Connect with us

Business

How Phuket expats can cut their investment costs

Legacy Phuket Gazette

Published

 on 

PHUKET: If you are like many expatriates in Phuket, or indeed across Thailand, you have probably failed to realize the impact trading or investment fees can have on your portfolio’s return, as such costs are often hidden and can quickly add up over time.

In a rising market, these costs may not be so noticeable; but in a stagnant or falling stock market, they may quickly become very apparent. With that in mind, here are a few ways you can cut your investment costs in order to boost your investment returns.

Consider all of your investing costs

Trading is only one investment cost you must deal with, and even trading fees can vary considerably, as some investment products come with large front-end or back-end loads, or both. Other fees you might encounter when investing include annual fund expenses; custodian/account fees; advisory fees; FOREX transaction charges and bid-ask spreads, with the later being particularly hard to evaluate as a lousy spread can quickly increase your trading costs.

Remember, there are some investment fees that can’t be avoided, but there are also plenty of other fees that can be minimized or completely avoided – so long as you are made aware of them before you invest. That’s why it’s critical for your financial adviser to be transparent about all of your fees. If he or she isn’t being completely transparent, then find someone who is.

Invest in ETFs rather than expat target products

Many ETFs have no extra commissions beyond normal transaction costs and have average annual expenses of just 0.49%, while the average stock mutual fund will cost investors around 1.57% in annual fees. However, many managed funds or offshore investment products targeted for expats come with high upfront fees (often 5% or more), annual fees of around 2% and a sales commission when they are sold. When these high fees are combined with taxes, inflation and currency fluctuations, you might be left with little to no return at all on your money.

Buy and hold rather than trade

Even if you are investing in low cost products like ETFs with a discount broker, the best way to reward your broker rather than yourself, is to trade frequently, as trading will generate commissions. You should only trade when changes in your personal situation, market conditions or the value of an investment calls for changes in your portfolio’s investment
allocation. Otherwise, a general portfolio review each quarter and around the beginning of the year should be sufficient for making necessary portfolio adjustments.

Limit FOREX transactions

As with frequent trading, moving in and out of currencies can be both costly and unnecessary. Ideally, you should use the currency of the country or countries you hold citizenship of as a base currency for your investments, and invest only in products that transact in your base currency (for example, for Americans, an ETF listed on the NYSE) to gain exposure to other currencies or markets.

Consolidate your accounts

While having multiple financial accounts may seem like a good way to spread your financial risk around, it likely means you won’t have economies of scale with any single financial institution. After all, the larger your account balance is with one financial institution, the more interested they will be in servicing your account and keeping you happy as a client by offering lower investment and trading fees. They may also be able to offer you investment products not available to clients with lower account balances.

Use tax deferred or tax exempt accounts

If you are an American, tax deferred or tax exempt accounts will often be your best choice to hold all of your investments, since you are taxed on your worldwide income, while the use of offshore investments will draw more scrutiny from tax authorities or is simply not allowed. If you are a citizen of another country, it would be wise to consult an expert in your country’s tax matters to determine what the best tax structure for your investments would be.

Don Freeman is president of Freeman Capital Management, a Registered Investment Adviser with the US Securities Exchange Commission (SEC), based in Phuket, 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: freemancapital@gmail.com.

— Don Freeman

 

Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forums
🔔 Subscribe to our daily email newsletter
📺 Subscribe / Join YouTube for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram

image

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

Leave a Reply

Your email address will not be published. Required fields are marked *

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

Follow Thaiger by email:

Coronavirus (Covid-19)40 mins ago

Thai Red Cross order of 5 million Moderna vaccines in proccess

Bangkok2 hours ago

Peaceful pro-democracy protests in Bangkok by Taloo-Fah

Coronavirus (Covid-19)3 hours ago

Kanchanaburi prison builds field hospital for 379 Covid-19 cases

Welcome back to Thailand!

Thaiger is getting behind local businesses for the restart of tourism in Thailand - up to 50% discounts across all advertising packages!

Coronavirus (Covid-19)4 hours ago

Covid-19 train sends 1,490 infected from Bangkok to hometowns

Thailand5 hours ago

Covid-19 Poll: People trust doctors, social media, 85% confused.

Coronavirus (Covid-19)9 hours ago

Record high as Chon Buri hits nearly 800 Covid-19 infections

image
Join the conversation on the Thaiger Talk forums today!
Coronavirus (Covid-19)9 hours ago

Covid outbreak closes Nakhon Si Thammarat rubberwood processing factory

Thailand10 hours ago

Nearly 600 temples now offering free cremation services

Thailand10 hours ago

Phetchabun chicken processing plant sees over 3,000 infections

Phuket10 hours ago

New Covid-19 infections drop, still worrisome for Phuket Sandbox

Phuket11 hours ago

Phuket “car mob” protest demands the removal of PM, calls for mRNA vaccines

Thailand11 hours ago

Samut Sakhon Governor Veerasak offers to resign if communication in his province doesn’t improve

Coronavirus (Covid-19)12 hours ago

Sunday Covid Update: 15,335 new cases; provincial totals

Coronavirus (Covid-19)12 hours ago

Covid UPDATE: 15,335 new infections, provincial numbers

Coronavirus Infections12 hours ago

DDC says infections still rising, possibly falling in Bangkok

Thailand5 months ago

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

Tourism5 months ago

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

Phuket5 months ago

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

Tourism5 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand5 months ago

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

Tourism5 months ago

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

Thailand6 months ago

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

Thailand6 months ago

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

Thailand6 months ago

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

Thailand6 months ago

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

Thailand6 months ago

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

Thailand6 months ago

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

Thailand6 months ago

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

Thailand7 months ago

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

Thailand7 months ago

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8

Trending