chiangmai
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Post by chiangmai on Aug 23, 2017 15:04:01 GMT 7
As I remembered UOB had an OK website for outlining some of the LTF rules. I did a quick search as website pages move around. It's here now: www.uobam.co.th/en/tax-benefit/ltfThey also have a manual for investing but all in Thai which can be downloaded on that www.uobam.co.th/srcm/tax_benefit/mjpksbjll/sb/jl/o0x0/%E0%B8%84%E0%B8%B9%E0%B9%88%E0%B8%A1%E0%B8%B7%E0%B8%AD%E0%B8%81%E0%B8%B2%E0%B8%A3%E0%B8%A5%E0%B8%87%E0%B8%97%E0%B8%B8%E0%B8%99-LTF-AIMC-28-Aug-2015.pdfWe've also a few other threads on this on Big Mango Just to emphasise though LTFs are not always "tax free": - Capital gains tax if held according to the rules = yes tax free - Dividends not necessarily free from income tax/ witholding tax if you select a dividend paying LTF. Dividends suffer withholding tax at either 1) Flat 10% or 2) your marginal rate of tax. What we've tended to do is if not a taxpayer in the year, then ask the fund provider to change the set up so no WHT is deducted. If you have enough tax allowances then this covers any tax liability so your marginal rate is zero. But when working and paying tax at say 35% it makes sense to switch back to the flat 10%. It's your choice and you can choose each year. Two steps: i) get your provider to change whether WHT tax is deducted at 10% or not ii) possibly add in as income on your tax return if you need to do one. If you went the 10% flat method you just exclude it, if the no WHT method you include it as income - Inheritance tax - I believe it is just another asset like any other. So if you need to pay inheritance tax in the UK or in Thailand then it's part of your estate. That's a useful UOB link that you posted regarding tax, I hadn't seen that, thank you. One of the motivators for wanting to open this account is that we have a sum of money sat in a Kasikorn account doing nothing other than acting as a buffer against our household direct debits each month, there's far too much in there for that purpose alone. The secondary purpose (which is actually the primary) is the account represents interim funds for my wife/partner in the event something happens to me, the funds are designed to support her whilst probate is being conducted. It's useful to have that money invested in an account that is in joint names, the only such account we have, this is especially true since neither one of us is a tax payer and are not benefiting from any tax relief via this account.
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chiangmai
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Post by chiangmai on Aug 23, 2017 17:51:01 GMT 7
Yet another article suggesting a market crash is imminent, all the warning signs are there, "they" suggest: www.bloomberg.com/news/articles/2017-08-22/wall-street-banks-warn-winter-is-coming-as-business-cycle-peaksI read recently that the chances of a 20% drop in the value of the markets are the same as a 20% rise, yet nobody is talking about or expecting the latter, why is that I wonder! That having been said, the big banks have joined the chorus with their warnings also, HSBC, Morgan Stanley and Bank of America now all suggesting similar things, should we be worried or, because it's the slow month of August should we also just chill out and go on holiday?
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AyG
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Post by AyG on Aug 23, 2017 18:34:35 GMT 7
Yet another article suggesting a market crash is imminent, all the warning signs are there, "they" suggest: www.bloomberg.com/news/articles/2017-08-22/wall-street-banks-warn-winter-is-coming-as-business-cycle-peaksI read recently that the chances of a 20% drop in the value of the markets are the same as a 20% rise, yet nobody is talking about or expecting the latter, why is that I wonder! That having been said, the big banks have joined the chorus with their warnings also, HSBC, Morgan Stanley and Bank of America now all suggesting similar things, should we be worried or, because it's the slow month of August should we also just chill out and go on holiday? Yes, the equity markets are going to crash. Probably in the next year or two. However, they will bounce back. They always do. Any attempt to time the market is pure folly. It's simply not possible. Just buy and hold. Even after a crash most markets will recover after a year or two. Even after the Great Crash of 1929 you'd have got your money back in 4 1/2 years, provided you'd held tight. That said, one market I'd be really concerned about is the (conventional) bond market. When interest rates rise bond prices will fall, and dramatically. It's going to be a bloodbath. The only question is whether the blood letting will be a prolonged experience (which is what I anticipate), or a rapid slaughter (also possible). Incidentally, any article which references Game of Thrones should be ignored as click bait. No serious journalism there. The article is also US-centric. Not really applicable to people with a globally diversified portfolio. So yes, go on holiday. Come back in 10 years and see how things have worked out.
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chiangmai
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Post by chiangmai on Aug 23, 2017 20:14:03 GMT 7
Yet another article suggesting a market crash is imminent, all the warning signs are there, "they" suggest: www.bloomberg.com/news/articles/2017-08-22/wall-street-banks-warn-winter-is-coming-as-business-cycle-peaksI read recently that the chances of a 20% drop in the value of the markets are the same as a 20% rise, yet nobody is talking about or expecting the latter, why is that I wonder! That having been said, the big banks have joined the chorus with their warnings also, HSBC, Morgan Stanley and Bank of America now all suggesting similar things, should we be worried or, because it's the slow month of August should we also just chill out and go on holiday? Yes, the equity markets are going to crash. Probably in the next year or two. However, they will bounce back. They always do. Any attempt to time the market is pure folly. It's simply not possible. Just buy and hold. Even after a crash most markets will recover after a year or two. Even after the Great Crash of 1929 you'd have got your money back in 4 1/2 years, provided you'd held tight. That said, one market I'd be really concerned about is the (conventional) bond market. When interest rates rise bond prices will fall, and dramatically. It's going to be a bloodbath. The only question is whether the blood letting will be a prolonged experience (which is what I anticipate), or a rapid slaughter (also possible). Incidentally, any article which references Game of Thrones should be ignored as click bait. No serious journalism there. The article is also US-centric. Not really applicable to people with a globally diversified portfolio. So yes, go on holiday. Come back in 10 years and see how things have worked out. Hi AyG, You have been warned by deadduck for a comment made in a topic, Pension Portfolios. You are being warned for a post you made. Making comments such as "any article which references Games of Thrones should be ignored as click bait" is considered a comment on moderation and such comments have the potential to derail a topic. Games of Thrones is a fine and upstanding program and beyond your criticism, all the Mods here watch it and we know best. You are under no obligation to read any thread and are under even less of an obligation to respond. If you do respond, please respond to the topic of the thread. You have violated that rule and have been given 100 points which will never expire, ever, not this year, not next, not ever! Restricted from posting - 23 hours and 59 minutes, or 8 pm today, which ever comes first.
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chiangmai
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Post by chiangmai on Aug 25, 2017 14:58:02 GMT 7
This is what my pension portfolio looks like currently, I'm putting it up for comment and critique, I'm hoping by the end of this month to have it sufficiently complete to be able to use it as a template for my next investment portfolio. Several things have changed since I started this project, including: I now feel sufficiently comfortable changing my asset allocation ON AN INTERIM BASIS from a target 50/50 to something weighted more heavily in favour of equities. I've taken on board the issue of bonds and their associated risk when rates rise but until I determine what my solution to that issue might be, I'm hanging on to four of my bond funds (one of which is index-linked and one being an IT). I've also taken on board the UK Gilts issue and have now mostly sold all of them. An interest rate rise still seems some way off hence I have some time on this issue to develop a solution. I'm tracking performance daily of each of my 14 funds, I'm doing this because I want to better understand the relationship between events and individual funds and between equity and bond funds - I will continue that tracking for about a month or so. Note: the Gilts allocation is a place holder for WIP. My platform charges have just been reduced to an effective 0.75% and my dealing charges now work out to be about two Pounds per purchase - pension wrapper cost is 80 Pounds per year. FWIW the portfolio is ahead 1.94% since the 1 August. Attachment Deleted
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chiangmai
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Post by chiangmai on Aug 28, 2017 18:11:29 GMT 7
I'm confused, (so what else is new you ask)!
If Gilts have no place in an investment portfolio and bonds are a drag on performance, how come my best performing fund this month is, "iShares £ Indx-Linked Gilts ETF GBP (Dist) (INXG)", where my holdings have increased by 6% in value - my second best is, "Fidelity Institutional Index-Linked Bond (Inc)", which has increased by 5.6%?
OK so it's only one month in twelve which is a very small window for review, BUT, it was an action packed month with nuclear war being threatened in the Far East, the US veering towards civil and political unrest and Brexit going from bad to worse, hardly a business as usual month. Once again I am not trying to be argumentative with these issues but it seems to me there is a very clear and useful role for these normally sedate low performers, just as there is for a life jacket on a modern cruise ship or airplane.
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AyG
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Post by AyG on Aug 28, 2017 18:40:18 GMT 7
I'm confused, (so what else is new you ask)! If Gilts have no place in an investment portfolio and bonds are a drag on performance, how come my best performing fund this month is, "iShares £ Indx-Linked Gilts ETF GBP (Dist) (INXG)", where my holdings have increased by 6% in value - my second best is, "Fidelity Institutional Index-Linked Bond (Inc)", which has increased by 5.6%? You are confusing conventional Gilts, paying a fixed coupon, with Index-linked Gilts. The 60/40 type of portfolio that you've been attracted to is based upon conventional Gilts - not Index-linked ones. They have very different characteristics. If you're investing without understanding the differences you're playing a dangerous game. Conventional Gilts, in my opinion, have no rational place in a portfolio. However, Index-linked ones do. In fact, until recently I held INXG. A few months ago I swapped it out for Lyxor FTSE Actuaries UK Gilts Inflation-Linked (DR) UCITS ETF [GILI.LN] which has significantly lower charges. I also hold a US/USD equivalent, Lyxor US TIPS (DR) UCITS ETF [TIPG.LN]. Incidentally, isn't it interesting that a managed bond fund was outperformed by a tracker? I personally believe that for mainstream bond funds fund managers add no value, and that a tracker is the way to go. Your interest in performance over one month is, I would suggest, unhealthy. One month is a tiny blip in the scale of things. And such detailed monitoring runs the risk of over-trading based upon a bad month or two. Oh, and not wanting to boast, my best performing fund last month was up 14.95%, and it wasn't a bond fund, but a conventional equity fund investing primarily in the UK.
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AyG
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Post by AyG on Aug 28, 2017 19:55:29 GMT 7
You are confusing conventional Gilts, paying a fixed coupon, with Index-linked Gilts. The 60/40 type of portfolio that you've been attracted to is based upon conventional Gilts - not Index-linked ones. They have very different characteristics. Just to expand upon that. Assume that interest rates and inflation are correlated, which is pretty much broadly true. Now when interest/inflation rates rise the capital value of conventional bonds falls (the value of the future interest is devalued because of inflation), but the capital value of index-linked bonds stays about the same because the amount of interest to be paid rises in line with inflation. In other words, the two asset classes respond totally differently to rising interest rates/inflation.
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chiangmai
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Post by chiangmai on Aug 28, 2017 20:00:52 GMT 7
I'm confused, (so what else is new you ask)! If Gilts have no place in an investment portfolio and bonds are a drag on performance, how come my best performing fund this month is, "iShares £ Indx-Linked Gilts ETF GBP (Dist) (INXG)", where my holdings have increased by 6% in value - my second best is, "Fidelity Institutional Index-Linked Bond (Inc)", which has increased by 5.6%? You are confusing conventional Gilts, paying a fixed coupon, with Index-linked Gilts. The 60/40 type of portfolio that you've been attracted to is based upon conventional Gilts - not Index-linked ones. They have very different characteristics. If you're investing without understanding the differences you're playing a dangerous game. Conventional Gilts, in my opinion, have no rational place in a portfolio. However, Index-linked ones do. In fact, until recently I held INXG. A few months ago I swapped it out for Lyxor FTSE Actuaries UK Gilts Inflation-Linked (DR) UCITS ETF [GILI.LN] which has significantly lower charges. I also hold a US/USD equivalent, Lyxor US TIPS (DR) UCITS ETF [TIPG.LN]. Incidentally, isn't it interesting that a managed bond fund was outperformed by a tracker? I personally believe that for mainstream bond funds fund managers add no value, and that a tracker is the way to go. Your interest in performance over one month is, I would suggest, unhealthy. One month is a tiny blip in the scale of things. And such detailed monitoring runs the risk of over-trading based upon a bad month or two. Oh, and not wanting to boast, my best performing fund last month was up 14.95%, and it wasn't a bond fund, but a conventional equity fund investing primarily in the UK. A few corrections to what you wrote: I have never been attracted to Gilts of any kind, I inherited management of a portfolio that included Gilts and sought to clarify their value before heeding advice that they were of no value! You stated Gilts have no place in an investment portfolio and I sought to clarify that....now clarified. I continue to hold the index linked Gilts I mention above, (described previously as WIP). I don't think I am confusing much at all on this point, oddly enough I do understand the difference between conventional Gilts and an index linked managed Gilt fund!!! I have never been attracted to any particular type of portfolio, 20/80, 60/40 or any other combination. I have concluded during August, based on what I've read and understood, that circa 50/50 is probably the most suitable for me presently. As it happens, my (unhealthy?) review of the performance of funds during August highlighted the outperformance of my Gilts holdings and was the sufficent reason to make me want to keep them. Tracker or Managed: I also read consistently that tracker funds outperform managed funds and I hold a tracker fund hence I'm unsure of your point here. My interest in tracking performance on a daily basis for a one month period is, as stated previously, to further my understanding of some of the behavioural characteristics of equities versus bond funds et al, in a real world, I want to better understand what happens when and why, if I can - there's nothing unhealthy about that I can imagine and thus far it's a practice that has proved highly beneficial, perhaps more experienced and seasoned investors have no need for such tactics but we that are still learning do! Finally congratulations on achieving a 14.95% uplift of a single fund in a single month, I'm very happy for you!
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chiangmai
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Post by chiangmai on Aug 29, 2017 4:50:59 GMT 7
I think this thread has probably run its course, it has for me at least, many thanks to those who have provided constructive and useful input, it has been much appreciated.
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Post by Fletchsmile on Aug 29, 2017 10:29:13 GMT 7
I have to disagree that conventional bonds have no place in an investment portfolio, particularly for a pension portfolio that is drawing income. It's far too much a generalising sweeping statement.
One obvious omission in this over simplifying is that if you hold bonds to maturity for income you aren't that interested in day to day market fluctuations. For example I hold some Coop 11% 2025 Final Repayment notes. Their current yield to maturity is around 9%. 9% is a very nice income level in return for the credit risk. Given I plan to hold it for its income for the next 8 years or so I don't care about the price too much. The price is obviously at a premium to par and will gradually drift downwards to par over the years. Neither equities or index linked bonds offer a fixed 9% income return for the next 8 years. The key risk here is also credit risk not interest rate risk, so I am also diversifying the types of risk I take. For someone looking to take a guaranteed 4% from a portfolio this is a very nice earner.
Another key point is that at different points in the cycle different assets fair well. Bonds have been in a bull run and did well during falling interest rates.
I also just had a look at 3 bond funds offered as index trackers thru trustnet, and their rolling 12m periods for the last few years.
iShares Corporate Bond Index Class H - Accumulation (GBP): +0.3%, +14.7%, +3.3%, +8.2%, +2.5%
Legal & General Global Inflation Lnk Bond Indx Class C - Accumulation (GBP): -1.5%, +5.7%, -2.3%, +6.2%, NA
Legal & General All Stocks Gilt Index Trust Class C - Accumulation (GBP) -3.7%, +15.3%, +5.9%, +6.2%, -4.9%
For someone looking to take 4% p.a. The corporate bond index achieves the objective comfortably with low to moderate risk. The index link bond fund wouldn't have cut it. They would have been the drag on an investment portfolio, much more so than corporate bonds.
Not to say index linked bonds don't have a place either, but just to highlight it really depends on so many other factors including what you're looking for/ objective and the various investment cycles.
If looking long term for investment growth/wealth creation as opposed to drawing for income/wealth protection there's perhaps a stronger argument for excluding bonds. For many of my earlier years I didn't bother with them much and just rode out the risks, peaks and troughs of equities for higher long term returns. However, now drawing income and with portfolio survival rates now being a factor my view has changed.
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Post by rgs2001uk on Aug 29, 2017 21:31:02 GMT 7
We are all at differing stages, for the time being I am more than willing to forego regular dividends (income) for capital growth. This looks to way volatile for me, despite the divi. Performance over 5 years is poor despite the 3.7% divi. www.hl.co.uk/shares/shares-search-results/m/murray-international-trust-ord-25p-shareI dont hold the above and doubt if I ever will. I have never held and never will hold tracker funds. Maybe I am just too thick to understand them, I would rather stick to what I know and am comfortable with. Be aware the above is posted for informational purposes only, anyone acting on it as financial advice should probably see a shrink.
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chiangmai
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Post by chiangmai on Aug 30, 2017 8:22:46 GMT 7
We are all at differing stages, for the time being I am more than willing to forego regular dividends (income) for capital growth. This looks to way volatile for me, despite the divi. Performance over 5 years is poor despite the 3.7% divi. www.hl.co.uk/shares/shares-search-results/m/murray-international-trust-ord-25p-shareI dont hold the above and doubt if I ever will. I have never held and never will hold tracker funds. Maybe I am just too thick to understand them, I would rather stick to what I know and am comfortable with. Be aware the above is posted for informational purposes only, anyone acting on it as financial advice should probably see a shrink. "We are all at differing stages"...key statement, nail, head.
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chiangmai
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Post by chiangmai on Sept 1, 2017 7:13:41 GMT 7
I particularly like the daily bulletin from Trustment this morning, it worth reading although expert investors will doubtless find fault with it! www.trustnet.com/news/754181/the-professionals-safe-havens-for-investors-looking-to-hedge-portfolios?utm_source=Trustnet%20Newsletters&utm_campaign=c2f7936d43-20170831_ec_retail8_31_2017&utm_medium=email&utm_term=0_2314bd04ee-c2f7936d43-77275453The subject is what investments to hold in a downturn, amongst the statements made are: Regarding I/L Gilts: “From an investment perspective we don’t like them: they are overpriced, offer virtually no yield and only provide inflation protection if you hold them for around 20 years,” Willis noted. “However, we have realized that whenever there is any sudden risk aversion, they become well supported. “As such, even though we don’t like them from an investment case, we use them as a small hedge within our model portfolios in case our base investment case is wrong in the short term.” Regarding currencies: "it has been the strength of other currencies rather than the weakness of sterling that has kept it at low levels". "While the dollar traditionally holds up better than many other currencies as it is seen as the ‘global currency’, Dampier noted that sterling is probably the best place for UK investors as it is coming from a low base".
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chiangmai
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Post by chiangmai on Sept 3, 2017 4:56:35 GMT 7
I've decided that being an active investor is much like being a pilot, everything is geared towards managing an emergency whereas the actual flying itself is quite boring and there's not much to do at all apart from sitting back and observe - will markets run out fuel, can I steer around this storm or is my plane strong enough to fly right through it, will I be able to land safely in a storm, am I moving too fast or too slow to meet the schedule, that kind of stuff. I was talking with Mrs CM about this and she looked at me strangely and said she would buy me a pair of aviator goggles for when I was reading Trustnet and has now started calling me Biggles. a strange girl indeed! But now that I've passed the two-month mark I was reflecting on the different things that people have said on the subject of investing. Going all into equities seems to be like the early call to Go West Young Man, fraught with danger with a chance of great reward.....a young mans sport if ever there was one. The opposite, of course, is to suggest the older person should live their retirement using only index linked bond yield income, a more boring existence I can't imagine. Ah yes, but as an active investor, you can have both those things at different times as the need arises and circumstances permit, all you have to do is watch every the market every day, read every news article daily from around the world and be prepared to act in advance when unanticipated surprises pop up, it would barely leave me time to cut the grass for Gods sake! So the game seems to be all about achieving the right balance, which for me is a bit of an Easter Egg hunt - is there sufficient power in the engines to generate continual and consistent thrust whilst ensuring all emergency systems are in perfect working order. I've decided that it's too easy to go overboard in equities without having suitable support for when an event negatively impacts markets and my experiences during August have confirmed this, my bond holdings finally up 8.1% during the month whilst my equity holdings averaged less than 3% and went negative a couple of times, what would have happened if it had been a more significant event I wonder! As a retiree, I've decided I now want to de-risk my portfolio to a more sensible level and I want to add a product to it that will generate some income in the good times but will stand up well during a crisis, the premise being that we remain in a low-interest rate environment for some time. BTW this is a tweak rather than a wholesale restructuring and yes, I'm happy to accept a certain amount of drag. Absolute Return funds seem to be fashionable and overhyped, Index Linked Gilts seem safe but maybe too conservative whilst index linked corporate bonds. One area that does seem to have potential is low or minimum volatility funds, which whilst still equity funds, historically suffer lower levels of loss than most others. Any other suggestions, anyone? Biggles out! www.kiplinger.com/article/investing/T031-C016-S002-investors-are-you-ready-for-the-next-global-crisis.html
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