I’m a college student from Indonesia, currently studying in Kaohsiung. I have about 3000USD (100k NTD) in savings. Living on 10k NTD/month and my part-time jobs are enough to pay for my monthly expenses so I’m looking to start investing.
I opened an IBKR account and was looking to deposit $2000USD (64000 NTD) into ETFs like the S&P 500, but I’m considering opening a Yuanta bank account and investing in local ETFs like the Yuanta Taiwan Top 50 ETF since there’s no trasfer fees.
Buying: 0.085%
Selling: 0.185%
How “safe” and what kind of safety are we talking about?
Are you talking about “safety” in the sense of political safety etc.? Safety from a total loss?
Then the S&P500 should be a good choice. Maybe consider an index that includes worldwide equities (not only US) as an alternative for even more diversification. The S&P 500 is already quite “expensive” compared to other indices - though some might argue that this is for a good reason.
Or do you want complete safety from potential losses? Then only a bank account will give you that kind of safety.
Even an investment into the S&P500 might loose 30% or more of its value within a matter of weeks - so it doesn’t really qualify as a “safe” investment - but considering the potential reward, still much safer (i.e. less risky) than other alternatives.
Be aware that the fees for transferring USD to IBKR from Taiwan will mostly be fixed - i.e. roughly USD 10-50 per transfer - irrespective of the amount send. So if you send USD2000, you might loose 2.5% in fees - if you send USD10,000 it might only be 0.5%.
Political safety I suppose, I’m looking to invest long term, for 5 years at least so short term losses don’t matter as much. The transfer fees are alright. Any worldwide equities you’d recommend?
I personally hold VOO (Vanguard), but my understanding is that it is very similar to the other popular S&P500 ETFs, such as IVV (iShares) and SPY (SPDR).
Honestly in this financial situation I wouldn’t invest except in CD’s or maybe S&P 500’s. If you want to do S&P I’d wait for stuff to bottom out before putting it in, because it’s still in a bit of a free fall right now.
I’m kinda waiting a bit on S&P for things to bottom out and for stuff to rebound when cooler heads prevail.
For 2k USD the transfer fees and currency conversion fees would be a high percentage of your funds.
If you have your money in TWD already I would recommend using a local bank and buying the local yuanta bank s&p500 (which is denominated in TWD).
And local banks have almost no (0,1%) transaction fees
While one can get lucky with timing the market, most people will hold out too long and then miss the opportunity:
If you don’t hold shares when they fall, you won’t hold them when they rise
André Kostolany
Yeah - it definitely won’t be a negligible amount in this case…
OP is a student - so they should also consider how long they’re planning to stay in Taiwan. Banks in Taiwan are known for closing accounts once the ARC expires. And sometimes hold the funds hostage when one has already left the country… So using IBKR (or a broker in OP’s home country) might be the better option in this case.
…which would not be ideal if someone looks for a way to invest money on the long term. Not sure how banks deal with investment accounts here, but I wouldn’t be surprised if they auto-sell in some cases once an ARC expires…
That’s the plan, reinvest and not touch it for years and years unless there’s an emergency. I plan to transfer once a year considering how high the transfer fee is from a local bank to IBKR ($10-50USD). Though I might do it more often If I invest in a local bank, Yuanta’s S&P 500
I saw your comment on how Yuanta’s Taiwan based ETFs are cheaper to buy and sell so can I have your thoughts on Yuanta/P-shares Taiwan Top 50 ETF. I saw it’s yearly returns are higher than Yuanta S&P 500’s yearly returns. Though it seems less stable from the graphs.
A safe approach is to invest in an ETF that covers the global market. However, based on my research, the broadest ETF available in Taiwan is the Yuanta S&P 500, which includes the top 500 U.S. companies.
To achieve broader market exposure, I also invest in an “MSCI World excluding-US” ETF through an overseas broker, allowing me to diversify beyond U.S. stocks.
The Taiwan Top 50 ETF has a much narrower market focus, basically betting on Taiwan. While this could lead to higher potential gains, it also comes with significantly greater risk.