Investment options

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  1. #1

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    Investment options

    I recently sold off some lacklustre US tech stocks I foolishly bought some years ago and want to shift to a less ambitious, lower-maintenance style of investing.

    I want to do better than a 5% time deposit return, but with less risk than a holding a mostly equities-based portfolio.

    I'm sitting on a sum of US dollars and getting a headache trying to figure out how to take into account USD depreciation, theories about asset bubbles bursting, de-pegging of the HKD, etc. etc.

    Are there funds out there that offer stable returns in light of all these risks?

    My bank advisor (who seems about 20 years old) suggested that I buy several balanced funds, bond funds and also invest short-term in a China fund, since they have a positive view of China until the 2008 Olympics. Is this sensible advice???


  2. #2

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    With due respect, it is not prudent to ask for investment advice in public forum unless you do a full & complete disclosure (risk tolerence, amount of time you are willing to spend for research, age profile, tax situation etc etc)

    Considering your following comment - "Are there funds out there that offer stable returns in light of all these risks?"

    I am sure the 20 year old will do a better job.


  3. #3

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    Didn't expect such a snarky reply. I was just looking for general suggestions as a starting point to consider my options, thus I did not make the full & complete disclosure as you put it.

    I thought it was fairly clear that I am willing to accept a moderate level of risk and I said I was looking for lower maintenance investments , which means that I don't wish to spend a great deal of time on research. My investment horizon is long-term (ie, 10+ years) and I'm residing in HK for the foreseeable future.


  4. #4

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    For 10+ years just stick in in index trackers. Historically no investment managers can beat the indexes consistently over that timespan. The Dow or the FTSE will make you 10% or so provided that you have some flexibility over when you cash up to avoid any temporary short-term downturns.


  5. #5

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    No offence was meant.

    I would put 80% of my investment funds as prescribed by the advisor and play with the rest 20%. Track your performance after a year and make the necessary changes.

    I will read following two books to start:

    1) A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, by Burton G. Malkiel

    2) The Best Investment Advice I Ever Received: by Liz Claman

    If you don't like dense reading, then any of the Jim Cramer's books will be good to ground your intuition.


  6. #6

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    PDLM - What's the best way for a HK-based investor to track the DOW or FTSE indices?

    I do allocate an amount to the Tracker Fund in a monthly investment plan, but now that I'm dealing with a substantial lump sum, I'm rather worried about market timing.

    Last edited by ballon; 27-02-2007 at 02:09 AM.

  7. #7

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    Quote Originally Posted by ballon:
    PDLM - What's the best way for a HK-based investor to track the DOW or FTSE indices?
    To be honest I'm not sure what the "best" way is to do it. Personally I have an Isle of Man based fund of funds which gives me access to many things including FTSE and DOW trackers.

  8. #8

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    HR-I've been playing around with stocks the last few years with lousy results. I'm drawn to risky stocks but don't have the time or discipline to track my holdings and sell the losers.

    I have a growth-oriented monthly investment plan, but I want to move the money I had in individual stocks into more conservative/stable investments.

    All I got from my bank relationship manager were three fund fact sheets and some theory about the Olympics, without an explanation as to why putting money in these particular funds (as opposed to buying bonds or indexing) is most suited to my objectives. For this I'm supposed to pay a 2.5% front-end charge and trust that there was sound reasoning behind his recommendations.

    I don't think I have the min. funds necessary to go with a more capable private banker, so where does someone in my position turn to for advice? There's a lot of personal investing information for US investors on the web, but nothing much for Hong Kong based investors.


  9. #9

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    well, find an independent one where you pay the person a lumpsum (maybe like 3000~5000hkd) and they do a full financial review for you. you might then need to do periodical reviews.

    HR > is jim cramer so highly regarded ? i do read some of his stuffs when it float out from thestreet.com, but i was just asking myself this question :"how well is he regarded in the states?"


  10. #10

    As discussed elsewhere on this forum, funds of any kind (with one or two exceptions such as a commodities or gold fund) seem a very poor investment in the current economic climate. Just a moment of logical thinking is enough to realize that you don?t really want to be investing in something where the price is at record highs, which is the case with many stock markets around the world. Add to that, even during this current unprecedented bull market, if you had invested a few years back, I read an article the other day which said that the majority of fund managers fail to beat a simple index tracker fund, which makes you wonder what the hell these overpaid managers are paid for.

    Save yourself the bother of trying to figure out what to invest in and just buy gold. Although it has had a good run recently, it?s only really just getting started if we look longer term, say 10 years. If you pay attention to the news, you will realise that there is a constant stream of news about the cost of this and that rising in price, which probably chimes with your own experience. If you piece it together, you will realize that inflation is gradually spiralling out of control, nothing like the rosy economic picture painted by govt and most pundits. Interest rates are going to rise dramatically and there?ll be an awful lot of pain in the coming year or two.

    Buying gold is as simple as ordering something from Amazon. Ideally, the best way to buy it is to physically buy gold coins and stash it away somewhere safe but because of security issues, you might want to consider holding some gold shares as well. Take a look at these two links. For physical gold: http://www.taxfreegold.co.uk/ For gold shares: http://streettracksgoldshares.com/

    Gold has pretty much an inverse correlation to the US dollar. Get this straight: you?re chasing a few % point return on your portfolio while the dollar value of that portfolio has lost 40-50% buying power in the last 5 years alone, and will continue to do so because of the Mickey Mouse inflationary monetary policies adopted by the US govt (and virtually every govt in the world). Which leaves gold with only one direction to go. You hear from some pundits about gold hitting $1000, but imo, if we were to see a 1929 style crash (which is inevitable over time), coupled with the very real threats of world wars, rising terrorism, bird flu, the looming energy crisis and so on, and if panic buying hit gold and it appreciated the 2000+% it did in the 1970s, then we might see it hit over $6000 and beyond; in no way implausible. That?s when physical gold comes into its own as paper money goes off into la-la territory. In the 1930s, there were signs outside shops that read: No money? No problem. We take anything.

    You are good to buy gold until the day mainstream media and your taxi driver discuss the relative merits of kruggerands vs sovereigns, or something like that, which won't be anytime soon. Start accumulating now.


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