Singapore Permanent Portfolio 10 Year Backtest

[Coearth]

@D1984: It was a discussion to voice our thoughts. No hard feelings here. I also apologize to you if my replies may have accidently offended you in any way. I am agreeable to leave our previous discussions as it is now. It is not really my intention to discuss those topics here. I look forward to more financial and economic discussions. I will try to help with your other questions if I can.

@MediumTex: I have been viewing crawling road website and this forum for a year now. I will continue to contribute to this forum to the best of my ability, and I think you guys at this foum are great to learn from. PP correspondent sounds fine, please verify my views first if needed, since I am not an expert on economics and finance.

I have updated first post of this thread with more detailed figures showing how the Singapore Permanent portfolio results are derived. Source is from Yahoo! Finance.

About storing gold overseas, I wonder if anyone here has explored feasibility of U.S. citizens storing gold in Singapore or Hong Kong, as compared to Switzerland? Singapore will exempt investment-grade gold, silver and platinum from the local 7% goods and services taxes (similar to VAT or sales tax) starting from October 1, 2012.  

[MediumTex]

@MediumTex: I have been viewing crawling road website and this forum for a year now. I will continue to contribute to this forum to the best of my ability, and I think you guys at this forum are great to learn from. PP correspondent sounds fine, please verify my views first if needed, since I am not an expert on economics and finance.

There is a PP correspondent application packet I will send to you to complete and return, including a views verification form.

Just kidding. 

[LazyInvestor]

@coearth: You say "25% Gold: UOB Gold Savings Account. Alternatively buy physical gold bullion or coins." Can you give us some more details about this UOB account such as safety, costs, insurance, and bank stability over there? How do you buy coins in Singapore? What are the choices and what's the premium?

[LazyInvestor]

Just Googled this interesting link about Singapore and gold

http://www.sovereignman.com/expat/intro ... gold-6089/

[Coearth]

@coearth: You say "25% Gold: UOB Gold Savings Account. Alternatively buy physical gold bullion or coins." Can you give us some more details about this UOB account such as safety, costs, insurance, and bank stability over there? How do you buy coins in Singapore? What are the choices and what's the premium?

Thanks for your questions. I found out a few more information about where to trade and store gold coins in Singapore. Recording all below information for my future reference also.

(A) UOB Gold Savings Account (GSA)
United Overseas Bank (UOB) is one of the 3 major banks in Singapore - UOB as well as the other 2 major banks (DBS,OCBC) are quite stable. UOB Gold savings Account (GSA) is similar to a cash savings account - I get a gold savings passbook upon account opening and minimum deposit of 5 grams of gold. Therafter I need to visit the bank branch personally each time I wish to deposit gold (convert cash to gold) or withdraw gold (convert gold to cash) - deposit/withdrawal is in Singapore dollars per gram of gold. I use Android app "Gold Silver Live Prices" to view gold price between Ounce and Grams.
An annual administrative fee (in grams of gold) as low as 0.12 gram per month or 0.25% per annum on the highest balance per month, whichever is higher. The annual fee is subject to GST, which will be deducted from the account in grams of gold. The 0.25% annual fees (or 0.2675% including GST) compares favorably against the local exchange's SPDR Gold Shares ETF (GLD/O87) 0.4% annual fees.
There is no commission, no 7% GST, no premium, for deposit/withdrawal of gold in the Gold Savings Account. There is a bid/ask price spread of 0.2 grams of gold at prevailing market rate when depositing and withdrawing gold. Gold is held in the bank's gold vault as unallocated gold - meaning it is gold set aside for all the entire gold savings accounts, so the gold is not alloted to each individual saver. Investments in gold and/or silver are not deposits and are hence not insured under Singapore's SDIC. GSA sems more applicable for Singapore Resident, need to check with UOB whether non-residents can open GSA.
Source: http://www.uob.com.sg/personal/investme ... etals.html
Price: https://uniservices1.uobgroup.com/secur ... prices.jsp

(B) Buying of coins in Singapore
Here I list 4 sources for gold coin/bar trading and storage that I know of. I have not tried any of below companies and have no dealings with them so far.

(B1) You can buy and sell Gold Bullion Coins, Gold Bars and Gold Certificates at UOB's Gold Department at UOB Main Branch, which is located at UOB Plaza, 80 Raffles Place.
Gold bar prices are based on the international gold price adjusted for the Singapore market conditions. Gold coin prices include a premium over the international gold price. Singapore's 7% Goods and Services Tax (GST) will be waived from 1 Oct 2012 onwards for investment grade gold (minimum 99.5% purity - e.g. Gold Coin Canadian Maple Leaf 2012 - 1oz
1 Troy Ounce (31.1 grams) .9999 Gold). (minimum 99.5% purity - e.g. Gold 10 oz Credit Suisse bar 10 Troy Ounces (311 grams) .9999 Gold - 100 boz). (minimum 99.5% purity - American Eagle Gold coins contains 91.67% gold and is NOT exempt from GST)
Various branches of UOB offer safety deposit boxes from S$120 onwards, or more commonly S$180 onwards.
Source:
http://www.uob.com.sg/personal/investme ... etals.html
Safety deposit box price:
http://www.uob.com.sg/assets/pdfs/perso ... ul/sdb.pdf
Note: Other banks safety deposit box pricing may differ.

(B2) Purchase from Swiss Precious Metal and store in Singapore Freeport (Tax Exempt)
Swiss Precious Metal seems to be the place for ultra high networth individuals to trade in gold and store in Sinagpore Freeport (free trade zone, tax free, subject to local laws). Insurance on the gold in Singapore Freeport can run up to 1% per annum depending on circumstances.
Sources:
http://online.wsj.com/article/SB1000142 ... 70746.html
http://www.swisspreciousmetals.com/prod ... vices.aspx
http://www.swisspreciousmetals.com/prod ... eport.aspx

(B3) Silver Bullion Pte Ltd
Silver Bullion Pte Ltd Silver Bullion transacts mostly silver and some gold. Silver Bullion Pte Ltd is located within the Singapore Auxiliary Police Certis CISCO Centre compound near Paya Lebar. Certis CISCO is Singapore's largest provider of armed security services, safety deposit boxes and precious cargo transport. After picking up bullions at Silver Bullion office, customer can go 2 floors down to Certis CISCO to deposit the bullion in Certis CISCO's personal safety deposit box. Online bullion store available.
Storage solutions -
 (i) Safe Deposit Boxes - Do It Yourself Storage:
Silver Bullion Pte Ltd is located in the same building that houses the majority of Certis CISCO safe deposit boxes and you can open an account with Certis Cisco when picking up your bullion. Access to these boxes is available to customers 365 days a year at a minimum 12 hours a day.
 (ii) S.T.A.R. Storage - Tax Free, Insured Storage:
As of early 2012 Silver Bullion Pte Ltd offers Secure, Tax Free, Allocated (fully), Reserved (S.T.A.R.) Storage in the Singapore Freeport.

Information from Silver Bullion Pte Ltd website -> 'Liquidity and Buyback' tab:
Foreign Clients - No Reporting Requirements
-Physical Bullion in Singapore is regarded as a physical good, not a financial product. Thus there is a sales tax (GST) but, unlike purely financial products, there are no reporting requirements (e.g. W-8 forms)
-Singapore does not have a capital gains tax
Source: http://www.silverbullion.com.sg/
Online Store Price:
http://www.silverbullion.com.sg/BrowseP ... px?DepID=3

(B4) GoldSilver Central Pte Ltd
GoldSilver Central (GSC) trades in gold, silver bullions, as well as buy gold jewelery of any fineness, be it 9k, 14k, 18k, 20k, 22k or 24k gold.  GSC has expanded their offering to include the storage of gold and silver bullion in the Singapore Freeport. The advantages of storing at the Singapore Freeport includes, insurance coverage; it is located in a free trade zone and customers are able to leverage on the global network that the vault company has already set up. This means that the precious metals stored at the Singapore Freeport has no boundaries and is able to be shipped to countries that are designated by the customers. Offers online bullion store.
Sources:
http://www.goldsilvercentral.com.sg/about-us
http://www.goldsilvercentral.com.sg/bul ... ge-program

I have some conclusions so far:
1. After 1 Oct 2012, 7% GST will be waived for Canadian Maple Leave Gold Coins and Credit Suisse Gold Bar (.9999 gold), while American Eagle Gold Coin (91.67% gold) will not be exempted from GST.

2. The 3 popular storage places for gold in Singapore seems to be:
a. Singapore banks safety deposit boxes,
b. Certis CISCO corporate and personal safety deposit boxes,
c. Singapore Freeport
Note: Certis CISCO is now a wholly-owned subsidiary of Temasek Holdings. Temasek Holdings is an investment company owned by the government of Singapore.

3. "Physical Bullion in Singapore is regarded as a physical good, not a financial product. Thus there is a sales tax (GST) but, unlike purely financial products, there are no reporting requirements (e.g. W-8 forms)" . THis statement is probably true, still, the accurracy of this statement needs to be verified.

Once again, I have only used UOB Gold Savings Account, and other than that, I have no dealings so far with any of the above listed gold trading and storage companies, and I am not affliated with them in any way.

[MachineGhost]

3. "Physical Bullion in Singapore is regarded as a physical good, not a financial product. Thus there is a sales tax (GST) but, unlike purely financial products, there are no reporting requirements (e.g. W-8 forms)" . THis statement is probably true, still, the accurracy of this statement needs to be verified.

Everything is reportable now over the 10K/50K thresholds, except for directly-held non-financial property, i.e. no bailee or custodian arrangements.  So in practical terms, you've got to go there and do it yourself or have shipping intermediaries receive your property at your storage location, which could be either a private vault or foreign real estate.  A lot of trust issues come into play if you're not there to personally interact.

[systemskeptic]

Definitely some interesting perspectives from Coearth.  The world is truly a big place, and if you haven't lived (or even grown up in) another country, you cannot truly understand how different the human perspective/condition really is.

I do see some "USA #1" pride here, which is somewhat interesting to watch as Coearth is obviously extremely intelligent and well mannered.  That said, with regards to Singapore's structure vs. the US and it's relation to "right" and "wrong" as well as the philosophical ideal of "perfect government", consider this:  Which comes closer to the ideal of achieving whatever goals it is you define for the social organization of the human race?

1. "Freedom and liberty" at the hands of a corrupt, ignorant "democracy" (majority) or

2. "Tyranny" at the hands of a perfectly benevolent and highly genius "dictator"?

[LazyInvestor]

Thanks Coearth for excellent detailed info!

[MediumTex]

2. "Tyranny" at the hands of a perfectly benevolent and highly genius "dictator"?

What always troubles me about the benevolent dictator model is that someday the enlightened ruler will die, and his son or top general is often not quite as kind as the old man was.

Monarchies throughout history have been continually reminded of this problem.

[MachineGhost]

2. "Tyranny" at the hands of a perfectly benevolent and highly genius "dictator"?

What always troubles me about the benevolent dictator model is that someday the enlightened ruler will die, and his son or top general is often not quite as kind as the old man was.

Monarchies throughout history have been continually reminded of this problem.

I see the problem with a monarchy, tyrant or dictator is there's no effective "separation of powers".  It is rule by the subjective whims of an idol.  So it is easy to overthrow the idol and its institutional machine, whether by coup, inheritance or war-unification.

If we look at the Middle East, North Korea and Cuba, there is something to be said for educating the children of tyrants by sending them to schools in the West.  It exposes them to the hypocrisy of their parent's rhetoric.  Yet, I don't think it takes anything specially nefarious to succumb to the Seven Deadly Sins when doing so is the path of least resistance.  There's a lot of other shadow people in the institutional machine that have a vested interest in maintaining and profiting from the status quo.

I think between judicial engagement and deliberative democracy, we're slowly getting a handle on how to reform government.

[stone]

Coearth, my impression of Singapore was that the government does intervene a lot to ensure that essentially everyone has decent housing, education and job prospects. Before independence, Singapore had a dire housing situation then after independence massive government intervention flooded the market with state built HDB flats http://en.wikipedia.org/wiki/Public_hou ... _Singapore and so housing became affordable and the economy could grow because money went into things other than bidding up the price of pre-existing housing stock.
Singapore is very impressive but it has tremendous government involvement in the economy (I'm not saying that governments elsewhere don't often cause more harm than good). To my mind Singapore is perhaps most like Scandinavia or Japan in terms of having a lot of government involvement in the economy.

I also got the impression that in Singapore everyone can afford a decent apartment and to travel by the superb public transport system but if anyone wants to look flash and drive a car and live in a house, then things suddenly become massively expensive.

[systemskeptic]

2. "Tyranny" at the hands of a perfectly benevolent and highly genius "dictator"?

What always troubles me about the benevolent dictator model is that someday the enlightened ruler will die, and his son or top general is often not quite as kind as the old man was.

Monarchies throughout history have been continually reminded of this problem.

What if your dictator wasn't human at all, and instead was a supercomputer programmed with the human ideals of justice, fairness, and compassion?  That would solve the pesky problem of aging 

The point here is that freedom, liberty, and majority rule require a uniformly high level of ethics and intelligence to result in a successful society.  It's much easier to find one person with high ethics and intelligence than a homogenous group of 300 million.  I think this partially explains how countries like Singapore can become very wealthy even when coming from a "poor neighborhood." 

A strong ruler with a smart vision and the interests of his people in mind can quickly raise a nation's standard of living.

[MediumTex]

2. "Tyranny" at the hands of a perfectly benevolent and highly genius "dictator"?

What always troubles me about the benevolent dictator model is that someday the enlightened ruler will die, and his son or top general is often not quite as kind as the old man was.

Monarchies throughout history have been continually reminded of this problem.

What if your dictator wasn't human at all, and instead was a supercomputer programmed with the human ideals of justice, fairness, and compassion?  That would solve the pesky problem of aging   

That might work really well, even for multiple generations, until one day suddenly The Machine Stops.

[bullionstar]

@coearth: You say "25% Gold: UOB Gold Savings Account. Alternatively buy physical gold bullion or coins." Can you give us some more details about this UOB account such as safety, costs, insurance, and bank stability over there? How do you buy coins in Singapore? What are the choices and what's the premium?

Thanks for your questions. I found out a few more information about where to trade and store gold coins in Singapore. Recording all below information for my future reference also.

(A) UOB Gold Savings Account (GSA)
United Overseas Bank (UOB) is one of the 3 major banks in Singapore - UOB as well as the other 2 major banks (DBS,OCBC) are quite stable. UOB Gold savings Account (GSA) is similar to a cash savings account - I get a gold savings passbook upon account opening and minimum deposit of 5 grams of gold. Therafter I need to visit the bank branch personally each time I wish to deposit gold (convert cash to gold) or withdraw gold (convert gold to cash) - deposit/withdrawal is in Singapore dollars per gram of gold. I use Android app "Gold Silver Live Prices" to view gold price between Ounce and Grams.
An annual administrative fee (in grams of gold) as low as 0.12 gram per month or 0.25% per annum on the highest balance per month, whichever is higher. The annual fee is subject to GST, which will be deducted from the account in grams of gold. The 0.25% annual fees (or 0.2675% including GST) compares favorably against the local exchange's SPDR Gold Shares ETF (GLD/O87) 0.4% annual fees.
There is no commission, no 7% GST, no premium, for deposit/withdrawal of gold in the Gold Savings Account. There is a bid/ask price spread of 0.2 grams of gold at prevailing market rate when depositing and withdrawing gold. Gold is held in the bank's gold vault as unallocated gold - meaning it is gold set aside for all the entire gold savings accounts, so the gold is not alloted to each individual saver. Investments in gold and/or silver are not deposits and are hence not insured under Singapore's SDIC. GSA sems more applicable for Singapore Resident, need to check with UOB whether non-residents can open GSA.
Source: http://www.uob.com.sg/personal/investme ... etals.html
Price: https://uniservices1.uobgroup.com/secur ... prices.jsp

(B) Buying of coins in Singapore
Here I list 4 sources for gold coin/bar trading and storage that I know of. I have not tried any of below companies and have no dealings with them so far.

(B1) You can buy and sell Gold Bullion Coins, Gold Bars and Gold Certificates at UOB's Gold Department at UOB Main Branch, which is located at UOB Plaza, 80 Raffles Place.
Gold bar prices are based on the international gold price adjusted for the Singapore market conditions. Gold coin prices include a premium over the international gold price. Singapore's 7% Goods and Services Tax (GST) will be waived from 1 Oct 2012 onwards for investment grade gold (minimum 99.5% purity - e.g. Gold Coin Canadian Maple Leaf 2012 - 1oz
1 Troy Ounce (31.1 grams) .9999 Gold). (minimum 99.5% purity - e.g. Gold 10 oz Credit Suisse bar 10 Troy Ounces (311 grams) .9999 Gold - 100 boz). (minimum 99.5% purity - American Eagle Gold coins contains 91.67% gold and is NOT exempt from GST)
Various branches of UOB offer safety deposit boxes from S$120 onwards, or more commonly S$180 onwards.
Source:
http://www.uob.com.sg/personal/investme ... etals.html
Safety deposit box price:
http://www.uob.com.sg/assets/pdfs/perso ... ul/sdb.pdf
Note: Other banks safety deposit box pricing may differ.

(B2) Purchase from Swiss Precious Metal and store in Singapore Freeport (Tax Exempt)
Swiss Precious Metal seems to be the place for ultra high networth individuals to trade in gold and store in Sinagpore Freeport (free trade zone, tax free, subject to local laws). Insurance on the gold in Singapore Freeport can run up to 1% per annum depending on circumstances.
Sources:
http://online.wsj.com/article/SB1000142 ... 70746.html
http://www.swisspreciousmetals.com/prod ... vices.aspx
http://www.swisspreciousmetals.com/prod ... eport.aspx

(B3) Silver Bullion Pte Ltd
Silver Bullion Pte Ltd Silver Bullion transacts mostly silver and some gold. Silver Bullion Pte Ltd is located within the Singapore Auxiliary Police Certis CISCO Centre compound near Paya Lebar. Certis CISCO is Singapore's largest provider of armed security services, safety deposit boxes and precious cargo transport. After picking up bullions at Silver Bullion office, customer can go 2 floors down to Certis CISCO to deposit the bullion in Certis CISCO's personal safety deposit box. Online bullion store available.
Storage solutions -
  (i) Safe Deposit Boxes - Do It Yourself Storage:
Silver Bullion Pte Ltd is located in the same building that houses the majority of Certis CISCO safe deposit boxes and you can open an account with Certis Cisco when picking up your bullion. Access to these boxes is available to customers 365 days a year at a minimum 12 hours a day.
  (ii) S.T.A.R. Storage - Tax Free, Insured Storage:
As of early 2012 Silver Bullion Pte Ltd offers Secure, Tax Free, Allocated (fully), Reserved (S.T.A.R.) Storage in the Singapore Freeport.

Information from Silver Bullion Pte Ltd website -> 'Liquidity and Buyback' tab:
Foreign Clients - No Reporting Requirements
-Physical Bullion in Singapore is regarded as a physical good, not a financial product. Thus there is a sales tax (GST) but, unlike purely financial products, there are no reporting requirements (e.g. W-8 forms)
-Singapore does not have a capital gains tax
Source: http://www.silverbullion.com.sg/
Online Store Price:
http://www.silverbullion.com.sg/BrowseP ... px?DepID=3

(B4) GoldSilver Central Pte Ltd
GoldSilver Central (GSC) trades in gold, silver bullions, as well as buy gold jewelery of any fineness, be it 9k, 14k, 18k, 20k, 22k or 24k gold.  GSC has expanded their offering to include the storage of gold and silver bullion in the Singapore Freeport. The advantages of storing at the Singapore Freeport includes, insurance coverage; it is located in a free trade zone and customers are able to leverage on the global network that the vault company has already set up. This means that the precious metals stored at the Singapore Freeport has no boundaries and is able to be shipped to countries that are designated by the customers. Offers online bullion store.
Sources:
http://www.goldsilvercentral.com.sg/about-us
http://www.goldsilvercentral.com.sg/bul ... ge-program

I have some conclusions so far:
1. After 1 Oct 2012, 7% GST will be waived for Canadian Maple Leave Gold Coins and Credit Suisse Gold Bar (.9999 gold), while American Eagle Gold Coin (91.67% gold) will not be exempted from GST.

2. The 3 popular storage places for gold in Singapore seems to be:
a. Singapore banks safety deposit boxes,
b. Certis CISCO corporate and personal safety deposit boxes,
c. Singapore Freeport
Note: Certis CISCO is now a wholly-owned subsidiary of Temasek Holdings. Temasek Holdings is an investment company owned by the government of Singapore.

3. "Physical Bullion in Singapore is regarded as a physical good, not a financial product. Thus there is a sales tax (GST) but, unlike purely financial products, there are no reporting requirements (e.g. W-8 forms)" . THis statement is probably true, still, the accurracy of this statement needs to be verified.

Once again, I have only used UOB Gold Savings Account, and other than that, I have no dealings so far with any of the above listed gold trading and storage companies, and I am not affliated with them in any way.

Since the lifting of GST in October 2012, there has been an increase in interest in purchasing and storing precious metals bullion in Singapore. BullionStar Pte Ltd took advantage of that and set up it's operations in Singapore in July 2012 and we have been seeing a wide range of customers, both locals and foreigners who are keen to store their bullion in a safe and secure country with minimal influences from governments of other countries. One feature that sets us apart from the other dealers in Singapore is that we offer a minimum of 2 years of free storage for customers who bought bullion from us and wish to store it in Singapore. We work with a reputable international vault operator who operates from the Eastern part of Singapore, near to the airport. Beyond the two years, we are looking to keep the storage for free as well. All your bullion that are stored with us are fully insured by the vault operator. To further ensure customers that we are indeed storing their bullion, we will be taking photos of the bullion and then uploading to our customer's accounts to show them their bullion.

For more information, you could kindly contact support@bullionstar.com or head on down to our easy to use website at https://www.bullionstar.com/