Using My 800.000 Tb Retirement Deposit To Invest In Thai Dividend Stocks

[TenCent]

Friday I went for a common Matter to my Bank, where I hold my 800.000 Baht for my Retirement Visa

Surprisingly, there was a Promotion Desk from Bualuang Securites and I had a Chat with the Lady

http://www.bualuang.co.th/en/index.php

She told me, I would be able to trade Thai Stocks through this Company

So an Idea came up in my Mind and I would like to discuss this Matter with some fellow Members of TV

As I do not get any Interests on my Deposit, why not buy Thaistocks, who are paying reasonable Dividends

What Stocks you would recommend?

What Timeframe of buy and sell you would recommend?

I am aware, that I will have to sell these Stocks at the Time to reassure the full Amount in cash on my Bankaccount

to renew my Retirement Visa - will be a bit "tricky" ?

A last Question: maybe better to buy Bonds?

Thanks in Advance for considerable Replies

Edited March 6, 2011 by TenCent

[InterestedObserver]

Since the 800,000 baht needs to be on deposit at your Thai bank for 3 months prior to extension of stay renewal, you would only have use of the funds 9 months out of the year.

[TenCent]

Thank your for your Answer

Exactly this is the main Point, why I ask for Advice

Using this Money for 9 Months to invest and get some Return

[flying]

Thank your for your Answer

Exactly this is the main Point, why I ask for Advice

Using this Money for 9 Months to invest and get some Return

Sounds good......as long as you do not 100% need the money after your 9 months are up.

Of course it is nice to have your money working so to speak but......

If you have no way of replacing this IF you not only do not get a return but instead get a big loss will it be problematic for you?

Investing with the *hope* of a return is of course best when your using money not absolutely earmarked for another purpose.

Chok Dee

[jfchandler]

As stated above, if you invest your visa funds in Thai stocks, you face the loss of some portion of your funds if the market, or your stocks, go down... Plus I'd assume the payment of potential buying and selling commissions.

[slapout]

You need the money in the bank as a requirement for retirement visa, at least 3 months prior to extension of visa.

To put a short term time limit on any investment in stocks/bonds (9 months) less the time to invest and cash in your investment and get back into bank account sounds like a disaster looking to happen.

If you feel you have the knowledge to get a better return on the 800,000 baht, why not borrow money against your account (long term) and you will not be so constrained/limited by the time/outside short term factors?

[Robby nz]

As yourself some questions; is this investment or speculation = gambeling?

Do you have back up funds to cover any loss and fees charged?

What is the potential gain, loss for 9 months at a time?

Do you have sufficiant knowledge of markets to do this? Dont look like it when you have to ask on this forum.

Whoes advice will you be taking and can you trust them? After all they will be doing it for a fee or commission and getting paid whether you win or lose.

Once you have answered these and probably more questions you can think of yourself then make your decision.

[Furbie]

OP, using your retirement funds to take a short term gamble on the market is a bad idea. If you are looking for some return on this money, get a bill of exchange. They have various terms and better interest rates than a savings account or a fixed deposit. They do have slightly more risk, but it is not that much.

[roger1999]

Agree with Furbie. To much risk with stocks and too little dividend gain. I suggest not putting the 800,000 to any risk at all.

[TenCent]

OP, using your retirement funds to take a short term gamble on the market is a bad idea. If you are looking for some return on this money, get a bill of exchange. They have various terms and better interest rates than a savings account or a fixed deposit. They do have slightly more risk, but it is not that much.

Thank you very much for your Answer

What is a "Bill of Return" ?

any Links, where I can read about?

[TenCent]

You need the money in the bank as a requirement for retirement visa, at least 3 months prior to extension of visa.

To put a short term time limit on any investment in stocks/bonds (9 months) less the time to invest and cash in your investment and get back into bank account sounds like a disaster looking to happen.

If you feel you have the knowledge to get a better return on the 800,000 baht, why not borrow money against your account (long term) and you will not be so constrained/limited by the time/outside short term factors?

Thanks for your Answer

this sounds interesting to me

how to borrow money against my account?

which bank would you recommend?

I can move this money to any other bank here in thailand.....

[midas]

It is possible to buy long dated Put options on the SET so as long as the OP is covered

during the time he is invested wouldn't his risk exposure be considerably reduced ?

[TenCent]

It is possible to buy long dated Put options on the SET so as long as the OP is covered

during the time he is invested wouldn't his risk exposure be considerably reduced ?

Thank you very much for bringing me to this interesting Strategy

I have lookid up in Wikipedia and found some quite interesting Option Strategies

http://en.wikipedia.org/wiki/Options_strategies

which of them you would prefer?

[midas]

It is possible to buy long dated Put options on the SET so as long as the OP is covered

during the time he is invested wouldn't his risk exposure be considerably reduced ?

Thank you very much for bringing me to this interesting Strategy

I have lookid up in Wikipedia and found some quite interesting Option Strategies

http://en.wikipedia.org/wiki/Options_strategies

which of them you would prefer?

Options strategies can be complex if you have never had previous experience.

But it seems to me you are considering going long in your share investments

so you need you offset the risk with a corresponding put option strategy.

It will cost you ( like paying an insurance premium ) but you stand less chance of losing your 800,000 baht.

Get the guys at Bualuang to help you - they do have some

staff who can assist you.

Edited March 6, 2011 by midas

[swissie]

It's probably not going to work, but I want to ask anyway: Can "real-estate-value" be applied toward the required 800'000 ?

Thanks & cheers.

[CWMcMurray]

I would not recommend buying stocks in your position, since the date required to deposit your funds for your retirement extension would then dictate when you must sell those securities rather than the actual market situation.

I would recommend a 9 month fixed deposit or a 9 month B/E (bill of exchange). You can buy either at any bank.

The only real difference between the two is that a fixed deposit is protected by the Thai government in the case the bank goes under, but a B/E is not.

You can check with all of the local Thai Banks, but when I was comparing rates last month, the best I could find was a 9 month B/E from Kiatnakin Bank offering 3 %.

[SantiSuk]

I would not recommend buying stocks in your position, since the date required to deposit your funds for your retirement extension would then dictate when you must sell those securities rather than the actual market situation.

I would recommend a 9 month fixed deposit or a 9 month B/E (bill of exchange). You can buy either at any bank.

The only real difference between the two is that a fixed deposit is protected by the Thai government in the case the bank goes under, but a B/E is not.

You can check with all of the local Thai Banks, but when I was comparing rates last month, the best I could find was a 9 month B/E from Kiatnakin Bank offering 3 %.

Good advice. Equity markets occasionally drop by 50% (every 20-30 years) and quite regularly by 25% (very 5 to 10 years). Experienced investors know this and either keep the money on investment until the market recovers (it always does, but it might take 5 years plus) or are fleet of foot to get out in the early stages. Unless you have 1.6 million to invest you are facing the prospect of suddenly not having enough money to continue your retirement visa in Thailand. Very bad idea.

[midas]

I would not recommend buying stocks in your position, since the date required to deposit your funds for your retirement extension would then dictate when you must sell those securities rather than the actual market situation.

I would recommend a 9 month fixed deposit or a 9 month B/E (bill of exchange). You can buy either at any bank.

The only real difference between the two is that a fixed deposit is protected by the Thai government in the case the bank goes under, but a B/E is not.

You can check with all of the local Thai Banks, but when I was comparing rates last month, the best I could find was a 9 month B/E from Kiatnakin Bank offering 3 %.

Good advice. Equity markets occasionally drop by 50% (every 20-30 years) and quite regularly by 25% (very 5 to 10 years). Experienced investors know this and either keep the money on investment until the market recovers (it always does, but it might take 5 years plus) or are fleet of foot to get out in the early stages. Unless you have 1.6 million to invest you are facing the prospect of suddenly not having enough money to continue your retirement visa in Thailand. Very bad idea.

But if the market drops by even 25 % to 50% provided the OP has bought something

like long dated " deep in the money " Puts that cover his full equity holdings, they should similarly increase in value

by a corresponding amount and at that point he could simply liquidate everything ?

Edited March 7, 2011 by midas

[Furbie]

I would not recommend buying stocks in your position, since the date required to deposit your funds for your retirement extension would then dictate when you must sell those securities rather than the actual market situation.

I would recommend a 9 month fixed deposit or a 9 month B/E (bill of exchange). You can buy either at any bank.

The only real difference between the two is that a fixed deposit is protected by the Thai government in the case the bank goes under, but a B/E is not.

You can check with all of the local Thai Banks, but when I was comparing rates last month, the best I could find was a 9 month B/E from Kiatnakin Bank offering 3 %.

To add, BAY announced B/Es for as low as 100,000 THB. Previous to this, the minimum investment was closer to 1 million or higher for most institutions.

[SiamRose]

It is possible to buy long dated Put options on the SET so as long as the OP is covered

during the time he is invested wouldn't his risk exposure be considerably reduced ?

It is possible, but I wouldn't advise this type of complex strategy for someone with little investing experience.

Also the cost of the put would offset much of the additional dividend income.

[007]

Thank your for your Answer

Exactly this is the main Point, why I ask for Advice

Using this Money for 9 Months to invest and get some Return

9 months may be enough to become a father/mother, but I personally would be vary to invest the funds I need for my long-term visa into the stock market for such a limited time.

The following might happen: 1) the stock(s) (market) rise(s) by 100% and you double your money; good for you, or 2) The market falls by 50%, meaning that you'll have to find 400,000 baht elsewhere...

Edited March 8, 2011 by 007

[jcon]

Usually I wouldn't say anything as people are free to do what they want with their money, but some of the advice here is potentially disastrous.

Tencent, if you need that 800k and you don't have other monies to invest, then you can do the math on the potential visa situation should you come up short.

Maybe you have other monies to invest and are just looking to make that 800k work for you, but if it's the case that 800k is a lot of money to you and it would be hard to replace/refill, then you should keep it safe.

Midas, your option advice is horrendous. I'm waiting for you to tell the OP to sell some calls to pay for the puts and voila, free money! Not. I really don't know where to start, but ''deep in-the-money puts'' <deleted>. In any case, you make it sound as if the OP is all taken care of as long as he buys some puts against his position. That is misleading at best, and just plain bad advice for the OP at his level of investment knowledge especially if he needs this money for his visa.

There are many possible negative outcomes and I'll give one for Tencent to consider: dividend stocks go down, the broader index against which he bought his puts rises, and meanwhile volatility tanks and time decay takes out the rest of the put value. So in that case, even if he's been paid his dividend (1/2 year's worth, most likely btw) who knows where the stock is when he needs to sell and then he's out money for the puts. A simple example, yes, but things like this need to be considered nonetheless, and amateur advice for an amateur is a quick way to blow out. Yes, I realize that we are not all experts in all things, but I think it's just terrible advice for the OP given his needs/knowledge.

Most importantly, the OP is constrained on time (he needs to have that 800k in his account at a fixed date), CWMcMurray mentioned that, and I think that's been the most valuable advice on this thread so far. Investing is pretty much all about price and time, and when you're constrained on the time portion (like the OP would be in the visa situation), then you're playing with fire i.e. what if he's in a losing position and forced to get out of it because of the time restriction, when in fact that position would have been a huge winner otherwise???

[Time Traveller]

Most equities pay dividends around March to May. If you need the money during this time you won't receive any dividends. One alternative is the listed property funds as the pay dividends quarterly. Actually many have dividends of at least 7 or 8% and the price is less prone to swings as for equities. But they are long term dividend plays so there still is some risk that that price is lower at sale time than when you bought them.

[midas]

Usually I wouldn't say anything as people are free to do what they want with their money, but some of the advice here is potentially disastrous.

Tencent, if you need that 800k and you don't have other monies to invest, then you can do the math on the potential visa situation should you come up short.

Maybe you have other monies to invest and are just looking to make that 800k work for you, but if it's the case that 800k is a lot of money to you and it would be hard to replace/refill, then you should keep it safe.

Midas, your option advice is horrendous. I'm waiting for you to tell the OP to sell some calls to pay for the puts and voila, free money! Not.

Before you get your knickers in a twist jcon I never gave the OP advice to do this, I advised him to explore the possibilities with Bualuang Securities – there is big a difference in those two scenarios.

And I don’t even know if the Immigration department would even go along with this anyway because right now

as far as I understand they require the 800,000 baht to sit in a bank account which in most cases earns virtually no interest - end of story. The only reason I thought it may be worth the OP looking into this is because Bangkok Bank own a percentage of Bualuang Securities and it is possible Immigration would allow some latitude - but then they may just say no way !

I really don't know where to start, but ''deep in-the-money puts'' <deleted>.

In any case, you make it sound as if the OP is all taken care of as long as he buys some puts against his position. That is misleading at best, and just plain bad advice for the OP at his level of investment knowledge especially if he needs this money for his visa.

Jcon where in my posts did I suggest the OP invest in stocks that don’t match up to the puts which are based on the broader index? I merely suggested he talk to Bualuang to see if there is a strategy available to earn at least something on the 800,000 as opposed to nothing by matching an investment in the index with deep in the money Put options also based on the index that will hold their value more than out of the money Puts.

There are many possible negative outcomes and I'll give one for Tencent to consider: dividend stocks go down, the broader index against which he bought his puts rises, and meanwhile volatility tanks and time decay takes out the rest of the put value. So in that case, even if he's been paid his dividend (1/2 year's worth, most likely btw) who knows where the stock is when he needs to sell and then he's out money for the puts. A simple example, yes, but things like this need to be considered nonetheless, and amateur advice for an amateur is a quick way to blow out. Yes, I realize that we are not all experts in all things, but I think it's just terrible advice for the OP given his needs/knowledge.

Most importantly, the OP is constrained on time (he needs to have that 800k in his account at a fixed date), CWMcMurray mentioned that, and I think that's been the most valuable advice on this thread so far. Investing is pretty much all about price and time, and when you're constrained on the time portion (like the OP would be in the visa situation), then you're playing with fire i.e. what if he's in a losing position and forced to get out of it because of the time restriction, when in fact that position would have been a huge winner otherwise???

[12DrinkMore]

It's probably not going to work, but I want to ask anyway: Can "real-estate-value" be applied toward the required 800'000 ?

No.

[jfchandler]

Ditto on the NO to using real estate value for the value of your retirement deposit...

On the broader subject, there has seemed to be some variation from Immigration office to office about what kinds of accounts they like and don't like...

Clearly, a regular passbook savings account in any Thai bank is fine. It seems that fixed deposit accounts likewise are fine, at least most of the time, though there have been reports of those rarely being a problem.

You don't want to change anything about your deposit account, or move the funds from one account to another account, during the 3 month holding period. Another TV member tried that on the advice of their banker, and Immigration turned him down.

I can't remember ever hearing of anyone using any kind of securities account to satisfy the Immigration requirement, so I'd be doubtful about that. When the regulation says funds "in a bank in Thailand," I believe they do mean "bank."

[AlexLah]

Buy Gold and Silver.

[12DrinkMore]

Buy Gold and Silver.

I don't think that immigration will approve that for purposes of a retirement visa, even if the advice is possibly good as an long term investment, and would certainly go a long way to appeasing the demands of a Thai GF.....

[cheeryble]

There are many possible negative outcomes and I'll give one for Tencent to consider: dividend stocks go down, the broader index against which he bought his puts rises,

A very low probability event indeed if he chooses the bluer end of the div stock universe?

Maybe he could take that risk? Having said that.....

Tencent

You should always be wary of buying into a market that's had a prolific rise.

As prices double, dividends halve, which is somewhat what has happened.

So the dividends are not so marvellous any more plotted against the potential risk.We all know the inevitable event which will make the Thai markets puke overnight.

So the question is.....are you feeling lucky?

Cheeryble

[AlexLah]

Buy Gold and Silver.

I don't think that immigration will approve that for purposes of a retirement visa, even if the advice is possibly good as an long term investment, and would certainly go a long way to appeasing the demands of a Thai GF.....

It's not about immigration, you have a pile of money and you invest it for nine months in buying some Gold.

After that, you sell and transfer back your profits into the account.

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