3 Things that will make your relationship successful in Thailand

[Jingthing]

Hi there,

 

I've only done mutual stock funds before but for complex reasons I want to sell all of those and buy ETFs and bonds or bond funds.

 

Any tips for a beginner on making decent picks? Especially with the ETFs.

 

Either resources or specific ideas? 

 

I find bonds boring but I'm at an age where it's probably wise to get more into that.

[Gecko123]

Would shy away from bond funds and ETFs and steer more towards individual bonds. The problem with bond funds and ETFs is that while the individual bonds in the fund/etf mature, the bond fund/etf itself never matures. As the prevailing interest rate rises, the value of the bonds in the fund/etf goes down, and if you want to sell you can only do it at the current fund/etf price. Better to create a bond ladder (staggered maturities) of individual bonds to match projected withdrawal needs. Total US and global debt (government, corporate, individual) is at record highs, so would stick to highest rated (AAA) bonds. Yield curve is flattening which is flashing warning signals about upcoming economic slowdown, which is additional reason to steer clear of junk or low rated bonds. Two to five year maturities look attractive to me right now (additional yield for 10-30 years not worth it right now). US Treasury strips (not to be confused with TIPS) offer an additional yield over standard US Treasury bonds. Might want to transition to bonds over a 6 month period rather than all at once just to hedge your bets.

Edited July 30, 2018 by Gecko123

[Jingthing]

Are people finding the paid Motley Fool service useful?

Sent from my Lenovo A7020a48 using Thailand Forum - Thaivisa mobile app

[Jingthing]

Would shy away from bond funds and ETFs and steer more towards individual bonds. The problem with bond funds and ETFs is that while the individual bonds in the fund/etf mature, the bond fund/etf itself never matures. As the prevailing interest rate rises, the value of the bonds in the fund/etf goes down, and if you want to sell you can only do it at the current fund/etf price. Better to create a bond ladder (staggered maturities) of individual bonds to match projected withdrawal needs. Total US and global debt (government, corporate, individual) is at record highs, so would stick to highest rated (AAA) bonds. Yield curve is flattening which is flashing warning signals about upcoming economic slowdown, which is additional reason to steer clear of junk or low rated bonds. Two to five year maturities look attractive to me right now (additional yield for 10-30 years not worth it right now). US Treasury strips (not to be confused with TIPS) offer an additional yield over standard US Treasury bonds. Might want to transition to bonds over a 6 month period rather than all at once just to hedge your bets.

That's a lot to digest but thanks. Yes I'm familiar with bond laddering but that sounds complex. Maybe there are bond funds that mirror that?

 

In any case I am more interested in ETFs for stocks more than any flavor of bonds as I still plan to be heavily in stocks.

 

Sent from my Lenovo A7020a48 using Thailand Forum - Thaivisa mobile app

 

 

 

[Thailand J]

7 hours ago, Jingthing said:

I am more interested in ETFs for stocks more than any flavor of bonds as I still plan to be heavily in stocks.

Whatever mutual fund do you own now probably there is a similarly invested EFT in the same fund company or at the competitor.

 

For example Vanguard VFINX is a mutual fund invests in S&P 500, VOO is an ETF with similar portfolio. Schwab also has S&P 500 ETF.

 

 

 

[Jingthing]

Whatever mutual fund do you own now probably there is a similarly invested EFT in the same fund company or at the competitor.
 
For example Vanguard VFINX is a mutual fund invests in S&P 500, VOO is an ETF with similar portfolio. Schwab also has S&P 500 ETF.
 
 
 

Good point but my investments are super diverse. Not any total indexes at the moment but I used to have a lot of that. I'm not necessarily looking to mirror what I've been doing either. Whether I had the very best positions in the past isn't my issue. Of course I didn't but in recent years markets it was hard to lose. Looking for a reboot and yes using ETFs.

Sent from my Lenovo A7020a48 using Thailand Forum - Thaivisa mobile app

[Jingthing]

OK, I'll try again.

I'm sure many of you own ETFs.

How and why did you pick the specific ETFs?

 

[Thailand J]

I'll try again too ?. I was saying if you are comfortable with your mutual funds , you would be as comfortable with like-kind ETF's.
 

First I can tell you, you have to be nuts to buy any bond ETF's now, in an interest rising environment. Simple: today's contract is worth less then tomorrow's contract. In 2009 the fed lowered the interest rate to help the recovery from the financial crisis. In 2012 I sold all my interest sensitive investments, I feared the interest rate was going to rise. I am looking at my 2012 Form 8949 what I've sold: VWEAX Bond fund, Annaly NLY, Armour ANH, Chimera CIM, Invesco INV, Two Harbor, Solar SLRC, TICC, all my REITs. If you still have REIT today it may be too late to get out. REIT stock prices are much lower today from 2012.

 

 

Basically there are 3 types of stocks ETF's

1. US Stocks ETF's:  large cap, mid cap and small cap.

2. US sector stocks ETF's.  Information tech, Healthcare etc.

3. International stock ETF's.

 

I picked US large cap ETF's such as VTI, VOO and VYM. But that was 2012, when DJIA was 12500 . P/E ratio was 15...and all the economic indicators were showing those were good bets.

 

Today with DJIA at 25000, P/E at 23, I am not selling. My money in stocks has doubled and I can cushion a big market downturn...and I am only 57...but if I want to put new money into stocks, i would not know which ETF to goto.

You should decide for yourself what kinda investment you are comfortable with...and how big of a portion of your retirement asset goes into stocks.

 

Here is a full list of vanguard mutual funds and ETF's: https://investor.vanguard.com/mutual-funds/list#/etf/asset-class/month-end-returns

 

 

 

Edited August 2, 2018 by Thailand J

[Jingthing]

Thanks, TJ. That's the kind of meat I'd like to start to chew on. Personally I'm older and still 100 percent in stocks. I know that's theoretically crazy but that has worked for me until now, even though that huge crash years ago was not fun. 

[DrDave]

19 hours ago, Jingthing said:

OK, I'll try again.

I'm sure many of you own ETFs.

How and why did you pick the specific ETFs?

 

For my IRA, I looked for a high yield ETF that had a historically (somewhat) stable price. This was JGH.

For cash accounts - I looked for tax-free ETFs, again with a relatively stable share price. I ended up selecting NEA as a good tax-free earner.  Both are Nuveen funds - a subsidiary of TIAA/CREF.

 

A couple of things to consider: some ETFs are closed-end, meaning they have an end date just like bonds. Also, if you're interested in bond ladders, if you don't feel comfortable doing this yourself your broker can build one for you. One of my brokers (Fidelity maybe?) has an online tool that helps you model a ladder, then purchase if desired.

 

I don't have all my eggs in one basket, keeping a good balance between cash, stocks and ETFs.

Edited August 2, 2018 by DrDave
typos

[kingstonkid]

OP

 

Easy rule of play is this.

 

All mutual fund managers attempt to match the stock exchange.  TSE in Canda SET in Thailand and the DJA in the US.

 

My suggestion as a beginner is that you play in that etf or stocks.

 

They are a mix of the top stocks in the country only.  They are watched carefully and if they start to fail they are replaced.  Also if you go into one of these stocks you also get dividends each time one of the companies pays out.

 

The cost is only the initial handling fee and usually a charge when you cash them out.  

 

Believe me they do grow and are the most stable investment you can make in the market if you have no knowledge.  Play with that watch it.

[1FinickyOne]

best advice is to diversify... bond funds can go down along with the stock market... Gecko offered some good advice - decide for yourself what you want your risk profile to be [scale of 1-10] and invest accordingly... 

[skatewash]

I do nearly all of my investing with Vanguard because it's really hard to beat their incredibly low investment costs (e.g., expense ratio on VTI - Vanguard Total Stock Market Index Fund is 0.04%).  As someone has already pointed out above, most particular fund choices offer both a mutual fund and an ETF version.  The salient differences between the two for me are that sometimes the ETF will have a lower management fee and sometimes the ETF will have a lower minimum investment requirement.  Other than those two differences I find them to be nearly identical in terms of return.  I primarily own passively managed index funds in either mutual fund or ETF form.  I follow a simple buy and hold strategy basically supporting my lifestyle on 4% annual withdrawals from my nest egg which is almost entirely in index stock funds.

You asked for advice and the best investing advice I have ever come across is the Jim L Collins "Stock Series":  http://jlcollinsnh.com/stock-series/  The three biggest takeaways from the series for me are these: 1) investing doesn't need to be complicated, sometimes simple is best -- you can achieve a lot by simply owning 2-3 funds; 2) human nature often leads people to do exactly the wrong thing at exactly the wrong time; and 3) always be aware of how the people giving you investing advice stand to benefit from that advice.  I think reading the free series can be an enjoyable experience.

Edited August 2, 2018 by skatewash

[Suradit69]

If you're getting out of mutual funds and into ETFs, you may want to stay in cash for awhile until the dust settles on the 2018 elections and after Chairman Xi outmaneuvers Chairman Donald.

 

Vanguard has some ETFs that are similar to their mutual funds. They actually own the shares of the companies in whatever index they're attempting to match and most have decent daily trading volume so they should not run into liquidity problems. Some ETFs attempt to mimic an index synthetically by using derivatives rather than owning shares of the companies included in the target index.

You might also want to look into CEFs (Closed End Funds). Many sell at a discount to their NAV (Net Asset Value) and pay decent distributions. Companies like Eaton Vance, BlackRock, Blackstone, PIMCO, etc have CEFs ... but you do need to do some "due diligence" to understand them before jumping in.

 

Douglas Albo on Seeking Alpha is a good source of information on CEFs, but you need to read through a number of his articles to get a feel for the subject.

https://seekingalpha.com/author/douglas-albo/articles#regular_articles

 

 

 

 

 

 

 

 

Edited August 2, 2018 by Suradit69

[IAMHERE]

etfchannel.com   is a decent place to start.  Be careful of bonds in a rising interest rate environment.

 

I find some interesting articles on  seekingalpha.com also.

Edited August 3, 2018 by IAMHERE
add last sentence.

[Jingthing]

OK. I an


Sent from my Lenovo A7020a48 using Thailand Forum - Thaivisa mobile app

[Jingthing]

Accident post above.
It seems that ETFs are open ended and not ever closed ended while mutual funds and bonds funds can be either. Correct?

Sent from my Lenovo A7020a48 using Thailand Forum - Thaivisa mobile app

[Maradona 10]

You're investing money for a terrorist group?

[kingstonkid]

Jingthing  easy way to put it is this

 

an ETF is the same as a mutual fund.it is a group of stocks. THE DIFFERENCE is that an ETF is not a managed portfolio and does not have the mutual fund charges. You as a private person can call a stockbroker and buy shares in an ETF.  While with a mutual fund you by a fund that you have no control over and pay a lot of money no matter how it does.

 

An example is this.

 

When a company pays it's shareholders if you have a mutual fund you get nothing.  if you have an ETF you will gain that money.  

 

With an ETF you can put in any amount you want and buy when you want.

 

My personal example is that when all hell was breaking loose in Thailand the stock market took a huge dive.  I bought like crazy.  When the market came back I made a lot of money.  Also every month I received money from the companies in dividend payouts.

 

If you are3 in Thailand I would suggest talking to someone at Maybank or other stock market firms. NOT FUND ADVISORS OR BANKS  they only want to put you in funds that they make money from and do not always have your best interest at heart.

 

When the market crashed and people lost millions the investment firms still made millions from the fees that they charge to "manage" your money.

 

 

 

[Shouldhaveknownbetter]

If you are going to invest in ETFs and not comfortable with sector bets look at SPY, DIA, QQQ.  They are the most liquid and the easiest to hedge.

As far as bonds I agree with previous posts steering you away from bond etfs.  You may want to study up on preferred shares which are basically IOUs.

[kingstonkid]

2 minutes ago, Shouldhaveknownbetter said:

If you are going to invest in ETFs and not comfortable with sector bets look at SPY, DIA, QQQ.  They are the most liquid and the easiest to hedge.

As far as bonds I agree with previous posts steering you away from bond etfs.  You may want to study up on preferred shares which are basically IOUs.

 

THAI VERSION IS THE SET.  The stocks have different numbers all the numbers do is tell you how many companies are in that portfolio. SET 30 30 companies SET 90 top 90 companies in di9fferen t areas of commerce.

[Shouldhaveknownbetter]

Just now, kingstonkid said:

 

THAI VERSION IS THE SET.  The stocks have different numbers all the numbers do is tell you how many companies are in that portfolio. SET 30 30 companies SET 90 top 90 companies in di9fferen t areas of commerce.

I did not understand that the question was about the Thai stock market. I was thinking New York.

[Jingthing]

It is definitely not about the Thai stock market.

Sent from my Lenovo A7020a48 using Thailand Forum - Thaivisa mobile app

[Shouldhaveknownbetter]

Jingthing I am investing in the Thai Set and NYSE.  But right now I feel that 50 percent cash is prudent for me.  Sure the market can go up but at this elevation anything can happen.

[SoloFlyer]

Suggestions for getting started on ETF investing in Thailand for a beginner? Thai and International ETFs.

[5633572526]

The best advice I can give you is put your money in a savings account and educate yourself about how the system works before you take on additional risk.

investing in something you don’t understand is the best way to lose your money.

then invest in things you understand, do your research and pay attention to what is going on in the things you are investing in. The vast majority of my income is derived from the stock market but I have studied it for decades and still study it today.

[Jingthing]

The best advice I can give you is put your money in a savings account and educate yourself about how the system works before you take on additional risk.

investing in something you don’t understand is the best way to lose your money.

then invest in things you understand, do your research and pay attention to what is going on in the things you are investing in. The vast majority of my income is derived from the stock market but I have studied it for decades and still study it today.

I've been invested for years in various mutual funds so I'm not exactly a beginner to investing. I am new to ETFs though. So I'll ignore your sincere advice. ETFs aren't exactly commodities trading. As said here you can buy market index ETFs and sector ETFs that are quite similar to mutual funds.

 

Sent from my Lenovo A7020a48 using Thailand Forum - Thaivisa mobile app

 

 

 

[Shouldhaveknownbetter]

Jingthing maybe you should look at Morning star or similar and do some more research on mutual funds.  Because some do way better than an ETF.  I know that a couple I own are like the gift that keeps on giving.  As far as ETFs look at the ones I mentioned before.  Also take a look at the 2x for a gambol. I usually use them for short term hedge,  SDS and TVIX.

[lannarebirth]

In a rising market ETF's seem a brilliant investment due to great market breadth of advances. In a falling market they can be disastarous as they are required not only to buy/mimic the best stocks in an index/sector but also the worst. Bear in mind that 6 stocks have accounted for 100% of S&P 500 gains so far this year. 10 stocks have accounted for 122% of gains this year. Why would you want to own the other 490 stocks in the index under those conditions?

Edited August 5, 2018 by lannarebirth

[Shouldhaveknownbetter]

Just now, SoloFlyer said:

Suggestions for getting started on ETF investing in Thailand for a beginner? Thai and International ETFs.

Go to https://www.set.or.th/set/etfstatistics.do?language=en&country=US

There you can choose which ETF you are interested in.  Gold, Oil, Banking, Thai, International, up to your gut feeling and research.