How to invest 1 million bucks?

[pinko]

Talk to your bank. If they cannot help you, how can a forum?

Unless you have a few million bucks and get to talk to a financial adviser who actually knows something, banks just wants to sell funds, which as a rule UNDER PERFORM the index and have charges of 5%.

That's not exactly what I call "a wise investment".

Thanks DPLM and whong. Any more suggestion?

[chimo]

Unless you have a few million bucks and get to talk to a financial adviser who actually knows something, banks just wants to sell funds, which as a rule UNDER PERFORM the index and have charges of 5%.

That's not exactly what I call "a wise investment".

Thanks DPLM and whong. Any more suggestion?

Sounds like you want something for nothing! There is no magic answer. Generally, the greater the risk the greater the reward. If you want zero risk do a fixed deposit, but you will actually lose on inflation. If you want minimal risk invest in HSBC. At the worst you will get the 5% annual dividend. Medium risk then invest in an index fund or mainland banks (I like bank of china and ICBC, 3988.HK and 1398.HK respectively). For high risk pick petrochina or sinopec (0857.HK and 0386.HK).

You seems like a nervous low risk person, so invest accordingly.

[dezza]

If you don't like high fees from mutual funds, you should look into ETFs. Lyxor just launched 5 new ones and there are i think around 15-20 total you could invest in, all with annual fees less than 1% and they trade like stocks but with the diversification.

India, Emerging Markets, China, HK, Korea, Russia, commodities, it's a great list and over the long term (5 years or more) you will come out laughing after this messy short term market.

[Oldtimer]

Originally Posted by Pinko:
"Unless you have a few million bucks and get to talk to a financial adviser who actually knows something"

I doubt there are any such angels in Hong Kong.
If you have followed the local papers,
you know how the big banks and their highly paid so called Financial Advisers steered their clients to Accumulators and other derivatives, where the clients have lost their shirt.

Equity performs better over a long period.
Time to buy Equity is when there is blood on the street.

[desmondng]

I worked in the bank before. No matter where you go, like insurance company, bank(private bank), or IFA, they are just chasing the commission. So you don't need to waste too much time on finding one. The whole system won't make a good deal for you. It's not the fault of those small potatoes working in these companies, it's the "order" made by their boss to "push" the products to you. As what u said, u are not planning to invest in any funds and want to keep it "safe", not many things you can do. I no longer work in the industry in Hong Kong anymore 'cause I don't like the "players" in the this field in Hong Kong. I only do it by myself and help people other than those living in Hong Kong to handle their portfolios. Nothing I can help you though.

[jasonwong]

Let's do some eliminations:

Property - out, stamp and liquidity (lack of) make it a bad asset class

Stocks - out, amageden still coming up esp after half-year company reporting

Bonds - out, interest going up

Cash - honestly not a bad idea if not for the inflation

Well, I am putting my money actually in some alternative exposures such as environment-themed products, commodity...

[pinko]

Thanks. Any more details?

I am actually thinking of a hedge fund. I have been PMed by someone who recommended a MAN hedge fund sold by the bank where he works (ING), and it makes sense. Revenue is 14% pa on average over the last 10 years, including in the last 12 months.

[whong]

Jason! commodity is a no-brainer at the moment. unfortunately, when will the speculators pull back and take the profits?? that would be a million dollar question.

sound easy... just to diversify investments now... but it all depends on how much risks the investors are willing to take.

pinko: another pick... gold... try to buy w/ different entry points. hedge funds is also good, but watch out for the commission fee... again, there is no free lunch out there. GOOD LUCK!!

Let's do some eliminations:

Property - out, stamp and liquidity (lack of) make it a bad asset class

Stocks - out, amageden still coming up esp after half-year company reporting

Bonds - out, interest going up

Cash - honestly not a bad idea if not for the inflation

Well, I am putting my money actually in some alternative exposures such as environment-themed products, commodity...

[jasonwong]

Jason! commodity is a no-brainer at the moment. unfortunately, when will the speculators pull back and take the profits?? that would be a million dollar question.

sound easy... just to diversify investments now... but it all depends on how much risks the investors are willing to take.

pinko: another pick... gold... try to buy w/ different entry points. hedge funds is also good, but watch out for the commission fee... again, there is no free lunch out there. GOOD LUCK!!

Thanks whong... my strategy is to accumulate cash at the moment (while hedged against inflation) and go all out when the market has tanked further ..

[pinko]

Thanks.

As for the fees: "This fund is a back end charge fund (ie no intial subscription charge) but a redemption charge within 6 years. 4% in Year 1 & 2, 2.5% in Year 3 & 4, 1% in Year 5 & 6, nil from Year 7 and onwards. There is management, trustee & custodian fee but these charges already reflected in the weekly fund price. For example, when you invest US$30,000 initially, all this amount will directly purchase units but if you decided to redeem this fund in the 1st year, they'll deduct 4% from your account value 1st before releasing the amount back to you."

So clearly it's not a fund for the short-term. I should keep it at least 3 years, but I don't expect to need the money within the next 3 years.