[RastaMan]

Suppose you start with 0 capital, and you are able to put aside HK$30,000 a month. How would you proceed?

Bearing in mind the high charges involved in buying bonds and shares, would you first buy a fund (assuming it has charges of 1%) until you have a sufficiently high amount (say HK$120,000 or so), then selling the fund you have so far and buy bonds or shares of one company? Then repeat the process, and buy funds to the tune of 30,000 a month for 4 months, then sell and buy bonds or shares of another company? Etc?

I don't need the capital for at least a couple of years, and I am unlikely to need it for the next 10 years or so.

Thanks a lot!

[TypeIII]

Well it kinda depends on how old you are, how "liquid" you want your investment to be, and how much risk you'll be willing to take.

If it was up to me, it'll probably be all put into stocks until I'm about $150k to $200k (USD) then I'll start looking into real estate. FYI I am 27, single, no large bills to pay, zero debt, and I have a decent monthly income.

Check out E-Trade, they have pretty low commission if you have a balance of $50k USD or higher, and the min account balance is ridiculously low. But that's, of course, assuming you want to invest in the US market. (that's the only market that I know and am comfortable with)

[philippe]

Originally Posted by RastaMan

Suppose you start with 0 capital, and you are able to put aside HK$30,000 a month. How would you proceed?

Bearing in mind the high charges involved in buying bonds and shares, would you first buy a fund (assuming it has charges of 1%) until you have a sufficiently high amount (say HK$120,000 or so), then selling the fund you have so far and buy bonds or shares of one company? Then repeat the process, and buy funds to the tune of 30,000 a month for 4 months, then sell and buy bonds or shares of another company? Etc?

I don't need the capital for at least a couple of years, and I am unlikely to need it for the next 10 years or so.

Thanks a lot!

Perhaps I should start a FAQ and ask KIA to make it sticky or something.

I have seen a few question like this one and also the other one is about what is good to buy or is company XWZ a good pick.

The thing is we should all have life goals IMHO (unless you are just a life drifter) and your investment goals may be one component of that.

Figure out your investment goals first. Think Big and give it time. For instance you could say "I want to have US$10 Millions in my account by 2020". Next you can look at medium term goals (perhaps US$5 Millions by 2015) and narrow it then to your year plan (what do you need to achieve by the end of 2007?).
Work out how much you can invest per year? Calculate the ROI you need (is 10% enough?), Assess your risk level (i.e. how much are you willing to loose?).

Once all these key questions are answered you may come back here, tell us a bit about your plan and only then some of us might be able to give a proper answer to your question(s).

Good Luck.

[RastaMan]

Thanks a lot.

TypeIII, I would check out E-Trade. The problem is that I have 0 assets right now. I don't have $50k USD or higher. I know that once I have that amount my options will increase. Right now all I have is HK$30,000 a month. What shall I do with these? Once they accumulate to US$50,000 (in one year or so) I will check out E-Trade.

philippe, US$5 Millions by 2015? You mean HK$5 million by 2015? Yes, that would be a good objective.

As for the investment, it's HK$30,000 a month. Risk level is so-so. I don't really want to lose anything, but I know that investment involves risk. I would say 'average attitude towards risk'.

Also, I don't want to spend too much time looking at the market. Say a couple of hours a week would be the maximum I am willing to spend (I have a demanding full time job unrelated to the finance sector).

[TypeIII]

Assuming you want your investment to be liquid, those insurance/savings plans probably won't work out too well for you. And so if you want it to be save and you're ok with low(er) yield why not just do a CD? Another thing is that you don't have to have $50k to start investing with E-Trade. While your commission will be higher w/o a $50k balance, your commission is still only $19.95/trade (I think, you might wanna check out their website).

I only pay attention to the news from the financial sector and maybe take a quick glance at my portfolio once or twice a week to see if there's any major movement. I only seriously think about the allocation of it about once every three to six months depending on how the economy is doing.

Hey, to reach $10M USD w/ $30k HKD/mo is possible. All you need is a roughly 40% annual return!

[RastaMan]

CD as in Certificate of Deposit? It doesn't give you high yield, does it? I bougth a fund pegged to a European stock exchange, with 1% commission, in US$ (I believe from Hang Seng). Last year it gave a yield of 18% or so, so I hope to have something similar this year. My thoughts was to buy more of that fund (partly because of the low commission), until I have enough money to invest in the stock exchange and reduce the commission there. Would that be a good approach?

About E-trade, and other companies like that: how safe are they? Won't they close up and the owner disappear somewhere? I would rather remain with a big bank, if I can.

Also, I was looking at bonds in Euro and Swiss Franks, but apparently HSBC and Hang Seng don't sell them. How come? Where can I buy them in Hong Kong.

Any advise/comment? Thank you very much!

[TypeIII]

18% yield is VERY high, and certainly you can't expect a fund to perform at this level constantly. If there was a fund that would give 18% yield annually and consistently, I'd be able to retire pretty soon.

About E-Trade... Quoted from their website: Roots in online trading since 1983. E*TRADE FINANCIAL is an S&P 500 company. $187 billion in 4.3 million accounts worldwide.

You're probably pretty young, why would you want to invest in bonds?

[RastaMan]

Thanks.

I am not that young .

Yes, I know that I can't expect that sort of performance for long. It's pegged to the stock exchange, so I guess until the stock exchange goes up, it's not such a bad investment?

Bonds: Just because bonds are safer? I am afraid to lose money if I invest in shares. But it's true that I should give it a go. Perhaps I can follow the dogs of the dow rule (that I read on another thread), although I would do it in Europe, as soon as the Euro gets a bit cheaper.

[1K1]

RastaMan
Hi there~ I would suggest you speak to some professional financial advisor. I work in a financial planning company and know that HKD30,000 monthly contribution is not an small amount. You will be surprised how much it can grow with proper management. I totally agree with Type III that a 18% growth is really really high. Should you wish to invest in a fund with that sort of growth, you need to be prepare that it is going to be very volatile. I mean, you have nothing much to loose to have a professional to have a quick meeting with you and tell are your the option. Rather than jumping into the deep end with your hard earn money all on your own ! As long as your portfolio is well diversified, high growth is achievable with less risk with the professionals!

[freeier]

look for some short term money market funds as you accumulate your wealth.
getting your investment planned by a professional might be ok, but the flexibility they have is too little. likely they are going to tell u to put money into mutual funds, which can be quite a bad hit if market start turning down now.

frankly, i have absolutely no idea which way market will go. some people are saying its going up, but more people are saying its coming down. yet the indices are inching up every other day. rarely you see all asset classes moving up together. so it could be quite a big divergence coming up. not sure which one will correct though.