Personal investment

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  1. #51

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    connecta, you bank with my employer! wow, impressive

    I actually bought a fund with Hang Seng because of that discount. Bought the Merrill Global Allocation Fund which was doing pretty well. Oh well, lost 10% of its value now! My earnings from the BOC IPO didnt compensate for the loss


  2. #52

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    0.6% IN REAL TERMS!!! Hmmm, that isn't sounding so hot. I'd have to be the most risk adverse person in HK to take that deal. I also don't think i did the right initial calcs either.

    I'll try again: If i put in 4k/month for 10 years (which earns approx 5%/yr) then i have approx. $504k. But with two bonuses of $150k (whoops, previously said $110k) which the first is paid after 5 years and earns interest, then if i bail out straight after receiving the 10 year benefit, then i'll have $504k + $157k + $150k = $811k. Over ten years i've invested $480k and got back $811k. Roughly approximate to a 59% return which is about 5%/annum. The most important part is that its guaranteed.

    Does anyone know of any other Banks offering the same thing?


  3. #53

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    coolgirl > the hkrate now is between 3.8~4.5% for short term rates. so unless u have substantial sum of money doubt u can get that kind of high fixed depo yield. nevertheless, try the smaller banks like BEA. Heard they give up to 3.8 or 4% for the 1 year depo if you have 1mil HKD.

    Curly > are you sure that is guaranteed ? insurance based plan are on projections. they guarantee you the 150k every 5 years, but i don't think they guarantee you the 10 year surrender value. if there is a guarantee tell me what exactly you will get back and i'll see if it makes sense. return cannot be computed this way as the money you pay later have shorter timeframe to earn you the interest.


  4. #54

    Curly,

    In general it's better to buy insurance for your insurance needs and have a separate savings plan for savings. Not only is it easier to see how you're doing and what you're paying for but the combo's usually cost you more or underperforms.

    Coolgirl,

    By playing it too safe you can actually lose out in the long term. Say you invested $1,000 at 3% interest per annum in your time deposit and kept it there for 10 years. By the end of the time you'd have $1,340.

    Now if you had invested it and got a 10% pa return (that's a pretty average figure for how the S&P 500 has been performing over a 10 year period and that doesn't include dividends), then after 10 years you would have $2,590. That's almost DOUBLE the time deposit amount!

    You'd have to wait an extra 22 years before your time deposit reaches the same amount. Or, of course, you could just save twice as hard as the person who invests their money.

    These have massive effects on your retirement due the number of years you can get compound interest for. Keep your money too safe and you're still working to retirement because you have to. Invest your money wisely now and you could retire richer and earlier and do what you want with your time.

    The answer's pretty clear in my eyes.

    Last edited by chris_in_hk; 03-08-2006 at 07:12 PM.

  5. #55

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    Quote Originally Posted by chris_in_hk:
    Coolgirl,

    By playing it too safe you can actually lose out in the long term. Say you invested $1,000 at 3% interest per annum in your time deposit and kept it there for 10 years. By the end of the time you'd have $1,340.

    Now if you had invested it and got a 10% pa return (that's a pretty average figure for how the S&P 500 has been performing over a 10 year period and that doesn't include dividends), then after 10 years you would have $2,590. That's almost DOUBLE the time deposit amount!

    You'd have to wait an extra 22 years before your time deposit reaches the same amount. Or, of course, you could just save twice as hard as the person who invests their money.

    These have massive effects on your retirement due the number of years you can get compound interest for. Keep your money too safe and you're still working to retirement because you have to. Invest your money wisely now and you could retire richer and earlier and do what you want with your time.

    The answer's pretty clear in my eyes.
    Yes, theorically it is like you say, but you have no guarantee that you will get the 10% pa at the end. You have a risk for 10% pa and you can make $2590 out of $1000, but also $800 out of $1000 if things don't go as forecasted.
    Just personal experience...

  6. #56

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    agree with bobbybo, i had not advocated agressive self investment strategies because i think investment has to suit individual.

    personally i am agressive and i take high risk for the returns, but at the same time i am also cold enough to take a loss when things are wrong, or to leverage up when i feel suits. i have on hand all kinds of different underlyings to invest and hedge risk, long/short/futures/debts, etc..
    yet i think saving policies are suitable for some people with certain profiles.
    even insurance, no doubt having it separated is a good idea, is also not a bad deal because of the implication in certain corners that a normal investment would not have covered.

    chris has been in one of the better bull runs in recent years. the emotion of an investor in bull market and in bear market is very much different. go through the full phase and see how one reacts to the daily volatility, then u can tell if the long term average of S&P is achievable.

    let's compare apples to apples.


  7. #57

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    The highest rates for deposit and best flexibility I found is offshore HSBC Online Saver account with 5.05% of interest on USD account and interest paid monthly.
    You can withdraw at your wish, but you will not get interest for the month in which you withdraw. So, if you need money for something you cannot postpone, you know what you lose. I think it's even better than a fixed deposit.
    I got burnt before so, for me, 100% fund guarantee or nothing.


  8. #58

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    coolgirl, as you are with hangseng, you can switch to something else from ML for 0.5% fee, if you want to. but without having looked at the fund chart most blue chips gained yesterday as chances for a US interest rate decreased. it's still very volatile to make the right decision. the BOC IPO had a nice development, but most people i know just got a very tiny allocation. if your latest project is really happening, then you can maybe give me a higher allocation

    i think this hasn't been mentioned yet: one possibility to reduce the risk, are monthly investment fund plans where you automatically buy every month fund parts for a fixed amount of HKD. if the market is going up, then you buy less and if they are falling, then you buy more with the same monthly amount of money. by this you can get a good average purchase price for your investment funds and the right entry time to pick the bottom is not that important any more (you can even buy one day before a crash and automatically buy more fund parts the next month when the prices are low etc.). risks are still involved if the fund is not peforming well for a longer period of time and you may need to be able to sit out 3-5 years depending on how risky the chosen investment fund is.

    bobbybo's suggestion is very interesting, especially as the future of the USD/HKD is not very bright and it could happen easily that the purchasing power decreases a lot with your money fixed with traditional saving schemes. some speculate that if one day china is shifting it's huge foreign reserves from USD into EUR and gold, that the dollar would tumble and the HKD with it. the risk is very low, but not zero and that makes pulling out the money any time so interesting. but what's the minimum amount to be invested? is it the 1M to open such an off shore account or less as well?

    another thing: i once saw bonds of the HKG MTR corporation, which are offering coupons of 5% annually, paid semi-annually. i can't exactly remember how much the minimum investment amount was, but i think they started with around HKD 50K-100K already. that's much better than 1M for fixed interest to get max. 4%, but has got of course higher risks as well. in simple terms it could happen in theory that the MTR corp. could go bankrupt, but that's not very likely. there are other risks as well like selling before maturity, but with fixed interest you would have to commit to a certain time period as well. can maybe anyone of you tell me more about these bonds? i did not get into details yet, but it might be interesting for diversification.


  9. #59

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    Quote Originally Posted by coolgirl:
    connecta, you bank with my employer! wow, impressive

    I actually bought a fund with Hang Seng because of that discount. Bought the Merrill Global Allocation Fund which was doing pretty well. Oh well, lost 10% of its value now! My earnings from the BOC IPO didnt compensate for the loss
    coolgirl, you might want to consult with my friend in wealth management (you've met her, remember?) anyway, let me know if you're interested.

  10. #60

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    Quote Originally Posted by Curly:
    0.6% IN REAL TERMS!!! Hmmm, that isn't sounding so hot. I'd have to be the most risk adverse person in HK to take that deal. I also don't think i did the right initial calcs either.

    I'll try again: If i put in 4k/month for 10 years (which earns approx 5%/yr) then i have approx. $504k. But with two bonuses of $150k (whoops, previously said $110k) which the first is paid after 5 years and earns interest, then if i bail out straight after receiving the 10 year benefit, then i'll have $504k + $157k + $150k = $811k. Over ten years i've invested $480k and got back $811k. Roughly approximate to a 59% return which is about 5%/annum. The most important part is that its guaranteed.

    Does anyone know of any other Banks offering the same thing?

    working on these numbers, assuming
    1. monthly you pay 4000 hkd
    2. on the 60th and the 120th month you get back 150k each, total 300k
    3. on the 120th month you get back another 480,000 which is what you have paid over the 10 years.

    to achieve this, the compounding return is 11.1% annually.
    numerically this is not possible if the bank guarantee you risk free.

    rem, they have to pay also your insurance premium on life, disability and job loss.

    so i think either you did not get the numbers correctly, or there are some communication breakdown somewhere.

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