Connect with us


Be on the lookout for dubious investments



PHUKET: Many readers responded to the recent article “Retirement is all about safety first” (story here). Many could relate to the common pitfalls that expats have discovered in Thailand. While investing in a bar or restaurant is typically a losing proposition, at least the foreigner would still have a place to eat and drink.

Where things take a really ugly turn is when retirees get burned on insurance-linked investment sales products and bad investments. Last week a reader reported the latest scandal involving the LM First Mortgage Income Fund and the LM Managed Performance Fund. Investors were told their investments were secure and backed by mortgages on Australian real estate. Investors got returns that were slightly above market rates and appealed to retirees looking for a steady income in retirement.

Now LM Investment Management has collapsed. What’s most alarming is that the agents who sold these investments have earned their commissions and moved on. Those who invested in the fund are left wondering what to do. What was pitched as a safe investment has turned into a nightmare. One caller said that the unit-linked life assurance company (Friends Provident), which was involved in selling the fraudulent fund, is still charging him 1.5% on his original investment, which is now worth nothing.

What happened was that the sales agents for LM Investment Management were paid up front commissions to get clients – typically 5-9% of the amount invested. There was quite a bit of incentive to tell clients whatever they needed to hear to get them to invest. And what was pitched is what investors all want to hear – steady appreciation, safety, regular payouts and so on.

As a matter of fact, no one can guarantee that. There is no guaranteed investment. The stock market goes up and down. The best an investor can do is diversify and buy quality stocks and Exchange-Traded Funds (ETFs) that trade on the US New York Stock Exchange (NYSE) or Nasdaq; that are regulated by the Securities and Exchange Commission; and that have a long-term outlook.

One good recommendation is Vanguard. Vanguard is the world’s largest fund company, with about US$2.4 trillion invested in the US across more than 170 different funds.

One Vanguard fund of particular note is the Vanguard REIT ETF. This fund invests in US real estate investment trusts that own office buildings, hotels and other properties.

The Vanguard REIT ETF was formed in 2004 and today has US$44.1 billion (1.4 trillion baht) in assets. If US$10k (319k baht) were invested at inception in 2004, you would have US$23,978 (765,857 baht) today – that’s an annual return of 9.29% over the past 10 years. Currently, this fund pays a dividend of 3.7%. At the time this article went to print, no Vanguard fund in the past 10 years had gone bust.

Vanguard has 123 mutual funds and 52 diversified ETFs as of August 2014. All their funds trade on the NYSE or Nasdaq and the mutual funds are open-ended regulated by the US Investment Act of 1940.

The only risk to investing in Vanguard is normal market fluctuations. Can an investment lose value? Of course it can. Back in 2008 during the financial crisis, US$10k invested in 2004 was down to US$6,114.07 (195,283 baht). Had an investor ridden the downturn and held on, the stock would be worth almost US$24k (766,560 baht) today. That’s the nature of capitalism and markets.

The key is to invest money not needed tomorrow. Investors need to have seven to 10 years to invest appropriately in the stock market. If an investor does not have this length of time to commit to an investment, then the stock market probably isn’t for him.

Don Freeman is president of Freeman Capital Management, a Registered Investment Adviser with the US Securities Exchange Commission (SEC), based in Thailand. He has over 15 years experience and provides personal financial planning and wealth management to expatriates. Specializing in UK and US pension transfers. Call 089-970 5795 or email:

— Don Freeman


Get more from The Thaiger

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

World Cup37 mins ago

World cup to be shown in Thai prison

Economy1 hour ago

UK exports to Japan slump after ‘landmark’ free trade deal

Thailand2 hours ago

Try These Weird Thai Foods… If You Dare

Sponsored2 days ago

Where you can get cannabis in Bangkok

World20 hours ago

Thai gangs traffic Kenyans to Myanmar scam factories

South21 hours ago

Deep South emergency decree extended 3 months

Thailand21 hours ago

Why Is Thailand So Cheap?

Join the conversation on the Thaiger Talk forums today!
Expats22 hours ago

Phuket’s 5 best golf courses

Crime22 hours ago

Inmate who escaped Khon Kaen hospital back in custody

Coronavirus (Covid-19)23 hours ago

Masks recommended in crowds amid Covid increase

Crime1 day ago

Squabbling beach vendor gives rival a single bullet warning

Tourism1 day ago

Russian invasion takes Thailand’s tourism forces by surprise

Road deaths1 day ago

Late night drinking hopes dashed by Alcohol Control Committee

Thailand1 day ago

Why Pattaya? Is Pattaya worth visiting in 2023?

Transport1 day ago

Thai Airways appoint new CEO

Crime1 day ago

Private jet in ‘Tuhao’ case still flying free

Thailand1 year ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand2 years ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism2 years ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket2 years ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism2 years ago

Phuket Thai food treats you need to try | VIDEO

Thailand2 years ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism2 years ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand2 years ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand2 years ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand2 years ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand2 years ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand2 years ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand2 years ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand2 years ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand2 years ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11