Stock market advice for a beginning Thai lady

[rumak]

3 hours ago, AlfHuy said:

LGEN

RDSB (even having lowered their divi pay-out 2020, I bought in again and let them do their job).

And a few more in my portfolio.

 

thai stocks ????   

[MarleyMarl]

I would recommend her to research mutual funds that are managed by reputable professionals, like mutual funds managed by Banks. A fund I am in is with Krungsri, a dividend fund KFSDIV.

https://www.krungsriasset.com/EN/FundDetail.aspx?fund=KFSDIV
https://www.krungsriasset.com/TH/FundDetail.aspx?fund=KFSDIV

 

This fund holds a handful of dividend paying stocks, I feel better about having some Thai savings in here than just keeping money in non-interest paying bank account. I added a bit more to it during the crash to help lower my overall price per unit, I am probably about break even with the dividends at the moment.

 

If you look at the chart for this fund, it's still down quite a bit compared to the previous few years, so I think there is opportunity for some growth as the country starts opening up the fund will also go up. Still nothing is without risk.

 

As others have recommended, she shouldn't be trying to learn to trade, rather than learn to invest in quality companies that will be good long term holds.

[Surelynot]

Haven't read the thread....but

 

Eggs in many baskets

Don't day trade

Don't buy individual stocks

Buy into big funds and forget about them for 20 years at least.

[AlfHuy]

20 hours ago, rumak said:

 

thai stocks ????   

No

I don't know anything about Thai stocks and am not interested either.

My money is and stays invested abroad and generates income for me.

[Jeffr2]

19 hours ago, MarleyMarl said:

I would recommend her to research mutual funds that are managed by reputable professionals, like mutual funds managed by Banks. A fund I am in is with Krungsri, a dividend fund KFSDIV.

https://www.krungsriasset.com/EN/FundDetail.aspx?fund=KFSDIV
https://www.krungsriasset.com/TH/FundDetail.aspx?fund=KFSDIV

 

This fund holds a handful of dividend paying stocks, I feel better about having some Thai savings in here than just keeping money in non-interest paying bank account. I added a bit more to it during the crash to help lower my overall price per unit, I am probably about break even with the dividends at the moment.

 

If you look at the chart for this fund, it's still down quite a bit compared to the previous few years, so I think there is opportunity for some growth as the country starts opening up the fund will also go up. Still nothing is without risk.

 

As others have recommended, she shouldn't be trying to learn to trade, rather than learn to invest in quality companies that will be good long term holds.

Very interesting...do you have to pay taxes on the gains/dividends?

[patman30]

how has her DEMO account performed ?

nearly all platforms have demo accounts these days,
as someone else suggested, paper first (same as demo)

sounds like she is looking to trade more than invest
you do not need charts to invest
you need to understand the buisness you are investing in.
Charts/TA is for day traders which is a lot riskier,
avoid using leverage as that brings more risk and is more from trading

For a 10 year plus investment
look into TAAL
(not financial advice)

Edited March 23, 2021 by patman30

[Surelynot]

17 minutes ago, Jeffr2 said:

Very interesting...do you have to pay taxes on the gains/dividends?

If she is concerned about paying tax on gains/dividends she can follow my methods of trading.......fat chance of having to pay any tax.

[Jeffr2]

4 minutes ago, Surelynot said:

If she is concerned about paying tax on gains/dividends she can follow my methods of trading.......fat chance of having to pay any tax.

LOL.  Understood.  I was wondering if they took it out automatically or not.  I've not done any trading here in Thailand.  But as you say, might be a very good time to do so!

 

 

[patman30]

3 minutes ago, Surelynot said:

If she is concerned about paying tax on gains/dividends she can follow my methods of trading.......fat chance of having to pay any tax.

most countries class profits from day trading as income and is subject to income tax
(day trading is usually considered for investments held for less than 1 year)
investments held over 1 year are usually subject to pay capital gains

[Surelynot]

1 minute ago, patman30 said:

most countries class profits from day trading as income and is subject to income tax
(day trading is usually considered for investments held for less than 1 year)
investments held over 1 year are usually subject to pay capital gains

Still looking forward to the day I make enough to pay tax......

[patman30]

1 minute ago, Surelynot said:

Still looking forward to the day I make enough to pay tax......

of course, you dont have to take profits, converting to fiat is where you get Bit,
but FYI, some countries do also see any trade as a taxable event,
luckily right now trading platforms have progressed quicker than regulations to enforce such regs
also lucky being here as an expat with tax treaty, it is unlikely you would be looked at for tax here,
depending where you are from, you could also be exempt from income tax as out of the country etc.

For a Thai, any profits paid into their bank account can be subject to income tax.

It is always better to make less fiat, while increasing the value of your portfolio.

[rimmae2]

20 hours ago, MarleyMarl said:

As others have recommended, she shouldn't be trying to learn to trade, rather than learn to invest in quality companies that will be good long term holds.

Particularly in Thailand I would also recommend following this approach for the majority of investment, as I have been doing for several years. There are many good/very good Thai companies and many have significant exposure internationally.

 

For a novice reading the recommendations of a broker will be useful, but that does not mean that they should be followed for obvious reasons. For example Maybank gives a share recommendation once a week - I closely read these and sometimes follow them so far almost always with success (at least for now).

 

Thaicapitalist.com provides a reasonable amount of information but a novice would probably find it difficult to understand at least initially.

 

Despite the increase in the SET from the low point last year I still think that there is a lot of upside in the share price for good companies. 

 

   

[Thomas J]

On 3/21/2021 at 12:38 PM, Oxx said:

This is a lie perpetuated by Vanguard.  A lie perpetuated by misleading comparisons (e.g. comparing an index fund against the average of actively managed funds in a sector when

Show me where it is a lie?  Yes in any one year actively managed funds can beat the index.  However over long spans of time, it is difficult to beat the index because of the cost of managing the fund. 

Here are the average cost for actively managed funds no load.  So with a large cap fund it is .865 meaning over 10 years it is 8.65% over 20 years 17.3% and over 30 years 25.95% That would be compared to 4/10%, 8/10% and 12/10% over the same periods.  So over 30 years the fund would have to perform in excess of 25% better than the S&P just to earn its fee.  Not an easy task.  And remember that is "the average fund" and most funds don't beat the index. 

 

[Oxx]

1 hour ago, Thomas J said:

Show me where it is a lie?

 

You are repeating the lie.

 

I wrote "A lie perpetuated by misleading comparisons (e.g. comparing an index fund against the average of actively managed funds in a sector"

 

You wrote "Here are the average cost for actively managed funds"

 

The best fund managers will outperform significantly over the mid- to long-term.

 

To be honest, it's not rocket science.  If you track an index you get the bad with the good.  A decent fund manager will screen out the bad and give you superior performance.

 

 

 

[Thomas J]

1 hour ago, Oxx said:

You wrote "Here are the average cost for actively managed funds"

 

The best fund managers will outperform significantly over the mid- to long-term.

 

Yes but you misinterpreted the meaning of that.  That is the 'AVERAGE COST for all actively managed Equity Funds as contrasted to Index funds which is termed  "passive" investing.  It showed that 89% of actively managed stock funds failed to beat their respective index over a 20 year period.  Again, can a fund beat the index over 1 year of course, over 5 years less likely, over 40 years extremely difficult.  The index does capture both the winners and losers.  The actively managed fund must pick a greater number of winners.  That number has to be large enough to offset the fees they are charging.  at 1% per year which each year is cumulative.  That fund needs to beat the index by only 1% to offset its fee.  Over 40 years it needs to beat the index by 40% to just break even. 

Now with only 11% of the funds actually doing it the vast majority of investors receive returns substantially less than the index.  The other phenomena that happens is when a fund shows repeatedly great performance it receives substantial inflows of new cash.  That manager then is hard pressed to find enough "new" great stocks to purchase and you tend to get "style drift" as the manager is forced to go beyond their original investing discipline to put the money to work. 

The biggest detriment to index funds as I see it is that the S&P 500 is market cap weighted.  That means that the the index is really not as diversified as its name might suggest.  The larger the company's market cap becomes the greater percentage it becomes as part of the S&P 500 it becomes.  

One way or another, as stated, I worked for one of the largest commercial banks handling major retirement plans for companies including Ford, Coke, American Airlines etc.  Our studies show it is extremely difficult over time to earn the investment management charge differential between index funds and their respective benchmarks.  

 

 Apple, Microsoft, Alphabet, Amazon and Facebook — now account for 17.5% of the S&P 500.

I guess you must have some data that Forbes does not.  
https://www.forbes.com/sites/johnjennings/2020/09/23/beating-the-market-is-simple-but-not-easy/?sh=5c1c6a157b6a

[Oxx]

4 hours ago, Thomas J said:

It showed that 89% of actively managed stock funds failed to beat their respective index over a 20 year period.

 

Doesn't it occur to you that this is meaningless? Fund managers change.  Few are still in place after 20 years.  They get old, they get wealthy, they retire.

 

Look for fund managers who have a track record of outperformance and stick with them - at least until they stop outperforming.  You'll end up a lot richer than if you stick with the mediocre performance of index trackers.

[Thomas J]

12 hours ago, Oxx said:

Doesn't it occur to you that this is meaningless? Fund managers change.  Few are still in place after 20 years.  They get old, they get wealthy, they retire.

 

Look for fund managers who have a track record of outperformance and stick with them - at least until they stop outperforming.  You'll end up a lot richer than if you stick with the mediocre performance of index trackers.

Yes they do.  That is the point.  The index is always the index while the fund changes characteristics and fund managers.  

Stick with the "better" fund manager until they stop outperforming.  If I could 'time" that I would only pick individual stocks that only go up or alternatively only own stocks until they go up.  Picking a fund manager that has consistently beat the index is looking backwards in history and making the assumption that the manager going forward will continue to beat it.   That is like buying GE in 2009 because its performance caused it to grow to the worlds largest company and then assume that it would continue to grow for the next decade. 

The point still is only 11% of stock market funds net of fees beat the index.  

Edited March 24, 2021 by Thomas J

[Oxx]

1 hour ago, Thomas J said:

Yes they do.  That is the point.  The index is always the index while the fund changes characteristics and fund managers.  

Stick with the "better" fund manager until they stop outperforming.  If I could 'time" that I would only pick individual stocks that only go up or alternatively only own stocks until they go up.  Picking a fund manager that has consistently beat the index is looking backwards in history and making the assumption that the manager going forward will continue to beat it.   That is like buying GE in 2009 because its performance caused it to grow to the worlds largest company and then assume that it would continue to grow for the next decade. 

The point still is only 11% of stock market funds net of fees beat the index.  

 

You carry on believing that.  And I'll carry on investing with fund managers who have a proven track record of consistently beating the index, year after year after year.

[Thomas J]

3 minutes ago, Oxx said:

You carry on believing that.  And I'll carry on investing with fund managers who have a proven track record of consistently beating the index, year after year after year.

Two things.  First show me " which managers consistently beat the index.  Second, I did not say it was impossible.  I said it is difficult with only 11% being able to do so.  Also the term "beat" is abstract.  Beat by 1% beat by 10%.  Did the investor have a lower or higher volatility during those years.  In other words to achieve those superior returns did the investor increasingly have a greater volatility.  Don't know but again, the stats show only 11% of fund managers can do it.  So that on its face shows it is not impossible but it is difficult.  I would suggest that picking the manager that will beat the market going forward is not that easy and if it was, 89% of the money invested in funds that don't beat the market would not happen. 

[Oxx]

1 hour ago, Thomas J said:

First show me " which managers consistently beat the index.

 

Just looking at funds I've held for over 10 years (so there can be no accusation of post hoc selection), and using the Morningstar-assigned benchmark (again, so I can't be biased), I've listed the 10 year annualised performance of both fund and index.  Where the index is not in Sterling it's been converted to GBP by Morningstar:

 

- Lindsell Train Global Equity Fund B GBP Inc 16.3%; MSCI ACWI Growth NR USD 14.0%.

- Monks Investment Trust 15.8%; FTSE World TR GBP, 11.9%.

- Schroder Oriental Income Fund Limited 11.1%; MSCI AC Asia Pacific Ex Japan GR USD 8.9%.

- European Opportunities Trust 10.5%; MSCI Euro GR EUR 7.3%.

- Finsbury Growth & Income Ord 13.0%; FTSE All Share TR GBP 6.1%.

- Henderson EuroTrust Ord 12.2%; FTSE World Europe Ex UK TR GBP 8.2%.

- JPMorgan Emerging Markets Ord 10.3%; MSCI EM NR GBP 5.9%

- JPMorgan European Smaller Comp Ord 12.1%; MSCI Europe Small Cap GR USD 11.1%.

- Pacific Assets Ord 11.9%; MSCI AC Asia Pacific Ex Japan GR USD 8.9%.

 

So, across Europe, The UK, Emerging Markets and Asia Pacific funds are consistently beating the market by a few percentage points a year.

 

And turning to America, I hold Dodge & Cox Worldwide US Stock GBP Inc - but haven't held it for 10 years yet.  Over 10 years it's returned 14.5%; the benchmark (Russell 1000 Value TR USD) has returned 13.0%.  So, even in the toughest of markets active management can beat passive consistently over long periods.

 

(The one fund I've held for over 10 years that hasn't beaten the benchmark is Independent Ord.  It's returned 11.6% versus the benchmark's 11.9%.  However, the problem's with Morningstar applying an inappropriate benchmark (FTSE World TR GBP).  The fund is in the AIC IT UK All Companies sector.)

 

All data from Morningstar UK.
 

 

[GarryP]

24 minutes ago, Oxx said:

 

Just looking at funds I've held for over 10 years (so there can be no accusation of post hoc selection), and using the Morningstar-assigned benchmark (again, so I can't be biased), I've listed the 10 year annualised performance of both fund and index.  Where the index is not in Sterling it's been converted to GBP by Morningstar:

 

- Lindsell Train Global Equity Fund B GBP Inc 16.3%; MSCI ACWI Growth NR USD 14.0%.

- Monks Investment Trust 15.8%; FTSE World TR GBP, 11.9%.

- Schroder Oriental Income Fund Limited 11.1%; MSCI AC Asia Pacific Ex Japan GR USD 8.9%.

- European Opportunities Trust 10.5%; MSCI Euro GR EUR 7.3%.

- Finsbury Growth & Income Ord 13.0%; FTSE All Share TR GBP 6.1%.

- Henderson EuroTrust Ord 12.2%; FTSE World Europe Ex UK TR GBP 8.2%.

- JPMorgan Emerging Markets Ord 10.3%; MSCI EM NR GBP 5.9%

- JPMorgan European Smaller Comp Ord 12.1%; MSCI Europe Small Cap GR USD 11.1%.

- Pacific Assets Ord 11.9%; MSCI AC Asia Pacific Ex Japan GR USD 8.9%.

 

So, across Europe, The UK, Emerging Markets and Asia Pacific funds are consistently beating the market by a few percentage points a year.

 

And turning to America, I hold Dodge & Cox Worldwide US Stock GBP Inc - but haven't held it for 10 years yet.  Over 10 years it's returned 14.5%; the benchmark (Russell 1000 Value TR USD) has returned 13.0%.  So, even in the toughest of markets active management can beat passive consistently over long periods.

 

(The one fund I've held for over 10 years that hasn't beaten the benchmark is Independent Ord.  It's returned 11.6% versus the benchmark's 11.9%.  However, the problem's with Morningstar applying an inappropriate benchmark (FTSE World TR GBP).  The fund is in the AIC IT UK All Companies sector.)

 

All data from Morningstar UK.
 

 

Damn, I wish I could get those annualised figures. 

[Surelynot]

3 minutes ago, GarryP said:

Lindsell Train Global Equity Fund

What has happened to that recently?.......Used to be a star performer............not happy.

[Surelynot]

29 minutes ago, Oxx said:

JPMorgan Emerging Markets

That seems to be dragging its heels of late.

[Thomas J]

35 minutes ago, Oxx said:

Just looking at funds I've held for over 10 years (so there can be no accusation of post hoc selection),

Thank you.  I will look at those.  Now one further question.  Are those returns "net of fees"  They should be since fees are taken at the fund level but I am uncertain if they report gross returns or net of fees.  As previously mentioned the biggest impediment to beating any index is that index fund investing is so cheap and if a fund charges 1% a year for management over 30 years it has to outperform by 30% just to break even.  That is a mighty hill to climb.  

[Oxx]

15 minutes ago, Thomas J said:

Now one further question.  Are those returns "net of fees"

Yes they are.

 

16 minutes ago, Thomas J said:

if a fund charges 1% a year for management over 30 years it has to outperform by 30% just to break even

But if you look at it the other way around, it only has to outperform by 1% each year to beat the index.  Those funds are outperforming by a bit more than that, even after fees.

Fund charges have come down a lot in recent years.  With the funds I listed, some are charging around 0.5%.

[Oxx]

28 minutes ago, Surelynot said:

What has happened to that recently?.......Used to be a star performer............not happy.

 

27 minutes ago, Surelynot said:

That seems to be dragging its heels of late.

 

If you take a short term view you're a fool.  The same fund manager is applying his same expertise, and the same reasons to buy into the fund as at first remain.

 

Best to evaluate a fund over the full economic cycle (roughly 10 years) to know whether the fund manager can do a good job across economic conditions.

[Surelynot]

Just now, Oxx said:

f you take a short term view you're a fool. 

You got me in one.

[Thomas J]

4 minutes ago, Oxx said:

Fund charges have come down a lot in recent years.  With the funds I listed, some are charging around 0.5%.

I will look into that.  Thank You.  I have been out of Merrill Lynch for some years now and I invest in some index funds however I purchase mostly individual securities  The dividend aristocrat stocks since I am income oriented.  So I have not looked at expense ratios recently.  When I was in the business the typical equity fund had expense ratios closer to 1.5%  When I first started in the business not only did they have those expense ratio but the A, B, C shares had front, ongoing, or back end loads. 

If you have selected funds that have outperformed the indexes by a significant amount more than their benchmark, I commend you.  You are in that 11% who managed to do it.   Given that you are familiar with Morningstar and screening again, you are obviously a lot more knowledgeable than the typical investor.   I use to hold employee meetings for companies and their retirement plans.  The typical person you had to explain the difference between an equity vs a bond fund. 

If you recall the OP was about a recommendation for a Thai Lady.  Truly for the novice investor, an index fund is a good, safe way for someone with no knowledge of the markets to get a decent return.  Certainly investing in Thai stocks is something I can't envision anyone having the expertise or confidence in the honesty of the markets to do.