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Post by Fletchsmile on Oct 4, 2016 15:24:02 GMT 7
While the pound is hitting 3-decade lows, it looks like good news for the UK stock market  ================================================European Stocks Set for Longest Streak Without Losses in a YearEuropean stocks advanced across industry groups and regional markets, heading for a sixth straight day without losses.
The Stoxx Europe 600 Index added 0.6 percent at 8:21 a.m. in London. The benchmark traded in a range of about 6 points in the past five sessions, after concerns about the health of Deutsche Bank AG sent shares tumbling on Sept. 26. German markets reopened after a holiday, with the DAX Index rising 0.5 percent on Tuesday.
The Stoxx 600 is entering the final three months of the year after its first quarterly advance of the year. After jumping as much as 14 percent from a June low through the beginning of September, the Stoxx 600’s rebound lost steam last month as worries about the health of Europe’s banking sector took hold.
Investors are also awaiting U.S. economic releases for cues on the trajectory of borrowing costs, after weaker-than-forecast manufacturing data and hawkish comments from a Federal Reserve official boosted bets for a rate hike this year.
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AyG
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Post by AyG on Oct 4, 2016 17:05:11 GMT 7
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Post by Fletchsmile on Oct 5, 2016 13:46:54 GMT 7
I liked the following quote in that article from the Torygraph: Yes the world's definitely more complicated when investing these days. Being an expat can also make life even more complicated. One of the big plus sides though is an opportunity to more easliy diversify your money so you're less dependent on the whims of a particular currency or market |
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Post by Fletchsmile on Oct 5, 2016 13:49:02 GMT 7
... another opportunity that comes with being an expat is the opportunity to retire to a third world country perhaps earlier than you would otherwise. I'm not sure the UK should be aiming for 3rd world statuts though  |
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AyG
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Post by AyG on Oct 5, 2016 14:16:39 GMT 7
Being an expat can also make life even more complicated. One of the big plus sides though is an opportunity to more easliy diversify your money so you're less dependent on the whims of a particular currency or market I'm not sure that being an expat makes diversification any easier. To be honest, I'd say it broadly makes little difference (at least for citizens of developed, occidental countries). Perhaps I'm missing something? I've never gotten (and pardon the Americanism) to the bottom of the limitations for Thai residents/citizens investing overseas. A certain, square-faced Prime Minister never had any problems in that regards. The local products available to them, however, for the most part, suck buffalo dick. Charges are far, far too high to be reasonable. And the products range from the pedestrian (wrappers for overseas mutual funds that have done a bit better than average for a year or two, but with no guarantee of decent future performance, with added on dodgy, unexplained and unaccountable FX management) to the ludicrous and blatantly mismarketed (trigger funds). For me, the major plus of being an expat is not having to pay income tax... anywhere on investment income. (Sorry, Americans, not an option for you.) (OK, and this is a personal quirk, I don't reclaim tax deducted on any of my Thai investments. I would like to think that the tax deducted contributes to the general well being of the Thai people - as well as that of the Generals.) |
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Post by Fletchsmile on Oct 5, 2016 16:30:12 GMT 7
The things I had in mind as an expat which encourage you to diversify were: - Opening foreign bank accounts. Encourages you to keep money in different currencies as well as try new currencies. Much easier too than for say a tourist to do. - Getting an allowance for living in a particular country in that country's currency; or a step further getting paid in that local currency. If I hadn't been an expat in say Singapore or Thailand, I'd have probably never opened up bank accounts in those countries or got used to parking money there. I hate paying bank fees, so in these 2 countries in particular I largely kept money received in local currency in that currency, and things grew from there - Buying assets in the country you live in. eg our condo is a nice THB asset to have. Cost fixed. Family will have a roof over its head too. - Just generally being aware of what investments are available in that particular country and keeping money outside the UK. In addition the fact the Thai government gives someone up to 35% tax relief on thai equity funds is a very big incentive to invest here in Thai equities, which I probably wouldn't do if UK based All those are the type of things that if I was say UK based, living all my life in the UK, there's a good chance I wouldn't have diversfied into. So I'd be stuck with whatever the pound is worth for most of my cash, and perhaps most of my assets in the UK in GBP. A key exception would be investments in funds for overseas assets, but that would likely be a smaller % than now. Plus a few steps to avoid IHT. So all in all a fair few ways where I've spread money across different countries, currencies etc, that I perhaps wouldn't have done if not an expat. Obviously doesn't apply to the Thai Visa expat types who keep all their money back home where "it's safe", "never invest in Thailand", and never open a local bank account, so they can then whinge about ATM fees charged to expats |
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AyG
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Post by AyG on Oct 6, 2016 10:39:25 GMT 7
The things I had in mind as an expat which encourage you to diversify were: - Opening foreign bank accounts. Encourages you to keep money in different currencies as well as try new currencies. Much easier too than for say a tourist to do. Personally, I don't consider keeping money in different currencies a good thing. FX rates are far too volatile for my liking. The only significant amount of cash I hold matches my future expenditure: THB. I then hold a few thousand GBP to cover expenses such as flying back to the UK, and a small amount of USD which arises as income from one of my holdings. I wouldn't, for example, hold cash in SGD because it's a "safe" currency.- Just generally being aware of what investments are available in that particular country and keeping money outside the UK. Unfortunately, the investments available here are almost all unattractive  I really don't like the high fees on funds and ETFs in Thailand. As for investing outside the UK, that's rapidly being forced upon expats. Last time I checked there was only one generally available fund platform available to people without an IFA in the UK, and it's very difficult to find an IFA to get you in to one of the others. (And, more specifically, my IFA dropped me as a client, so I had to close my Transact account.) However, with the GBP 5,000 tax free allowance for investment income, the UK actually has become more attractive as a place to invest for expats. (Still need to watch the IHT limit, though.)All those are the type of things that if I was say UK based, living all my life in the UK, there's a good chance I wouldn't have diversfied into. So I'd be stuck with whatever the pound is worth for most of my cash, and perhaps most of my assets in the UK in GBP. A key exception would be investments in funds for overseas assets, but that would likely be a smaller % than now. Plus a few steps to avoid IHT. Home country bias is a serious issue, not only for expats, but all investors. I find it particularly shocking how Americans are advised to invest so heavily in US stocks, and how many do so. Personally, I have about 15% of my portfolio invested in the UK, and I only justify that figure by looking at the LSE as primarily (by value) a home for international companies.So all in all a fair few ways where I've spread money across different countries, currencies etc, that I perhaps wouldn't have done if not an expat. For me, the only real change in asset allocation since becoming an expat has been to introduce a 9% holding in Thailand, and slightly upping my broader exposure to SE Asia to around 19% (excluding Thailand).Obviously doesn't apply to the Thai Visa expat types who keep all their money back home where "it's safe", "never invest in Thailand", and never open a local bank account, so they can then whinge about ATM fees charged to expats I find the level of financial ignorance of many expats (particularly the ones who freely spout their ignorance at the other place). I'm particularly irked by the way they totally ignore FX risk, making stupid statements like "deposit your cash in AUD or LAK because the interest rates in Australia or Laos are so much better" and "I only invest in American shares". |
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Post by Fletchsmile on Oct 6, 2016 13:58:24 GMT 7
As a generalisation I'd agree that in several ways access to investment products in Thailand struggles to match what's available overseas. The 2 key exceptions for me on the products themselves are:
1) Tax based products, like LTFs and RMFs, where up to 35% tax relief is available. This makes a massive difference. eg buy a Thai equity fund here and get 35% tax relief, buy a similar product offshore, with perhaps slightly lower charges but no tax relief. Only applicable to taxpayers though, so for retired expats or those with complex worldwide income tax nets, they may be of little benefit
2) Thai equities. The choice of fund manager here in Thailand is much wider and much better for Thai equities. Charges are slightly higher, but performance can significantly outweight that. There's only half a dozen Thailand unit trusts and one investment trust based outside Thailand. Their performance doesn't really match say UOB Good Governance, Bualunag, MFC or Krungsri.
Aberdeen used to be OK, but they seem to have dropped the ball in the last few years on several emerging markets including Thailand. With their name absent it highlights the lack of choice outside Thailand.
So of the funds we've bought from Thailand, 80% are Thai equity based, with only 20% foreign funds. I'd rather pay a little more on charges for these 80% on Thai equities, than the Fidelity, Templeton etc available outside Thailand, which in my view are inferior, although perhaps slightly cheaper.
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Post by Fletchsmile on Oct 6, 2016 14:10:59 GMT 7
The other reasons for investing from Thailand aren't really based on the products themselves, which as mentioned (with the 2 exceptions above) there are often better products offshore.
These reasons really centre around, convenience, tax, personal circumstances and the general environment, rather than the products.
including:
- very convenient for a Thai partner to deal with if you're gone
- much easier to set up for a Thai partner.
- favourable environment for income tax, capital gains tax, (and inheritance tax if in someone else's name)
- more cost effective for small regular savings. eg if I save THB 10k a month for a child, this would get annihilated in bank fees and FX if transferring money out of Thailand. And then if brought back again in the future that's another set of bank charges and FX costs
I could save up and do say every six months or annually, but this means less time in the market and increases timing risks. If a market returns 8% pa and I wait 6-12 months to invest, that's quite a hit to returns over time if one reckons roughly half of the waiting period is lost on average
So it becomes a trade off factor between maybe a "worse" product (except in the case of LTFs, RMFs and Thai equities), but other non-product or environment/ convenience benefits
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I really don't like the high fees on funds and ETFs in Thailand. As for investing outside the UK, that's rapidly being forced upon expats. Last time I checked there was only one generally available fund platform available to people without an IFA in the UK, and it's very difficult to find an IFA to get you in to one of the others. (And, more specifically, my IFA dropped me as a client, so I had to close my Transact account.) However, with the GBP 5,000 tax free allowance for investment income, the UK actually has become more attractive as a place to invest for expats. (Still need to watch the IHT limit, though.)
