Your Investment Goals

[Johnnie99]

Best advice: wave byebye to your money!

[Hedghog]

Buy lottery tickets.

Thai lottery tickets.

Buy,buy,buy.

Bye bye, blackbird,bye bye.

[lowbo]

... one word... Don't!

[bocceball1]

Investment advice from TVF Guru's

"Wave bye bye"

"Buy Lottery Tickets"

"Don't"

WOW...I guess I underestimated the intellectual level of some members of this forum. and to those members I quote:

"An investment in knowledge pays the best interest." - Benjamin Franklin

[ericjt]

Expatj.....sound advice...

But..."200-400k$ into annuities will give @1-2,200 $ per month, guaranteed till you die and this can be part of a good solid income foundation for any retirement."

What if the company that sold you the annuities with a guaranteed income goes bankrupt????

Seems like a good idea, but 10 years from now, if inflation is running at around 10%/year (which it is), the buying power of that annuity will be only $100-$220/month at today's prices. And you might be locked in and unable to move or reinvest the money into something more productive.

In a non-inflationary environment, I think annuities would be the way to go, hands down.

But with inflation? Even if the annuity company survives, how much will your income be worth in 20 or 30 years?

I don't think annuities are the way to go unless they are indexed to protect you from inflation at the real inflation rate.

Edited October 14, 2013 by ericjt

[bocceball1]

ericjt....I agree...

Interest rates are low right now.....but the value of bonds, annuities. dividend stocks etc. react inversely to rising interest rates! Not sure you were around in the early 80's but interest rates then went double digit .......any fixed income vehicles then were cheap!

Since I don't believe interest rates are going to stay at close to zero forever I'm avoiding fixed income vehicles for now.

[Cheapcharly]

Keep in mind your life expectation will be 20years more thanks to 3d printer.

Soon they will be able to print a heart, then a brain and transfer all datas from you to the new brain.

Look what happened to Robocop! He just did a movie again!

Edited October 14, 2013 by Cheapcharly

[deepcell]

I really encourage you to share your investment in many different options, it can be:

• Find the land and build rooms for rent around some (factory, hospital, gov build, etc) area, since there are so many workers that need a rent around their jobs.
• buy a house for rent purposes.
• buy a piece of land (perhaps something around 10 rais or more ..better) and plant rubber tree or eucaliptus or pinus or any kind of tree that grow often in your desired area. (safe: long-term investment)
• buy a 7/11 franchise (sound funny but it is not) and guarantee job for your GF or wife's familly. Ok, you do not like 7/11 it can be another franchise. Also your franchise can be with you rooms investment (see if the area that you make investment have or not 7/11 or any mini mart)
• A restaurant is another good investment, take some time to get ROI back, but still good is most cases. (In Thailand it can be whatever International cuisine or even Thai cuisine)
• car service is another good one! (but machinery is a bit expensive)

If you can not buy a piece of land (Farang are not able to do), let your wife or GF buy it in her name. (but of course if you trust her).

I believe that the best investment is something that you can sure get your money back easily without stressed yourself to much! Do not invest all your money with gov and companies papers, unless you really know what you are doing. If the economic system break apart one day, you surely will break together and all your money is gone. But with a property you are safe, for sure you will have more options. Also think about investment that you will get money back on a weekly or monthly base.

One more advice, do not look up only in the main centers of Thailand, you can also invest money in small towns. A small town that do not yet has a 7/11 will be trend, and for sure you got income there.

Good Luck!

[Naam]

...100k .....blocked funds in an account in your name....in a Top 10-25 World Bank.....

........can reap you at least 5% per week...which you can withdraw weekly....

...worth investigating....I can give you the Compliance Officer's contact details...an American with a 25 year track record....

i might be interested if that "top bank" throws in a few free blowjobs and foot massages per week. please clarify and let me know. in the meantime i will prepare the 100k cheque.

[jbrain]

...100k .....blocked funds in an account in your name....in a Top 10-25 World Bank.....

........can reap you at least 5% per week...which you can withdraw weekly....

...worth investigating....I can give you the Compliance Officer's contact details...an American with a 25 year track record....

i might be interested if that "top bank" throws in a few free blowjobs and foot massages per week. please clarify and let me know. in the meantime i will prepare the 100k cheque.

To be honest, for 5% a week interest, I would hand out a few blow jobs to the banker, no matter how old and ugly he is.

[Dakling]

Best investment advice I can offer is for you to educate yourself on investing, read books peruse internet, take online securities courses, learn about how things like inflation, taxation and fees affect performance.

Next develop a plan for yourself that fits your needs, there is lots of free information on the net to help you. Then do the hardest part, follow your plan.

My person approach with investing may not work for you as we will have different goals, risk tolerance, available cash flow, fixed expenses, life expectancy and familial obligations.

Having said all that there are a few things I do which should work for most folks. One of my main goals is to minimize ongoing fixed expenses. Reducing expenses is more effective than increasing investment income because they are post tax dollars and are generally zero risk (other than buying the house in GF name) and they also have no volatility. Have a budget for your expenses and keep it simple so you will actually follow it. I am not talking about listing every toiletry item and trying to account for it, I am just saying have a budget and try to stick to it. My simple method is to use separate envelopes for bills I expect during the month, a separate envelope for household stuff and food, and I keep my monthly entertainment/discretionary money in my wallet. When wallet is getting low I cut back spending until the end of the month. Simple but effective for me, I find if I am hitting the ATM 2 times a week I lose track of how much I have spent that month.

On the investing side be very aware of risk, cost and return. Lots of folks focus on risk and return without thinking of costs but you need to factor that in. I lump taxes, inflation, transaction fees, management expenses and loads into this category. Depending on your time horizon inflation is going to have a huge impact. An easy way to think about inflation is to subtract between 2-5% of your total return for inflation. I always use high inflation levels for my calculations since I plan to live in Thailand and since it is a developing economy I think there is more inflation risk than in the west. This gives you a feel for how tiny the real return is on interest yielding investments. I am not saying you should avoid them entirely but if you need growth in your portfolio it wont come from interest (generally).

Your time horizon is critical to your portfolio design, the younger you are the more risk you can include as your long term horizon can accept the volatility, as you get closer to your retirement you need to get the volatility down to a level you feel comfortable with. This doesn't mean you should go crazy on the risk side when young or have zero risk when older, it is just a general guide.

Diversification is great just be sure it is real diversification. Investing in 10 different kinds of real estate is not diversification. Personally I don't like real estate unless it is geographically close enough to me that I can keep an eye on things but many people do very well with rental properties. Be careful with real estate though, people will come out with all sorts of great sounding slogans regarding real estate but the truth is that it is just an investment like many others. If someone comes out with things like "buy land they can't make more of it" or "rental properties are risk free because someone else is paying your mortgage", just nod, smile and move the conversation to other things. Over leveraging is a common failing of people who focus on real estate.

The big problem I have with rental properties is you tend to get hit with a perfect storm in a normal recession. First interest rates rise so your mortgage payments go up, next occupancy goes down as people move back in with their folks after they lose their jobs and finally prices crash so you can't sell to get out of the mortgage. Adding a rental property or two to your portfolio is a good idea provided you aren't over leveraged but don't rely on rentals as your sole income especially if they aren't mortgage free.

Personally I don't think of gold as an investment I consider it as a hedge against inflation and currency fluctuation. Carrying some gold in your portfolio isn't a bad thing but personally I would never have more than about 10% of my equity in gold. Don't invest in a mining company in place of gold unless you really know what you are doing. Gold mining is a tricky business and gold mining companies tend to be volatile and have accounting issues that greatly affect their stock price. I used to work for a gold mining company and we used lots of methods to inflate the companies value that I wasn't comfortable with. For example say a mining company has 10 mines with combined reserves of 1 million oz of gold, they can if they choose, close the more expensive mines to operate and reduce the companies cost per oz by up to 50%. Then they can turn around and value remaining reserves based on the reduced operating cost with a huge swing in net reserve value, they get a double whammy on this because it also increases reserves as previously uneconomic ore bodies become reserves at the reduced cost base.

Normally I want to hold about 40% of my portfolio in bonds but these are not normal times currently I am at 10% waiting on interest rates to rise. Bond yields are very low these days and there is an abnormally large downside risk to bonds because of the ridiculously low interest rates. We may never see 16% mortgages again like in the early 80's but we could. If interest rates rise bond values will suffer and eventually interest rates will rise it is just a matter of when. My guess is within a year you will see it happen. The only way it wont is if we hit a new recession within the next year, (possible but unlikely).

Good luck with whatever you do, having a plan is better than no plan. Keep it as simple as you can and NEVER invest in anything you don't understand. Be vary careful when investing in securities, only go with a well known well managed institution and be sure you know all the costs up front. Be very wary of loads (especially back end loads) and always find out the true management costs (MER's and other account/administrative costs). High costs will kill your returns on a small portfolio and will still be a big drag on even the biggest portfolios.

Edited October 15, 2013 by Dakling

[indyuk]

In short do not invest your hard earned cash with any kind of middle man or investment

company. Do not buy equity in the company that you work for.

1. Don't invest in the stock market in Thailand.

2. Do not try and make money through currency swaps.

(because you can't outsmart the big guys)

3) Don't invest in an equity fund run by your bank or insurance company.

4) Don't buy endowment insurance

5) Don't buy Whole Life insurance.

If you are able to save regularly divide your savings across six types of investment.

(This ensures that over a lifetime you will always make money).

a) Types of investment that are safe:-

Government savings plans,

c) Plans the have significant tax breaks that are run by institutions.

d) Government Bonds

e) Strip coupons off utility company bonds.

f) Real Estate, preferably a small block of apartments.

(Rent them out yourself. If the market bubbles get out early).

g) Exclusive Vintage cars

h) Art by a known artist with a certified history.

i) Precious Metals, gemstones or jewelry.

(But only with a Notarized certificate of authenticity)

Make every investment in your own name. Never ever buy anything in partnership with a

third party (Not even your wife or Mum and Dad).

Finally don't forget to save cash in a deposit account.

If you a high earner spread cash Deposit savings across three different Banks.

Edited October 15, 2013 by indyuk

[SanukDii]

Spread your risk around but certainly put some in solid dividend paying stocks that have dividends in excess of the rate of inflation and have more than 2x divi cover - set it on compound and you'll double your money in no time. And stock is very liquid.

No point in money in the bank (well, let's say a years expenses for emergencies) as inflation will give you negative returns on that.

I know a lot of people like to call gold an investment, in my opinion it isn't - it's speculation. Gold doesn't provide income, at least physical gold doesn't, and it can depreciate in value (life being what it is that will no doubt be when you need to sell it.) If you're holding it through a third party there are storage costs too. You'd be better putting your money in BHP or Rio Tinto at least they pay dividends on the metals they mine and sell, and if the price of metals rises so does the stock price and their profits which comes back to you in the dividend.

I guess I am still in the accumilation phase, my strategy may change later on - although apart from annuities I'll probably just start taking the dividends rather than compounding.

Anyway as is by now probably patently obvious I am no expert, it's just my own strategy and it seems to be working so far.

The benefit of gold is that it compensates when markets are crashing- if this happens and all your funds and stocks go down at least you can sell your gold which normally jumps up in those situations. gold mining company stocks don't always reflect gold prices and in fact I believe they performed poorly during the last 24 months when gold prices peaked.

Yes I think that's broadly true, and I do have some metals but a tiny percentage - and the last year hasn't been kind to them. My point about mining companies was that they don't just mine gold, the are involved in all types of commodities Oil, Iron etc; - and I don't hold any. Here's an interesting article on morning star. http://www.morningstar.co.uk/uk/news/112660/sector-in-focus-bhp-biliton-vs-rio-tinto.aspx

I'm a beleiver in holding your nerve when markets go down. Historically they've always recovered and some of my biggest gains have been made from companies that got unfairly hammered in 2008. Vodafone for one, which dropped to 120 something (now over 220 and a nice payout due from verizon) and it never missed a dividend during that time. GSK and others...all of which did make me sweat a lot at the time, but I stuck with them and added to my holdings because they are fundamentally good companies in my opinion.

I started getting involved in stocks just before the 1989 crash. It was an important lesson. 1. That I allowed fear to dictate my decisions which crystalised paper losses. 2. That those same losses would have been erased if I stayed in the market and kept investing.

I'm still earning, so I can afford to let losses sit as long as the dividend is unnafected and I think on a very long timeline.

I think corporate bonds could be good, but the jury might still be out on that. I've got a couple to test the waters....so far so good.

[SanukDii]

h) Art by a known artist with a certified history.

Yes, I've done ok with that over the last 3 years. Middle carreer artists with a good track record with valuations done by multiple reputable valuation houses and previous auction prices you can verify. Like stocks you need to think on a 3-5 year + timeframe. DYOR though because the art market is full of frauds and fakes.

[brain1]

I read the opening blog as ‘Investing in Thailand’ yet there are some here suggesting all sorts of what I would term ‘Farmed Investment Products’ i.e. investments run by supposedly experts in the field of fund management (and not here in Thailand). These same so called Fund Managers are paid directly from monies invested, their costs are met by the investor whether or not (A) the fund produces profits for the investor ( the returns are greater than inflation.

As a former IFA based in the UK and the USA I find it strange that investments are still seen as the domain of these supposedly professional Fund Managers, when the majority of people have both the knowledge and (without actually knowing it) the risk appetite to look after their own affairs

I read a good article the other day which I would suggest does focus the mind on investing here or elsewhere. See http://www.asia-backpackers.com/?flipbook=true

[scobie redux]

Expatj.....sound advice...

But..."200-400k$ into annuities will give @1-2,200 $ per month, guaranteed till you die and this can be part of a good solid income foundation for any retirement."

What if the company that sold you the annuities with a guaranteed income goes bankrupt????

the advice would be sound if annuities existed which yield 6.00 - 6.60%

any financial institution which sells nowadays annuities and promises the above-mentioned yield can't go bankrupt. it is already bankrupt!

Not necessarily true. It will depend on a lot of factors including age, health, expected longevity, inflation-linked, single income or spouse benefits etc. 6000 income on a 100000 pension pot is not that uncommon in the UK.

that might apply to an old fart, heavy smoker, having a history of three heart attacks and an average life expectancy of less than a dozen years.

if you disagree please provide a link to any financial institution that provides nowadays annuities yielding 6%.

Google annuity rates UK. Plenty of press articles suggesting a 50000 pot will buy a 3000 annuity.

[Naam]

Google annuity rates UK. Plenty of press articles suggesting a 50000 pot will buy a 3000 annuity.

excerpts only:

The rates for annuities - products which provide an annual retirement income - have dwindled to their lowest level for years, a report says.

The average annual income for a 65-year-old man buying a standard annuity dropped by 11.5% in 2012, financial information service Moneyfacts said.

This was the biggest drop since 1998.

"Annuity rates have fallen by a third in just four years. For people approaching retirement, that is a huge blow to their expectations at a time when it is probably too late for them to do anything about it."

http://www.bbc.co.uk/news/business-20957314

Your Honour, i rest my case

[rgs2001uk]

Google annuity rates UK. Plenty of press articles suggesting a 50000 pot will buy a 3000 annuity.

Please dont tell me they are operating from a certain building in lower Suk Bkk, even numbered soi.

[scobie redux]

Google annuity rates UK. Plenty of press articles suggesting a 50000 pot will buy a 3000 annuity.

excerpts only:

The rates for annuities - products which provide an annual retirement income - have dwindled to their lowest level for years, a report says.

The average annual income for a 65-year-old man buying a standard annuity dropped by 11.5% in 2012, financial information service Moneyfacts said.

This was the biggest drop since 1998.

"Annuity rates have fallen by a third in just four years. For people approaching retirement, that is a huge blow to their expectations at a time when it is probably too late for them to do anything about it."

http://www.bbc.co.uk/news/business-20957314

Your Honour, i rest my case

Then your case is very weak.

That article merely states that annuity rates in 2012 had fallen. There is no argument about that; it's true. However, rates have increased in 2013.

Instead of posting a link to a generalist article which says nothing about what we are discussing, how about looking at real annuity rates provided by this link.

http://www.hl.co.uk/pensions/annuities/annuity-best-buy-rates

[benalibina]

I would advise stocks at the moment. Following shares will rise in coming time.

Alcoa - nyse

Arcelor Mittal - cac

Air france klm - aex index

The latter 2 have risen between 20 - 35 % recently and are on mid/long term rise.

Alcoa has bottemed as well.

IMO within a year for the 3 a minimum 50% increase is doable. Downwards risk midterm from current price is 20%.

For the 1s playing more safe RD Shell is a good 1. Dividends every quarter.

[salapau]

Don't invest in Thailand !

[scobie redux]

Don't invest in Thailand !

Silly advice.

The Thai Stock Market - to name just one thing - was the fifth best performer last year, rising over 35%.

Thai bonds are perfectly safe, probably safer even than more respectable nations' sovereign debt.

I currently get 8% per annum yield on a Thai property.

There is nothing intrinsically wrong with investing in Thailand at all.

[Cheapcharly]

In fact invest all u can lose in us trust funds. It s 100% safe...

They need your cash asap!

[bocceball1]

nothing wrong with investing in Thailand.....Just have to know what you're doing and not go in blindly....

Many think buying a home is an investment ....WRONG....Yes your putting a lot of money into real estate but its for you to live in and hopefully raise a family...

In investments...look at the 1) risk and 2) return on your investment....

Yes!!! Thailand is risky (but you can manage those risks...depending on the investment)

I have invested in Thailand and have done rather well.....AND I continue to invest in it....(just have to do you research.....and yes I have made mistakes ....but you know what ....for me....I LEARN from my mistakes!)

[Jim walker]

Always work for yourself never for someone else to make them rich, and always pay your due taxes so you never need to worry about that knock on the door one day from the tax man coming to clean you out and shut you down as they often do in the UK.

[scobie redux]

Always work for yourself never for someone else to make them rich, and always pay your due taxes so you never need to worry about that knock on the door one day from the tax man coming to clean you out and shut you down as they often do in the UK.

Fascinating advice but as relevant to this thread as a tip to always wash behind your ears before you go to bed . .

[Cheapcharly]

If you don't have 17t debt, you are richer than the USA.

[Arkady]

I follow the following:

1) Never use foreign/farang financial advisers who are based in Thailand; never use advisers who cold call.

2) Split your portfolio - 10% gold; @30% in long term 'secure' stocks to leave for 5-20 years i.e. blue chip US dividend stocks (reinvest the dividends in the stock) and Mutual Funds; @35% actively managed stocks (good for those of us who like to use technical analysis, follow market more closely) and corporate bonds; 25% cash.

3) Try and buy one or two rental properties as part of your portfolio.

4) Try and line up some secure income streams for retirement- i.e. a defined benefit pension, govt pension or annuity (likely/hopefully rates will improve in next few years significantly for annuities) . The stress of having to retire with a fixed pot of money and estimate how long you will live for is terrible plus when you are old and feeble you wont be able to manage your investments so well (plus who - apart from some on thaivisa ha- wants to spend their retirement online reaching investments to ensure a steady income flow!?). So for those with big enough portfolios and without a steady pension- 200-400k$ into annuities will give @1-2,200 $ per month, guaranteed till you die and this can be part of a good solid income foundation for any retirement.

you can't underline this enough:

never use advisers who cold call.

They call me frequently....there must be people who believe them else they wouldn't call all the time.

Before I always told them that I complete broke and bankrupt, but even that doesn't work anymore.

I would tell my staff to tell them that I died.....but my wife thinks that is not appropriate and unlucky. I believe it would be very lucky to be deleted from their database

Like all direct selling businesses it's a game of numbers. They are promised very high commissions from the layers of fees that will be skimmed from your savings, if you agree to invest with them. So it's worth their while to take many rejections for every lead they manage to convert to a sale. Some of the salesmen in turn get ripped off by their employers and never receive their commissions but its hard to shed a tear.

[kannot]

...100k .....blocked funds in an account in your name....in a Top 10-25 World Bank.....

........can reap you at least 5% per week...which you can withdraw weekly....

...worth investigating....I can give you the Compliance Officer's contact details...an American with a 25 year track record....

i might be interested if that "top bank" throws in a few free blowjobs and foot massages per week. please clarify and let me know. in the meantime i will prepare the 100k cheque.

I think his friends a "banker" ( hope Naam can understand this English slang?)

What do I know?? just spread it around in many different things and plan for total meltdown in which scenario I am almost self sufficient in food/ water until the natives come by and do me in!!

Always remember those scenes of suitcases full of money in Germany to buy a loaf of bread etc

[kannot]

Don't invest in Thailand !

I often wear my vest in Thailand