US GDP growth rate which I will not detail much in this article.

IS THE US ALREADY IN A RECESSION?

NEW YORK CITY TIMELAPSE (EMPTY AMERICA) — fullinsight

Depending on which article you read, some might say that the US is already in a recession while others such as this Bloomberg Tracker (last updated March 11) which pegs the probability at “only” 53%, still the highest level since GFC. However, that tracker was done before the jobless claims blew up over the past 2 weeks, now more than 10m, so I reckon that probability ratio will probably be inched up significantly in the next update.

Given the COVID-19 scenario that we are facing, whether we choose to look at GDP growth from a YoY or QoQ basis, it is difficult to argue against the fact that US GDP growth will be negative in 1Q20 and 2Q20.

Even if the COVID-19 issue miraculously resolves itself today, the uncertainty surrounding a possible relapse will result in nations all over the world engaging a protectionist stance that will stymie the global economic recovery process.

My best guess, if I am to look into my crystal ball is that the peak of the COVID-19 issue for developed nations such as US, Italy and Spain will probably be sometime in late-April to early-May by which the focus will then turn to developing nations such as India and Indonesia where cases are just beginning to ramp up.

Developed nations will continue to shut off their borders to foreigners for fear of a relapse, just like what China is currently doing. The V-shape recovery which many people are hoping for is probably not going to happen in such a scenario.

HOW BAD IS THIS RECESSION GOING TO BE?

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