World's Simplest Market Alert Tool - Interview With Daniel Chia, Professional Investment Manager and Co-Founder of Call-Levels

Recently on Monday, I met up personally with 2 of the co-founders, Daniel and Cynthia, of a new app called call-levels. In this post, I'll be featuring Daniel Chia, who has a vast amount of experience in the financial industry. Learn from a professional investment manager on what he has to say about making money from the markets. Learn how a newly launched free-to-use app can help us in our investment and trading decisions.

Credit: https://www.call-levels.com/

About Daniel Chia

Daniel Chia has always been fascinated by numbers. A Cambridge graduate who earned his Masters in Mathematics and Statistics from Harvard University, Daniel spent nearly a decade at Sovereign Wealth Funds and Hedge Funds.  He was a key part of the Quantitative Trading Team at GIC, and was a Portfolio Manager at Asia’s largest systematic macro hedge fund, where he built and traded systematic models predicting and exploiting market sentiment and bias. The experience Daniel has gained through his academic and professional career has helped him identify and build a tool to overcome the largest obstacle standing in the way of good investment decisions.


1. Tell us more about yourself and how you got started in your career in the financial industry?

I’m Daniel Chia, a professional investment manager for the last 10 years with a life long interest in portfolio management. I’ve always been interested in finance, first from a mathematical perspective (I’m a math major), but I’ve gained more experience, from a behavioural perspective, i.e. how sentiment and greed/fear can affect your approach to the markets.


2. What are your views on trading vs investing? Many young people want to earn quick money from trading. Do you have any advice for them in terms of growing their wealth?

To me there is no difference between quick money and slow money. The most important thing in the end is ensuring that your strategy can take risk smartly and make money.

I think that the difference between trading and investing is:

a) holding time of assets and
b) liquidity of assets.

The risks are different. I’ve seen many traders burn out as they are 24/7 in the markets and also long term investors panic when the market turns and liquidity dries up to the point that they are looking for a return of their capital, not a return on capital. As you grow your wealth, it helps to know what risks you are most comfortable with.

Traders quickly learn that the markets have no rules, and the only rules that can be controlled are those that the traders impose on themselves. This can be overwhelming for new beginners as they cope with the psychological impact of taking risk and potentially losing money. The priority of any trader is to survive. This means being able to adapt to the markets, and eliminating as many rookie bad habits as possible. Each error eliminated is money saved, and each dollar saved can be put into taking risk. What is the one bad habit that most beginner traders make?

They Can’t Stop Watching Prices!

This is counter-intuitive: every trader will tell you that “Each Trade is Important”. When I started trading, I too took this adage literally and tried to watch prices all the time. Literally, all the time, in front of a Bloomberg, staring the numbers flash green and red. I was looking at charts, calculating profit and loss all time. I realised in due time that this was a bad habit, and possibly the worst habit I could have. It made me unable to turn off, built anxiety, and worst of all, caused me to doubt my own investment strategy. It sapped energy from when I really needed to be active, during major market moves which occur only during 5% of the time I spent watching markets. This problem becomes more dangerous with the introduction of mobile trading apps, meaning that traders are now able to watch prices wherever they are. Many traders are now unable to switch off from prices, and the pressure to adjust on the fly means they deviate from their strategies and trade more frequently.



3. What are your own personal investments or trading strategy? Are you more short term or long term?

When I started trading I was reactive, finding market strategies that reacted to tactical events and changes in outlook and sentiment.

As I gained experience I found it more sustainable to be predictive, building longer term themes and strategies in the markets and finding times when overreaction occurs for good entry and exits. I’ve been able to build quantitative models that can do some of the work for me, which really helps.

Now I’m trying to be more proactive, the best trades in the market are those that I personally can influence and improve, and I am trying my best by setting up and leading a start-up - Call Levels.

4. How would the new app, Call-levels,  help us in our own personal trading and investments?

Call Levels is the simplest tool you can have that fulfils the most basic need of the market. To be able to set price alerts easily and receive them reliably is something everyone needs.

To survive in the markets you have to make sure your tools are simple and work well. And we aim to be the most reliable tool in the market. We have had fund managers tell us that alerts in Call Levels were comparable to their $3,000+ a month Bloombergs - we’re constantly trying to improve the product to make it even better!

Call Levels is extremely simple, you cannot price watch, because there are no flashing prices, but you can set prices so that you can be aware of the market, but only when it moves. Price watching, especially when there is nothing happening in the markets, is bad, it tires you, makes you anxious, and takes your attention away from the 10% of the time when the market really moves and you need to be there.


5. Where can they get the app now?

It is out available on iTunes for iOS users. bit.ly/call-levels. Any feedback will really help at this early stage!


6. The app will be available for Android users as well as the introduction of equities and indices feature soon. When will it be released?

We are targeting Jan 2015 for Android with Equities and Indices.


7. Lastly, since you’ve been in the financial industry for many years, do you have any advice for young people who would want to join the financial industry as their career?

Be honest, humble and keep trying to learn and find out more. And keep in mind that wealth is more than money, do remember your health, friends and family. To help that do try Call Levels, we watch the markets so you don’t have to!


To find out more about the Call-Levels App, do visit their website at: https://www.call-levels.com/

They are looking for feedbacks on the App itself and also any suggestions on additional features which you think is useful to be included in the App. Comment below to leave your suggestions or send me an email at sgyounginvestment@gmail.com.

I think the app is something that is very useful and easy to use for us who trade or invest in the markets. I'm personally looking forward to the equities feature which will be released in Jan 2015. We were also talking about the possibility to include additional features such as alerts based on P/E, P/B ratio or any others. Feel free to give your suggestions. Share it with your friends and family. Download and try out the free app today!

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Changes to the CPF - CPF Focus Group Discussion

Few months ago during the national day rally speech by the Prime Minister, it was announced that there may be possible changes to the CPF scheme to allow for more flexibility. A CPF advisory panel was appointed by the Ministry of Manpower in September 2014 to study possible enhancements to some key aspects of the CPF system, to make it more flexible to meet the needs of more Singaporeans and provide additional options in retirement.

I was at the first CPF focus group discussion last Saturday. I got to meet and interact with a few other people and know what were the concerns they had with regards to the CPF system. CPF was not a topic of interest to me until somewhere this year when I started to hear a lot of negative things about it. I had no idea what is the Minimum Sum or what it means. What I only know was that a portion of my salary is deducted every month into the CPF.

Because of the negativity spreading around, I decided to look deeper into what was going on. Writing a financial blog at that time also spur me to produce an article on the CPF system which I wrote here: All about CPF minimum sum and CPF life. My conclusion is, CPF is a social safety net that is for our basic retirement needs. Without it, our society may be in chaos with people having no money for even the basic necessities such as food during retirement.

But, as with every system, there will always be more improvements to be made. Many feedbacks were given and I personally heard from readers who emailed me as well as friends, family and colleagues who discussed about the CPF. As a young person living in Singapore, I see some of my older colleagues regret that they did not plan for retirement earlier in their lives. They had to continue working even when they don't like it. They do not have a choice to do what they like in life rather than just working in something they don't like.

During the focus group discussion, we formed into groups of 6. My group had only 5 person with 2 of the advisory panel members sitting in to listen. We could interact and discuss relatively well with the small group.

The 3 questions that we discussed were:

1. “How much of your retirement expenses should be covered by payouts from your CPF savings? And how much will you need to cover your basic expenses?”
2. “How much should be allowed to be withdrawn at a lump sum at 65, bearing in mind that withdrawing this amount will lead to lower CPF payouts?”
3. “If there was a CPF LIFE plan that had lower payouts at the start, but increased every year to help with increases in the cost of living, would you opt for it?”

I shall not elaborate further on what the general answers were during the discussion as you can probably read from news report by the media. They did quite a good job capturing what was being discussed during the focus group discussion.

For myself, here are my personal views to the 3 questions:

1. “How much of your retirement expenses should be covered by payouts from your CPF savings? And how much will you need to cover your basic expenses?”

I would like CPF to cover all of my basic necessities such as food, utilities bills, transport etc. In today's dollar value, a figure of $1000/mth would be quite comfortable. This is just for basic expenses


2. “How much should be allowed to be withdrawn at a lump sum at 65, bearing in mind that withdrawing this amount will lead to lower CPF payouts?”

Withdrawing a lump sum at age 65 is not needed if we have adequate money for retirement. I would choose not to withdraw any lump sum unless I really have no savings left. The money in the CPF still earns a 4% risk free interest in the retirement account. Moreover, having $155,000 inside the CPF at age 55 would give us an estimated $1200/mth for the rest of our lives starting from age 65. At 4% interest rates, the $155,000 in your RA account would grow to an estimate of $229,437 when you reach age 65 (assuming there are no further contributions). If we calculate, this would mean a 6.27% annual draw down rate (($14,400 divided by $229,437)*100%). This is not a bad draw down rate at all considering you get payouts for the rest of your life under the CPF life scheme.


3. “If there was a CPF LIFE plan that had lower payouts at the start, but increased every year to help with increases in the cost of living, would you opt for it?”

This question is tricky. I think starting to draw down at age 65 is already late and if we still get lower payouts at the start, then the amount becomes very little. With a fixed payout, there would be a worry of not having enough in later parts of our lives but I guess who still cares about increase cost of living when they are in their 70s?


I don't really like the idea of only drawing down our CPF at age 65. Since there're considerations to make the CPF more flexible, perhaps there could be an option to draw down earlier but of course with lesser payouts. An example would be to draw down maybe $900-$1000/mth at age 60 instead of $1200/mth at age 65. This is just my suggestion.

I did ask around and I always hear that draw down age at 65 is too late. Perhaps age 60 would be a good age to starting drawing down their CPF. A concern was that those who are above 60 risk losing their jobs more than anyone else.

There will be more focus group discussions organised for the next few months. If you are interested to participate for the subsequent focus group discussions, please refer to this website for more information: www.cpfpanel.sg. You can sign up for the discussions through the website directly. Information on the next available sessions are also listed on the website itself.

You can also send in your views and feedback on the CPF by emailing to cpf_panel@mom.gov.sg

I did talk to some of the advisory panel members and they were sincere in listening to feedbacks so they can make better informed decisions. We can all do our small little part to give our ideas and suggestions.

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Planning ahead [Guest Post]

This is a short guest post by Young. He has written a few other posts for my blog previously.  

Recently, there was an article in the papers regarding how young Singaporeans were frivolously spending on designer handbags. Read the article here.

It appears that many netizens were quick to condemn and I can definitely understand why given their estimated monthly pay mentioned in the article. (SGYI: The salary was just a mid four figure salary)

Who’s right? Who’s wrong? Is there even a right or wrong in the first place? I think not. There is no right or wrong. Some of the individuals quoted in the article state that they don’t feel pain spending the money and neither do they save up to fund these purchases.

Should we criticize these people? I think everyone has their own opinions but at the end of the day; the bottom line is that so long as one is able to justify his or her actions, it is entirely prerogative to do what they wish to.

Of course, one can never go wrong with saving what they can and I definitely stand by that going forward. Maybe youths aren't interested in learning to invest; but the act of saving itself, is definitely commendable at least to me.

I hope you enjoyed reading my brief post and have a great weekend!

In Summary, I feel that at the end of the day, one should know better what is best for oneself. Do not be overly tempted by decadent, opulent or frivolous lifestyles. Money out will always be easier than money in.

My thoughts: 

Many young people now grow up in more well to do families. Recently I have a friend who got a brand new BMW from his father. He knows his family is rich so he also spends most of his own money and don't find the need to plan ahead or save up for his future. Many of us may envy people who are born in rich families or envy people who get to live luxuriously but life gets boring without challenges. 

We don't have to envy the lives of others. The value of money is lost when we spend recklessly. One day we'll wake up and realise how ridiculous are the items we bought when we finally realise the need to plan ahead. 

How Not To Be a Cheapskate In Your Journey To Financial Freedom

In my journey to financial freedom for the past one year since I started this blog, many other people have joined in to start their own journey too. Some are younger than me, some are the same age as me while some are older than me. What is common is that we're all on the same path to financial freedom.

I have posted more than 230 articles on this blog on a wide range of topics from personal finance to investments to success stories and even life lessons. In this journey, often we'll ask ourselves how to balance between saving money and spending money. Swinging to either extremities may not be healthy for our lives in the long run. Imagine because young people want to save money and they have to abandon their social lives of hanging out with friends at shopping centres? Or worse still when you go dating, you get labelled as a cheapskate. I'm sure we do not want this kind of life.

Living a cheapskate life is never good. However, thinking that frugality is synonymous with cheapskate is also wrong. They are 2 completely different lifestyle. When we're older and free from the dating world or the need to belong to a certain younger generation of society, then being cheap works perfectly fine for you. But the problem is for young people. Being young means having the desire to be part of a society, to feel belong to a group of people and having some social status. I've been young and am still young by society standards. Telling young people to be separated from society and become some unusual weirdo is never good.

Credit: https://www.flickr.com/photos/51764518@N02/9759057675/

Nowadays, you mostly don't see a group of young students hanging out at hawker centres or coffee shops. Where are most of them? They are either in nicely decorated Cafes, fast food joints like MacDonald or at the cinema watching movies. This is the lifestyle and if you're a young person right now, you probably have to or is doing that to be part of your group. Also, you mostly see young students with trendy and nice clothes during the weekends. Now the question is, will they still be able to save money with this kind of lifestyle?

I was chatting with a friend on this cheapskate issue which revolves around the furniture that we buy. There was an issue that a certain brand of furniture was thought to be valued for money just because it is cheap. However, the problem is most people who buy that brand of furniture realises that it is not durable and falls apart easily. What attracted consumers to buy is the design and what appears to be good quality material but underneath it hides the cheapskate materials that easily dents. But however, buying cheapskate stuffs does not save you money at all. The plan is to make you buy again and again. This is consumerism which I've discussed on in a previous article here.

Buying good quality stuffs saves cost in the long run. It saves the environment too by minimising wastage. A cheapskate person buys stuffs which is cheap and thought to be value for money. A frugal person buys stuffs which is of good quality and yet spends less to own it. This is the distinct difference between cheapskate and frugality.

So How Not to be a Cheapskate and still be able to achieve financial freedom? Here are some ways:

1) Know that being Frugal is not equal to being Cheap. Frugal doesn't mean you own all the crappy stuffs.

Being labelled as a cheapskate is never a good thing. Thinking that frugality is equal to cheapskate will destroy your life. Frugality is a trait while cheapskate is a social disorder. If you save money by taking advantage of others such as not paying for bills, waiting for someone to treat you for a meal, then its cheapskate.

Here's a funny video to illustrate what it means to be cheapskate:

*Warning: Don't do what the video shows if not you'll become a cheapskate

The video is funny. I had a few good laughs on some of their ideas. A frugal person does not take advantage of others. Only a cheapskate does. Frugality is not about owning all the cheap and crappy stuffs. For example, a frugal person can own a branded $100+ pair of shoe and know that it can last for many years vs buying a cheap $20 shoe which can only last for 1 year.  

2) Live like a Spartan when nobody's around

We need to socialise to make friends and build network. These are the times we hang out at Cafes and have meals at restaurants. When you're out dating, it's appropriate to pick up the bill and give a treat to your girlfriend. Even when you're out with friends, paying for the drinks goes a long way for the friendship that you have. It doesn't hurt to pay that little money which strengthens relationships. 

However, when you're alone and nobody's around, you can start living your simple life again. Buying simple groceries and cooking at home is great. Relaxing with an interesting book instead of an iPad seems like a good idea. Nobody will see you as a cheapskate when you're alone. 

3) Get more for less

Believe it or not, it is impossible not to spend any money. You got to spend money for that formal shirt, pants or skirts for your first job interview to look presentable. You got to spend on socialising to build up your network especially during the early days of your life. For young people, you got to date to get a girlfriend. That cost money too. Some of us might want to go on an overseas trip at least once a year to take a break from work. Yes, that is important too to let you recharge from working the whole year.

Since we have to spend money, we might as well spend it smartly. There are discounts all over the city. With the internet, it is even easier to compare products and get the latest discounts. I can buy that same piece of shirt that usually cost $80 for $30. I can get the same plane ticket that usually cost $500 for $200. I can watch the same movie at the same cinema for $9 instead of $12. All these discounts happen all the time. We can get the same product but at a lesser price.

Let me give you a specific example. For plane tickets, it gets easier to travel with budget airlines such as Jet Star, Scoot and Air Asia. But do you know these budget airlines still offer discounts even though their tickets are already cheap? Discounts happen almost every week with special discounts once a month or every few months. Sign up for their newsletter and if you just wait for a few more days before you book your tickets, you might get that $200 plane ticket instead of the $500 ticket.

Let your financial journey not be a cheapskate but a meaningful one.

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Related Posts:
1. Going from working middle class to rich with a simple tweak
2. How do you spend your money?

The search for a better quality of life

All humans desire a better quality of life. When we are poor, our basic instinct was just to find food for survival. When we have enough food, we would like something more such as a nice house or perhaps a car. Then we go on to buy nice clothes and accessories and shoes. The list goes on and on. Soon, we find ourselves caught up in consumerism. We buy more items but use less of each item. The more we buy, the less we use.

Now, think about the past when you were still a student with little to no money. You probably just had one pair of shoes and it was precious to you. When you do get a new pair of shoe after wearing it for many years, it feels great. That was the time you were living in frugality. As a student with limited cash, you try to get the best deals when you dine out. You try to only buy during a discount.


Consumerism vs Frugality

It'll not be easy to explain the difference between consumerism and frugality to someone who has been living a consumerism lifestyle since young. Some how, people who are living in consumerism will find that frugal people are sacrificing too much and not living a good quality of life. They would say "Why save money when I can spend money to buy happiness?" To them, saving money is sacrificing their quality of life. However, today, I found out that living a frugal life may not be a sacrifice. It could in fact lead to a better quality of life. Let me explain using a simple analogy.

People living in consumerism like to buy lots of stuff. They think that since one shirt is good, another one will make it better. They have a wardrobe full of clothes and maybe even more than 2 wardrobes of clothes. They have a shoe cabinet with more than 10 pair of shoes. They may also have many different bags and accessories. But, if you ask them if they do wear all those clothes, those shoes or even carry those bags, very often you'll hear that they had only wore it once or twice or never wore it before. Many of them still only use those few that they like better and dump the rest at one side.


Quality, not Quantity

This is the same with food. Having a plate of spaghetti is good but doesn't mean having another plate will be better. When you're hungry, more food will be good. When food is scarce, more is good. But when you're full and more food comes to your table, you feel disgusted. A scarcity mindset will result in consumerism. Buying more of the same stuffs does not make your life better. In fact, it's the direct opposite. So how do we go searching for a better quality of life? Here's the answer: Quality is the key, not quantity. Let's go back to the example on food. It doesn't make sense to keep buying more quantity of food when you're full. If we don't buy more food, we can focus our energy and resources to buy better quality food.

Now, when we translate this idea to the clothes, the shoes and all those stuff, we should also buy lesser but better quality ones instead of just more quantity of it. So, who buys lesser quantity and better quality stuffs? The answer is the truly frugal people. Frugality is defined as the prudence in avoiding waste. Frugal people do not like to waste resources. This means when they buy something, they make sure they really use it and not dump it at one side when they get home. Maximizing the use of resources is their forte. If they buy food, they make sure they finish and not waste any of it.

Sometimes, a similiar can of drink cost $1 here but $3 elsewhere. Yes, it does happen. For me, if I know I can get a $1 drink somewhere near, I will find it difficult to buy a $3 can of drink. Even though $3 is nothing and I can definitely afford it, but I know this $3 can be used to buy a decent meal instead of just a can of drink. It'll be foolish to pay more for less (sometimes I still do it if there's no choice). I can get better quality out of the $3.

Having a better quality of life for frugal people is easy. Instead of wasting the effort and money to buy more of a similar stuff, the effort is put into finding a better quality of it. In this way, our quality of life increases. We get better for less. We can find better deals but still get the same quality goods. We can get value out of a frugal lifestyle. This is the search for a better quality of life. Rich people are frugal and they lead a better quality of life.

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Related Posts:
1. Going from working middle class to rich with a simple tweak
2. Practising Frugality to Achieve Happiness in a High Cost of Living Environment
3. Your Perspective of Luxury and an Experience