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Finance: The perfect investment for retirees

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Finance: The perfect investment for retirees | The Thaiger
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PHUKET: The headlines for the past few weeks have not been pleasant. Stocks have been dropping, oil crashed and if that wasn’t bad enough we had the Ebola crisis. When news like this hits, some people want to run and hide, but I look at it as an opportunity to put money to work. I never invest 100% of my money and like to have cash set to one side for when an opportunity presents itself.

Now most people don’t realize this, but the US is the largest energy producer in the world. This year, it eclipsed both Saudi Arabia and Russia as the top producer of both crude oil and natural gas. The US now produces over 11 million barrels of oil per day. This is one of the reasons why oil prices have dropped from over US$100 to US$80. The fact is that the world is awash in oil. With so much oil out there, there’s no need for high oil prices.

However, as oil prices drop, that’s bad news for oil companies. This means that they are now getting less money for every barrel of crude oil that they sell. And that’s precisely why I’m staying away from oil companies.

Instead, I’m focusing on energy infrastructure companies. These are the companies that run the “toll-roads” that connect the crude oil straight out of the ground to the refineries that refine it, to the pipelines that transport the finished product.

Right now, my clients and I are buying into the Alerian MLP ETF and this is being added to my long-term ETF portfolio. I see this ETF as the best way to capitalize on the energy boom in the US.

The Alerian MLP ETF comprises the companies that own these assets. As oil supplies increase, more pipelines, storage tanks, and processing centers are required to connect oil reserves to industrial regions. Over the next 25 years, an estimated US$250 billion will be spent on energy infrastructure.

The best part about energy infrastructure assets is that they are not dependent on the price of oil. Instead, their business model is based on volume, not on the price of oil or natural gas. This is why the Alerian MLP ETF is so attractive.

The other thing I like about energy infrastructure assets is that they are their own monopoly. In other words, once a pipeline is built there won’t be another pipeline built right alongside it. As a lot of folks in the US know, getting approval for pipelines is not easy. The largest pipeline planned in northern Amercia, the Keystone XL, which would bring crude oil from Canada to the Gulf of Mexico, remains bogged down in political wrangling between Republicans and Democrats.

For retirees, the Alerian MLP ETF is perfect because it provides inflation protection. There’s nothing better than owning real assets like pipelines, storage tanks and processing centers. The income that investors get is driven by the stable cash flows that these assets generate. These assets don’t care what the stock or bond markets are doing, they make money regardless.

Since the Alerian MLP ETF was formed in August 2010, it has delivered a 12.71% annual return to investors. Had you invested US$10,000 at inception, you would have US$16,338 today.

The Alerian MLP ETF has over US$9bn in assets and its top holdings include the premier energy infrastructure companies in the US. By buying the Alerian MLP ETF, one holds interests in MLPs such as Kinder Morgan Energy Partners, Enterprise Products Partners, and Energy Transfer Partners. One could buy these individually, but in point of fact the Alerian MLP ETF does all of that for you and gives you much broader diversification. Altogether, the Alerian MLP ETF has 25 energy infrastructure MLPs in its portfolio.

For US investors, there are no K-1s or complicated tax reporting documents and there is no leverage. This is important and gives one peace of mind. That’s why in today’s market, with fear starting to rear its ugly head, I see the Alerian MLP ETF as a great place to park some money. It’s certainly a much better investment than gold and one that pays you a regular quarterly dividend. Now, that’s what I call sleeping better at night.

Don Freeman is president of Freeman Capital Management, an independent US Registered Investment Advisor. He has over 20 years’ experience and provides personal financial planning and wealth management to expatriates living in Phuket. Specializing in UK and US pension transfers.
Call 089-970-5795 or email: freemancapital@gmail.com

— Don Freeman

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Governments & old media versus social media – who will win? | VIDEO

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Governments & old media versus social media – who will win? | VIDEO | The Thaiger

We look at the recent changes made by the Australian and Indian governments to except control over the world’s biggest social media platforms. India has issued strict new rules for Facebook, Twitter and other social media platforms just weeks after the Indian government attempted to pressure Twitter to take down social media accounts it deemed, well, anti social. There is now an open battle between the rise of social media platforms and the governments and ‘old’ media that have been able to maintain a certain level of control over the ‘message’ for the last century. Who will win?

The rules require any social media company to create three roles within India… a “compliance officer” who ensures they follow local laws; a “grievance officer” who addresses complaints from Indian social media users; and a “contact person” who can actually be contacted by lawyers and other aggrieved Indian parties… 24/7.

The democratisation of the news model, with social media as its catalyst, will continue to baffle traditional media and governments who used to enjoy a level of control over what stories get told. The battles of Google and Facebook, with the governments of India and Australia will be followed in plenty of other countries as well.

At the root of all discussions will be the difference between what governments THINK social media is all about and the reality about how quickly the media landscape has changed. You’ll get to read about it first, on a social media platform… probably on the screen you’re watching this news story right now.

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The social media giants in battle with ‘old’ media and world governments | VIDEO

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The social media giants in battle with ‘old’ media and world governments | VIDEO | The Thaiger

“The rules signal greater willingness by countries around the world to rein in big tech firms such as Google, Facebook and Twitter that the governments fear have become too powerful with little accountability.”

India has issued strict new rules for Facebook, Twitter and other social media platforms just weeks after the Indian government attempted to pressure Twitter to take down social media accounts it deemed, well, anti social.

The rules require any social media company to create three roles within India… a “compliance officer” who ensures they follow local laws; a “grievance officer” who addresses complaints from Indian social media users; and a “contact person” who can actually be contacted by lawyers and other aggrieved Indian parties… 24/7.

The companies are also being made to publish a compliance report each month with details about how many complaints they’ve received and the action they took.

They’ll also be required to remove ‘some’ types of content including “full or partial nudity,” any “sexual act” or “impersonations including morphed images”

The democratisation of the news model, with social media as its catalyst, will continue to baffle traditional media and governments who used to enjoy a level of control over what stories get told.

The battles of Google and Facebook, with the governments of India and Australia will be followed in plenty of other countries as well.

At the root of all discussions will be the difference between what governments THINK social media is all about and the reality about how quickly the media landscape has changed. You’ll get to read about it first, on a social media platform… probably on the screen you’re watching this news story right now.

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Turbulence ahead for Thailand’s aviation industry | VIDEO

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Turbulence ahead for Thailand’s aviation industry | VIDEO | The Thaiger

When the airlines, in particular, were asking the government to put their hands in their pockets for some relief funding in August last year, it was genuinely thought that international tourists would be coming back for the high season in December and January. At the very least local tourists and expats would head back to the skies over the traditional holiday break. And surely the Chinese would be back for Chinese New Year?

As we know now, none of that happened. A resurge in cases started just south of Bangkok on December 20 last year, just before Christmas, kicking off another round of restrictions, pretty much killing off any possibility of a high season ‘bump’ for the tourist industry. Airlines slashed flights from their schedule, and hotels, which had dusted off their reception desks for the surge of tourists, shut their doors again.

Domestically, the hotel business saw 6 million room nights in the government’s latest stimulus campaign fully redeemed. But the air ticket quota of 2 million seats still has over 1.3 million seats unused. Local tourists mostly skipped flights and opted for destinations within driving distance of their homes.

As for international tourism… well that still seems months or years away, even now.

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