Stable Baht investments

[kanwisher]

Watching the madness with the Euro and Swiss franc lately, has made me feel most currencies are a risky bet long term. I'm planning on spending the next 10-20 years in Thailand planning on moving 25% of my USD assets, while the dollar is still quite strong here. I've been thinking about what are decent moderate risk investments. The stock market seems quite violative here, people at my job here seem to lost quite a bit with the recent drop in oil prices. Condo/house seems like a safe way, at least then you don't have to pay rent if the economy goes to hell. The interest rates on banks and CDs seems quite low. So not sure what other people are doing who want to have some portion of their money in Baht?

[billphillips]

Bring your money to Thailand. Buy gold.

Since the beginning of December 2014 it's gained 10%.

[AyG]

Bring your money to Thailand. Buy gold.

Since the beginning of December 2014 it's gained 10%.

On 1st December you could buy gold for 18,250 Baht. Last Saturday you could sell it for 19,150. That's less than a 5% increase.

4 years ago today gold was at 19,750. If you had bought gold at pretty much any time in the last 4 years you'd be sitting on a loss, and that's not taking into account the effect of inflation or any interest you could have gained by putting the money into the bank.

Gold is a lousy investment.

[billphillips]

You are right it's not 10% but it's not 5% either.

It's a little more than 7%.

I would say that a 7% return for two months investment was about as good as it can get. Perhaps someone can suggest a better option for this poster.

Gold is a great investment.

[AyG]

ImageUploadedByThaivisa Connect Thailand1423447109.052158.jpgImageUploadedByThaivisa Connect Thailand1423447136.699489.jpg

You are right it's not 10% but it's not 5% either.

It's a little more than 7%.

I would say that a 7% return for two months investment was about as good as it can get. Perhaps someone can suggest a better option for this poster.

Gold is a great investment.

You're cherry picking your dates. A late November price is not "since the start of December". And you're using Friday's price, not Saturday's, which was 19,050/19,150 Baht (after a fall of 400 Baht/Baht weight).

So, my 5% figure is accurate given your original criteria.

Anyway, this recent 5% increase is merely a blip compared with the fall from above 26,000 in 2011 to 19,050 - a loss of more than 26%. (I can cherry pick dates, too.)

As for "Gold is a great investment", I very much doubt I'll convince you otherwise, so I'll leave the matter there.

[AyG]

The stock market seems quite violative here

The problem with the Thai stock market for me is not the volatility - all stock markets are volatile, but over the longer term equities consistently outperform other asset classes such as bonds, commodities and property. In my opinion the problem is that many SET-listed companies are not run for the benefit of all shareholders. Often there is a founding family behind the scenes, or a large percentage of the shares is held by a single entities (or group of entities). That leads me to conclude that the best way to access the market is through quality active management.

One of the best active managers in this market is Aberdeen. I prefer to keep my investments offshore, and I hold Aberdeen New Thai, an investment trust listed on the London Stock Exchange. However, within Thailand (and denominated in Thai Baht) is Aberdeen Siam Leaders (fund). Over the last calendar 5 years it has returned 43.07%, 8.54%, 52.84%, -5.61%, 16.20% in Baht. Not too shabby.

Source: http://tools.morningstarthailand.com/th/snapshot/snapshot.aspx?tab=1&Id=F000000QWJ&ClientFund=0&BaseCurrencyId=THB&CurrencyId=THB&LanguageId=th-TH

I only pick this fund as an example. There are others out there with similar performance.

Anyway, I wouldn't be too quick to write off the Thai stock market as an investment for at least part of your money.

[roobaa01]

gdaya folks,

im a gold believer thus i invested quiet a bit in numismmatic gold coins which returned 10 % , as to line out such as

pandas, 20 us gold coins , south america like el salvdor graded by pscg and thai coins.

thereto term depossits nzd $ just 10.000 for 5 % presenttly www.anz.co.nz

cheers roobaa01

[kanwisher]

Ayg thanks for the suggestion, I don't put large amounts of money in non producing assets, Art, Gold, rare items. Its fine if your fabulously wealthy and ran out of diversification options. I prefer to be slowly gaining. I'll look at some of these active managed funds in Baht, allows me secure my future here even if currencies shift out of my favor.

The stock market seems quite violative here

The problem with the Thai stock market for me is not the volatility - all stock markets are volatile, but over the longer term equities consistently outperform other asset classes such as bonds, commodities and property. In my opinion the problem is that many SET-listed companies are not run for the benefit of all shareholders. Often there is a founding family behind the scenes, or a large percentage of the shares is held by a single entities (or group of entities). That leads me to conclude that the best way to access the market is through quality active management.

One of the best active managers in this market is Aberdeen. I prefer to keep my investments offshore, and I hold Aberdeen New Thai, an investment trust listed on the London Stock Exchange. However, within Thailand (and denominated in Thai Baht) is Aberdeen Siam Leaders (fund). Over the last calendar 5 years it has returned 43.07%, 8.54%, 52.84%, -5.61%, 16.20% in Baht. Not too shabby.

Source: http://tools.morningstarthailand.com/th/snapshot/snapshot.aspx?tab=1&Id=F000000QWJ&ClientFund=0&BaseCurrencyId=THB&CurrencyId=THB&LanguageId=th-TH

I only pick this fund as an example. There are others out there with similar performance.

Anyway, I wouldn't be too quick to write off the Thai stock market as an investment for at least part of your money.

[billphillips]

ImageUploadedByThaivisa Connect Thailand1423447109.052158.jpgImageUploadedByThaivisa Connect Thailand1423447136.699489.jpg

You are right it's not 10% but it's not 5% either.

It's a little more than 7%.

I would say that a 7% return for two months investment was about as good as it can get. Perhaps someone can suggest a better option for this poster.

Gold is a great investment.

You're cherry picking your dates. A late November price is not "since the start of December". And you're using Friday's price, not Saturday's, which was 19,050/19,150 Baht (after a fall of 400 Baht/Baht weight).

So, my 5% figure is accurate given your original criteria.

Anyway, this recent 5% increase is merely a blip compared with the fall from above 26,000 in 2011 to 19,050 - a loss of more than 26%. (I can cherry pick dates, too.)

As for "Gold is a great investment", I very much doubt I'll convince you otherwise, so I'll leave the matter there.

Ok

But if we cherry pick the dates a little more ....

If you bought gold 10 years ago, you would have doubled your money by now.

Anyway it's an ongoing situation. The way to profit from a transaction is to buy low and sell high. If you are for some reason forced to sell quickly, it's Sod's law that the price will be low at that time.

I doubt that I can convince you that gold is a good investment. It seems that you may have been unlucky / unwise already.

By the way; any alternative suggestions for the poster (that is, after all, what this thread is about).

Edit ... I would be interested too.

Edited February 9, 2015 by billphillips

[dean008]

Depending on where you want to live you could buy a nice but small condo in somewhere like Pinklao (near the grand palace/Banglampoo) for about 2 million, the condo would rent for about 9,000 per month or 108,000 per year, so if you stayed there for 20 years you would pay 2,160,000 in rent (assuming no increases), so buying would make sense. (I know I have not mentioned service charge/maintenance, but neither have I mentioned possible capital appreciation)

Good luck

[Misty]

Ayg thanks for the suggestion, I don't put large amounts of money in non producing assets, Art, Gold, rare items. Its fine if your fabulously wealthy and ran out of diversification options. I prefer to be slowly gaining. I'll look at some of these active managed funds in Baht, allows me secure my future here even if currencies shift out of my favor.

The stock market seems quite violative here

The problem with the Thai stock market for me is not the volatility - all stock markets are volatile, but over the longer term equities consistently outperform other asset classes such as bonds, commodities and property. In my opinion the problem is that many SET-listed companies are not run for the benefit of all shareholders. Often there is a founding family behind the scenes, or a large percentage of the shares is held by a single entities (or group of entities). That leads me to conclude that the best way to access the market is through quality active management.

One of the best active managers in this market is Aberdeen. I prefer to keep my investments offshore, and I hold Aberdeen New Thai, an investment trust listed on the London Stock Exchange. However, within Thailand (and denominated in Thai Baht) is Aberdeen Siam Leaders (fund). Over the last calendar 5 years it has returned 43.07%, 8.54%, 52.84%, -5.61%, 16.20% in Baht. Not too shabby.

Source: http://tools.morningstarthailand.com/th/snapshot/snapshot.aspx?tab=1&Id=F000000QWJ&ClientFund=0&BaseCurrencyId=THB&CurrencyId=THB&LanguageId=th-TH

I only pick this fund as an example. There are others out there with similar performance.

Anyway, I wouldn't be too quick to write off the Thai stock market as an investment for at least part of your money.

You didn't say what nationality you are - if you happen to be a US citizen just be aware that the way the US taxes non-US funds is punitive and the tax filing required is complex -US citizens should do their homework before wading in. LTFs and RMFs can still make sense for some Americans - but not all - depending on their situation.

[kanwisher]

Us Citizen here, still paying taxes in the US tho. I wasn't aware that non-US funds have punitive tax structures. Your saying I would pay more then the typical capital gains of 15%? Or are you just saying filing the tax paperwork is complicated, which is already my current situation.

---------

`quote`

You didn't say what nationality you are - if you happen to be a US citizen just be aware that the way the US taxes non-US funds is punitive and the tax filing required is complex -US citizens should do their homework before wading in. LTFs and RMFs can still make sense for some Americans - but not all - depending on their situation.

[georgeubon]

hey guys, when you are talking about buying golds. Does that means that i have to literally take the gold back to my condo from the goldshop??

What do you think about buying gold fund at a thai bank?? is that the same or when hell comes, the paper gold fund also vanishes?

[taiping]

gdaya folks,

im a gold believer thus i invested quiet a bit in numismmatic gold coins which returned 10 % , as to line out such as

pandas, 20 us gold coins , south america like el salvdor graded by pscg and thai coins.

thereto term depossits nzd $ just 10.000 for 5 % presenttly www.anz.co.nz

cheers roobaa01

Where can I buy gold coins in Thailand?

i.e. Krugerrands, Pandas, Maple Leafs, Eagles.

I buy Thai 96.5% gold bars and 99.99% gold bars, but gold coins?

Edited February 9, 2015 by taiping

[kanwisher]

Buying paper(stock) for Gold makes zero sense, if you are really trying to protect against a massive crash like end of soviet union style, then you would need physical gold. As you don't have any real claim with most of the paper backed Gold services. Its more just digital gambling. At least physical Gold would be guaranteed to retain some value. I don't have a ton of interest in precious metals, I don't really have means to protect physical property.

[taiping]

hey guys, when you are talking about buying golds. Does that means that i have to literally take the gold back to my condo from the goldshop??

What do you think about buying gold fund at a thai bank?? is that the same or when hell comes, the paper gold fund also vanishes?

Some of the Thai gold funds invest in physical gold (e.g. Thanachart Bank TGoldBullion H [hedged] and UH [unhedged]), while others invest in a gold ETF such as GLD (e.g. Krungsi Asset Mngt K-Gold fund). If and when hell freezes over I expect the physical gold fund is more likely to survive than "paper gold" such as GLD. You also have to pay the fund management fees which in the case of K-Gold are 1.12% pa. I guess Thanachart is similar. But funds are easier to sell online, during business hours.

Holding physical gold has the advantage that there are no management fees to pay, but there's a risk from theft, unless you insure against loss.

But with interest rates at record lows everywhere, and the precarious state of the world economy, I think it's prudent to have at least part of your assets in gold/silver.

[georgeubon]

thank you taiping. Also, i see a sign in thai at a goldshop inside a Tesco Lotus. The sign said to "rest your gold there"

Is that safe?

I like physical too but i think i will go with the online gold at a thai bank. If a "soviet style" arrived. I will deal with it then.

[Time Traveller]

Everyone wants high returns with no risk - that's not happening.

If your base currency is THB, then Thai bank deposits are the most stable.

If your base currecny is USD, then cash is the most stable.

If your investment horizon is 10 or 20 years, then why worry about stability? Go for stocks. Just don't try to time the market, drip feed your investment in over a period of say 5 years. This is about the lowest risk option for highest return which would have worked even during the great depression.

[recycler]

Cheap built rental rooms for Thai labor close to an industrial estate, only works if you have a Thai to manage it.

In some areas, certainly eastern seaboard there is a big shortage and looking at the construction of new company buildings it will be so for a while.

[johninbkk]

Holiday Home investment.

http://www.holidaylettings.co.uk/rentals/jomtien-beach/327330

http://www.holidaylettings.co.uk/rentals/jomtien-beach/1791768

http://www.holidaylettings.co.uk/rentals/jomtien-beach/327243

Interested!

[OneZero]

http://www.streetwisejournal.com/gold-moral-hazards-cheap-money/6148/?utm_source=newsletter-20150209-1454&utm_medium=email&utm_campaign=news

[monkeycountry]

hey guys, when you are talking about buying golds. Does that means that i have to literally take the gold back to my condo from the goldshop??

What do you think about buying gold fund at a thai bank?? is that the same or when hell comes, the paper gold fund also vanishes?

I am not into gold, but if I was, I would buy gold bars (not jewelry), and put them in a rented safe deposit box at the bank.

Edited February 9, 2015 by monkeycountry

[taiping]

thank you taiping. Also, i see a sign in thai at a goldshop inside a Tesco Lotus. The sign said to "rest your gold there"

Is that safe?

I like physical too but i think i will go with the online gold at a thai bank. If a "soviet style" arrived. I will deal with it then.

I don't know about the Tesco Lotus offer.

Normally, to get the best price, you have to sell physical gold back to the gold shop or gold dealer you bought it from. For that reason I prefer to deal with the well known and long established gold shops, not the small mum and pop gold shops.

For a semi-physical solution, there are also several gold funds listed on the SET, and some of them invest in physical gold. But the trade in them is thin, so it might not be easy to sell easily when you decide to do so.

Again physical in own possession is best, except it's not feasible for some people.

[khunPer]

European money – except British at the moment – are worse off with the declining value of Euro and Euro-bound currencies.

Don’t know what others may do, but I find Thailand stable enough to move some of my assets here, being following some stock rates over the past decade; also bank interest rates are in general a bit better than many European countries, and much better than my Scandinavian home-country with 0 percent bank interest rate and negative National Bank rate.

If you are going to use your savings in baht, it’s better to have them, or at least some, on deposit in Thailand.

For long-term savings paying dividend, I use some of the banks so-called Fund Books, which are mutual equity funds, and over the last 7-8 years I’ve used them, they have performed quite well, with 2-4 percent annual dividend, and 5-10 percent average annual increase of value. The “LTF” (Long Term Funds) has capital gain tax benefits, if held more than 5 years.

Some posters have mentioned that you easily can open a SET account, with an assigned bank savings account, and invest in named stocks. That should be a fairly simple procedure and stocks like highways have been mentioned as paying good dividend.

http://www.settrade.com/login.jsp?txtBrokerId=IPO

To “set aside” savings for later use, I deposit money in bonds, again using the banks various Fund Books. No dividends are paid, as the bonds are accumulating without interest withholding tax and capital gain tax. Depending of the risk factor the “interest” is between the upper end of a 12-month fixed bank deposit and up to some 4-5 percent per annum. Easy when you need money, just sell for the amount you wish to take out before 3pm, and the following bank day the money are deposit in you normal savings account.

I’m using Bangkok Bank, K-Bank and SCB; but presume most, if not all banks, offers Fund Books. I’ve found K-Bank having a very informative homepage in English that will give you a good overall view about various possibilities – other banks may offer similar products.

Kasikorn Asset Management:

http://www.kasikornasset.com/EN/Pages/Disclaimer.aspx?Source=http://www.kasikornasset.com/EN/MutualFund/ProductsFundFacts/Pages/Default.aspx

Investing in property is difficult due to limitations in foreign ownership. I would be skeptical with investing in a condo, as there will be ongoing service expenses and no guarantee for rental income. Furthermore it takes time to convert your assets into cash money. If the condo, or a house, is for own use instead of renting, the case is of course different.

Wish you good luck...

[roobaa01]

i d rather buy king bhumipol gold and silver coins, for example 5000 bath 1974 abouut 30 gr. , 3 years ago would sell for 40.000 thb now 60.000.

if the king dies then his coins go ballistic.

so mote it be.

roobaa01

[elgordo38]

ImageUploadedByThaivisa Connect Thailand1423447109.052158.jpgImageUploadedByThaivisa Connect Thailand1423447136.699489.jpg

You are right it's not 10% but it's not 5% either.

It's a little more than 7%.

I would say that a 7% return for two months investment was about as good as it can get. Perhaps someone can suggest a better option for this poster.

Gold is a great investment.

Gold will not be a good investment till people smarten up and see this funny money pyramid scheme scam for what it is. Its goosing stock markets world wide including here. It is a trap. All these phony gold certificates are holding down the price as well as they again are paper not physical gold. When the trap closes is hard to predict. If we have another 2008 recession/depression the sky is the limit for gold. All the gold in the world will only fill an Olympic size swimming pool. You do not need a lot of people to shift to gold as an investment strategy to make it shoot up. Once this mind set sets in well who knows where gold will go.

[AyG]

For long-term savings paying dividend, I use some of the banks so-called Fund Books, which are mutual equity funds, and over the last 7-8 years Ive used them, they have performed quite well, with 2-4 percent annual dividend, and 5-10 percent average annual increase of value. The LTF (Long Term Funds) has capital gain tax benefits, if held more than 5 years.

Just a couple of inaccuracies there.

(1) Mutual fund investments are not offered by banks, they are offered by asset management companies. However, some banks have associated asset management companies within their group.

(2) There is no capital gains tax in Thailand. The tax benefit for LTFs (and RMFs) is that contributions are tax-deductible in the year that they are made.

You can only invest up to 15% of your annual Thai income in LTFs, so they are of limited use to, say, retired people or those here on an investment visa and not working in Thailand.

[bazza40]

I don't know if it's possible to buy platinum in Thailand; however, it's my choice as a hedge against currency fluctuations because:

1/ Platinum has a number of critical industrial uses

2/ The two main producers are South Africa and Russia

3/ There is only one month's forward supply of platinum worldwide

It really baffles me how the USA can con the rest of the world into treating the dollar as a reserve currency with a 17 trillion dollar debt, bloated military spending, and a Red Queens Race in oil self-sufficiency.

[khunPer]

For long-term savings paying dividend, I use some of the banks so-called Fund Books, which are mutual equity funds, and over the last 7-8 years Ive used them, they have performed quite well, with 2-4 percent annual dividend, and 5-10 percent average annual increase of value. The LTF (Long Term Funds) has capital gain tax benefits, if held more than 5 years.

Just a couple of inaccuracies there.

(1) Mutual fund investments are not offered by banks, they are offered by asset management companies. However, some banks have associated asset management companies within their group.

(2) There is no capital gains tax in Thailand. The tax benefit for LTFs (and RMFs) is that contributions are tax-deductible in the year that they are made.

You can only invest up to 15% of your annual Thai income in LTFs, so they are of limited use to, say, retired people or those here on an investment visa and not working in Thailand.

Thanks for correcting me.

My post was only a short note and not a comprehensive detailed story (in that case I would still be writing and quoting sources). However the mutual funds are offered through the banks, like specified later in my post “Kasikorn Assets Management is offered by Kasiborn Bank (K-Bank) – it’s made very clear in the various banks that the Fund Books are offered by their assets management organizations.

According to guidance in the three banks I use, capital gain tax apply to equity, but not bonds, whilst LTF has tax privileges (and I don’t mention RMF that is retirement funds); Kassikorn Assets Management specific states:

»Investors must invest in LTF not less than 5 calendar years to get tax privileges of this two;

1. Exempt income tax for the total investment not more than 15% of total income and not more than 500,000 Baht each year

2. Free Capital gain tax for any income or profits from the redemption of the units of the fund«

(sic.)

Source: http://www.kasikornasset.com/EN/MutualFund/Pages/LTF.aspx

I can as retired use LTF with no problem, and when keeping my investment for minimum 5 years I’m free of capital gain tax, according to the advices from the kind staff in both K-Bank, Bangkok Bank, and SCB. I also use LTF for my Thai family and they obtain same benefits.

I am however not aware of how capital gain tax will be accounted from my other Fund Books, the ones not being bonds or LTF, as I have so far never sold from any – but according to a number of articles I have read by Sirirat C, Managing Director of Network Advisory Team (NAT) Ltd., “anyone residing in Thailand more than 180 days a calendar year is liable to pay tax on income from sources in Thailand as well on the portion of income from foreign sources that is brought into Thailand”.

She list a number of sources and as number 4:

“Income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings.”

(sic.)

Source: Samui Express March 3, 2011

I do believe there is “capital gain tax” in Thailand – I have always heard it as 15 percent – but I may be informed wrong...

[Misty]

Us Citizen here, still paying taxes in the US tho. I wasn't aware that non-US funds have punitive tax structures. Your saying I would pay more then the typical capital gains of 15%? Or are you just saying filing the tax paperwork is complicated, which is already my current situation.

---------

`quote`

You didn't say what nationality you are - if you happen to be a US citizen just be aware that the way the US taxes non-US funds is punitive and the tax filing required is complex -US citizens should do their homework before wading in. LTFs and RMFs can still make sense for some Americans - but not all - depending on their situation.

Both - you will be paying higher than capital gains tax annual on any unrealized gains with no deferral - and potential a much higher rate, depending on how you choose to file. And the paperwork is complicated. Googe PFIC and either "RMF LTF" or "Thai mutual funds" to learn more.