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The Financial Benefits of Being an
Expat...benjamin franklin style
Every week in this article Helen Couldrey, a financial
consultant with the deVere Group, and also a qualified
English lawyer, will give you tips and ideas of how to
take advantage financially of being an expat. Helen has
clients in Bangkok, Hua Hin and Cha-Am who she helps
to maximise the financial benefits of living overseas.
CHA-AM AND HUA HIN
Retirement Planning - Education Fee Planning
Regular Savings - Tax Saving
Lump Sum Investments
Helen Couldrey, BA (Hons), L.L.B, CISI
Contact Helen for a finance review
086 088 2127
[email protected]
Railways through Africa,
Dams across the Nile, Ships?
For those of us who have seen the classic Disney film,
Mary Poppins, you may recall an enchanting little song
called ‘Fidelity Fiduciary Bank’. In the song, Mr Banks
encourages his son, Michael, to invest his money safely
in the bank.
“If you invest your tuppence wisely in the bank… Safe
and sound
Soon that tuppence safely invested in the bank…Will
compound…”
The song talks about all the wonderful things that
Michael’s tuppence could be invested into. You see,
Michael, you’ll be part of railways through Africa…
Dams across the Nile… Ships!”. Similar to us all,
making decisions about where to put our cash is
difficult, whether it be a tuppence or something more
substantial. Here, I briefly reflect on some investments
that Michael may want to avoid, if he were investing
his money today.
GOLD. According to Bloomberg, some of the worst
performing investments in 2013 were related to gold
companies. In 2013, owning a share in a gold mine was
not the way to make money, as demonstrated by the
second largest gold producer in the world, Newmont
Mining, which was down 47%, (mainly due to staff
restructuring). One of the worst performing mutual
funds was a gold fund that also down by a stonking
49%.
CORN.
Trading on the Chicago Board of Trade (CBOT), corn
came in as one of the worst performing commodities.
This was due to various factors, one being increased
supply for the US following a record harvest. Basic
supply and demand rules helped to dictate a downward
price movement.
CURRENCY.
Well, not all currencies, but some of them. There were
a few bad performers during 2013. With the South
African Rand falling by around 17%, this was one of
them. The Japanese Yen also had a bit of a tough time.
One if the better performers in 2013 was the British
Pound, luckily for Michael Banks.
LITIGATION FUNDS.
For example, it is purported that little due diligence
was done in relation to the Axiom fund, a fund which
invested into law firms. According to Axiom Legal
Financing Fund investor literature, the fund was
promoted as “an alternative uncorrelated, open-ended
investment fund that provides short-term finance to
UK law firms”. The fund was suspended in October
2012.
INVESTING TIPS
Of course I am not suggesting that all of the above
genres of investments are to avoid completely. Times
change and individual companies or funds within
those genres may be prosperous. However, as always:
• The number one rule is diversification. Don’t invest
all of your money into one fund only. It’s safe to
have one reputable financial adviser or mutual fund
company managing all of your money, but only as
long as they diversify your portfolio. One who fails
to do so is not doing their job effectively.
• Set your parameters. Decide how much you can
potentially risk and only put small proportions of
your money into high risk investments.
• Do your homework. Read about the companies
and funds that you invest into and their general
financial position.
• And keep some of your money in investments
that have high liquidity. Tying all of your money
into inaccessible investments is never advisable,
especially in the event of an emergency.
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