Financial Advice Sought
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RichLB
Financial Advice Sought
I have a middle aged Thai friend who is holding more than 1,000,000 baht in cash in a bank. The bank manager called him in for a meeting and pushed an investment which paid far more than the interest a passbook account pays. I think it was a life insurance policy, but while I listened to her pitch (which was in Thai), I got completely confused and unable to offer any advice to my friend. We left without making a decision, but my friend would like to do something more productive with his funds. He is not interested in real estate or starting a business, just a sound investment strategy. Any advice?
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travelerjim
Re: Financial Advice Sought
Stay away from life insurance... it's a money maker for the bank and their bankers pushing it.
Stay with fixed interest bank accounts..
Stay out of the stock and bonds market.
Same for real estate...
The future financial pictures are mixed IMHO.
Better to have principal guaranteed vs loss prospects.
Just my two cents of advice.
Good luck!
Tj
Stay with fixed interest bank accounts..
Stay out of the stock and bonds market.
Same for real estate...
The future financial pictures are mixed IMHO.
Better to have principal guaranteed vs loss prospects.
Just my two cents of advice.
Good luck!
Tj
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Jun
Re: Financial Advice Sought
1 Never invest in anything you don't understand (at least partially)
Whatever your friend is investing in, he should at least understand:
(i) What the money is actually invested in
(ii) What the total fees are
(iii) If he is paying for active management, what is their long term record ?
I guess they are trying to sell him some kind of policy with poor transparency & high fees, which is why the bank was so keen to push it.
Your friend should already have received information to explain (i) and (ii) in writing.
If the total fees are (say) 2.5% a year, then after 20 years, the bank has 40% of the money and he has 60%. Normally you want to target much lower fees. He should understand the long term effect of fees.
2 If he has a long term investing horizon AND can accept that stocks tend to outperform over the long term, but may have large drawdowns during that period, he should consider some stocks. Possibly a low cost index tracker if he is not going to spend time researching the options.
He definitely needs to have the mindset to invest for the long term & sit tight if the stock market falls by 50% next year. Ideally, he would be investing something every year and if the stock market DID fall by 50%, buy more than in a normal year.
Whatever your friend is investing in, he should at least understand:
(i) What the money is actually invested in
(ii) What the total fees are
(iii) If he is paying for active management, what is their long term record ?
I guess they are trying to sell him some kind of policy with poor transparency & high fees, which is why the bank was so keen to push it.
Your friend should already have received information to explain (i) and (ii) in writing.
If the total fees are (say) 2.5% a year, then after 20 years, the bank has 40% of the money and he has 60%. Normally you want to target much lower fees. He should understand the long term effect of fees.
2 If he has a long term investing horizon AND can accept that stocks tend to outperform over the long term, but may have large drawdowns during that period, he should consider some stocks. Possibly a low cost index tracker if he is not going to spend time researching the options.
He definitely needs to have the mindset to invest for the long term & sit tight if the stock market falls by 50% next year. Ideally, he would be investing something every year and if the stock market DID fall by 50%, buy more than in a normal year.