Investment advice for a beginner

[migao]

Hi there, I'm admittedly a novice in HK market, and would appreciate some advice about how to invest in stocks and funds here.

Here are some of the many things I'm wondering... I know, I probably should get some professional advice on these:

1) If I invest in funds through HSBC, even if I was a Premier customer I would still loose about 7-8% the same day that I buy the fund, as they typically have about 5% spread between buy/sell prices and then you need to pay fee of 5% on top of that, of which you get half off if you're a Premier customer => hence you loose 7.5%. Not a nice start for an investment?

2) If I would build my own portfolio while based in HK, my experience is quite limited and as HSBC customer I would easily fall to have my investment account at HSBC, not least because I'm used to their online service. Is this wise, or is it more advisable to open your investment account somewhere else?

3) As HSBC customer I've learned that I can buy stock in HSE, LSE and NYSE. But what comes to stocks in LSE and NYSE they leave me on my own what comes to tax. How much do I need to pay tax for dividends and especially sales profits for, say, U.S. stocks and UK stocks?

4) Then what comes to investing in HKSE, I'm mostly wondering where can I get decent information about the companies (listed in HKSE). I can get real time (or almost real-time) quotes and history share price data from HSBC and Yahoo, I can get some P/E figures from SCMP print edition but that's about it, is there any free/reasonably priced online resource - Chinese or English - that would have more thorough data and analysis about the companies in HSE?

5) Now that there seem to be quite many stocks with very high valuations, I had one more question, is it possible to sell short (HKSE stocks) through HSBC, or do I need to go elsewhere for that?

Thanks in advance... even small advice to above would be very helpful.

[bascom]

Hi there...
I have a few years of investing experience, though not particularly successful.
I didn't know that you could purchase US-listed stocks through a local HSBC
investment account. I opened a TD Ameritrade account and wired funds to it, and have used this for US trades. As a non-US resident, you have to complete a W8-BEN form to be exempt from withholding tax and it gets to be a hassle because you have to complete and return a supplementary form every year. Dividends are taxed, so I generally seek stocks that don't pay dividends (that said, my US stock picks have performed so poorly that I've almost written them off).

Personal investing is quite a challenge here as there aren't many sound information resources for a novice. People seem to be more interested in speculation, IPOs and the like. Financial advisors at consumer banks are practically useless. In the US, a low-maintenance moderate risk investor like myself would diversify into various index funds or funds with reasonable management fees.

I'd be happy to learn more about the comparable products available here. Even the index funds I've come across, like my HSBC MPF investment seems to have an excessive management fee.

[KnowItAll]

Dollar cost average every month on blue chip tech, energy (both oil and alternative) and a couple of weapons manufacturers / defense suppliers. If you want to get more diverse look for "fast-ish food" companies like Starbucks or a profitable medical company that is in the business of heart attack, depression, old age related medicines.

Does that sound too cynical?

(Ok .. don't take my advice that seriously.. but look for the most basic needs if you're looking long term)

[freeier]

1. i think the bid-offer spread takes into account the 5% sales charge. so you are not paying 7.5% but just 2.5%. that said, it is still alot... but again, if u have a decent advisor that's how u need to pay his ricebowl...

2. i think if you are not US citizen, you just need to fill up a form and they wld let give you back the withholding taxes. else the brokerage partner wld withhold your tax and that's that. doubt anything more.

other than that. i don't use hsbc and have no idea how they operate. but from what i heard they are just as good as the jockey club punting house, nothing i'd consider an investment house. 8-)
my brokerage is still from singapore and i buy shares from there. worldwide shares.

[migao]

Thanks Bascom, KIA and Freeier for useful advise and comments.

That U.S. tax clearing process sounds a bit scary, I tend to fail such paperwork if its upto myself to handle and might thus become costly...

Good quick stock investing principle from KIA at least looking at the back mirror; I would add that the companies should not be overpriced, they should be able to generate profitable growth, and they should have good management reputation.

Shame that there is no proper information about the companies in HKSE. So this bonanza about HK to become a major Financial center seems to be premature, eh...?

And yup, Freeier, you may be right about the sales charge being included that bid/offer spread, will check asap and let you know... if so then I'm much more keen on investing in U.S. and Europe through some carefully selected funds.

Hmmm... my wife is local and is quite satisfied with the HSBC Premier advisor we have, I have never met her yet F2F, cannot comment. But surely some real broker may be more professional, these advisors at the HSBC branches don't have the right people around them to grow to the job. But what brokers should I try? No feeling/experience about these here...?