Any other thoughts on fixed income/low risk investments? Something slightly higher risk/return than CDs but less than stocks?
I’ve got stocks and mutual funds and I’m a little uneasy about putting more there now, given the serious uncertainty about the US economy and the declining US$.
My wife does her thing in Taiwan stocks, so I don’t want to add to that.
And I’ve got plenty in US$ CDs.
So now I’m looking for something different, that should be a fairly safe but decent return.
Commodities? I don’t know anything about them. Something else?
Non-resident of where? Bonds are issued by federal governments (of various countries), municipal governments, corporations, and probably other entities. In the beginning of this thread you can see I was researching what bonds are and how they work and I summarized some of the basics. But I never did purchase any. So the answer to your question depends on what type of bonds.
I’ll look into bonds again for myself, but actually I’m starting to think it may be time to hire a good professional advisor to evaluate my whole portfolio, see how it’s allocated, and make recommendations.
[quote=“Incubus”][quote=“Mother Theresa”]
I may end up getting my CD with ING, which is now paying 5.25% on a 1 yr CD (compared to 4.5% at Fubon)
[/quote]
How do you get such high yields? According to Fubon’s website, the highest rate right now is 2.175% on a 3-yr CD. Do you have to put in a large amount like a million NT or more to enjoy that? :s[/quote]
That’s cuz he’s talking about ING CDs in the US. that and their internet accounts are quite high (along with others competing). This sort of thing doesn’t seem to exist outside the US.
Yes, they trade just like shares. It just depends on the access your broker gives you (to which stock exchange(s)) and what bonds are listed on a particular exchange.
That’s cuz he’s talking about ING CDs in the US. that and their internet accounts are quite high (along with others competing). This sort of thing doesn’t seem to exist outside the US.[/quote]
It depends on the local key interest rate, which has been relatively high in the US.
But now that rates in the US are going down (it was cut to 4.5% yesterday) you can expect that banks will follow and lower their rates, too. So it might be a good idea to invest in medium or long term USD bonds.
Yes, they trade just like shares. It just depends on the access your broker gives you (to which stock exchange(s)) and what bonds are listed on a particular exchange.[/quote]
So are you actually purchasing bonds or buying into a bond fund? I ask because I’ve run up against the non-resident roadblock trying to buy Canadian Savings Bonds.
I do buy foreign bonds, but via my broker in Germany. Dunno what kind of access banks/broker give you here in Taiwan (not much I assume), but you could always open an account overseas, see here: Money dunce seeks safe-ish way of investing/saving
I do buy foreign bonds, but via my broker in Germany. Dunno what kind of access banks/broker give you here in Taiwan (not much I assume), but you could always open an account overseas, see here: Money dunce seeks safe-ish way of investing/saving[/quote]
Thanks, I already have an account in Europe that gives me access to all the major exchanges in North America and Europe; bond funds and money market funds all readily available.
My remark was with regard to purchasing actual, physical bonds directly from the government, municipality, corporation, ect…No real difference when it comes down to it; just curious about the possibility.
No idea about that - does anyone still issue those physically? Any particular reason why you would want those?[/quote]
They do. No particular reason except, if you purchase them directly, you avoid brokerage fees. That, and you have a certificate that you can hold on to. Guess I’m kind of old school that way.
I put substantial sums into a CD with a US bank and was quite pleased with my 5.63% annual return, or whatever. But given the pathetic state of the dollar lately, that guaranteed return is now looking like a guaranteed loss.
My wife’s talking about cashing in the CD, suffering whatever penalty they impose, and putting the money somewhere else. So now we’re starting to consider what might be a reasonable low risk or guaranteed rate of return investment that is likely to be positive, not negative, when one also takes into account the relative value of various currencies.
Any ideas in that regard? What currencies, if any, are likely to gain value over the next year or so? Would it make sense to buy a CD of that currency? Or, perhaps better yet, is a region that uses such currency presently experiencing good economic growth that’s expected to continue in the foreseeable future, so maybe an index fund in that region/currency would be good?
Or do the above ideas not make much sense and you have a better suggestion?
In the same boat and I don’t really understand FX, currency plays etc. I figured that the dollar is low now, but eventually it’ll go up. So to me it’s like buying a stock low but then wait for it to go up. Not sure if that’s the right thinking but that’s what I’m going for at the moment as I can’t seem to find other alternatives.
The NZD and the ZAR pay over 7% at the moment, but both have significantly appreciated over the past couple years. The ZAR recently took a dip and looks set to reappreciate, but don’t know if that will only be shortlived…I’ve been toying with these, but haven’t made a move yet. Part of me is of the same opinion as YC, already bought low, now sit and wait…
Plus, I’m not planning to move back to the states for at least a year (a few years says my wife) and I figure by then the dollar should have recovered significantly, so it’s not necessary to bail out now.
But I wasn’t the one who came up with the idea of bailing out; that was my wife’s idea and I’m not sure she’s correct this time (which is why I’m starting to investigate before she does anything rash).
[quote=“Yellow Cartman”]In the same boat and I don’t really understand FX, currency plays etc. I figured that the dollar is low now, but eventually it’ll go up. So to me it’s like buying a stock low but then wait for it to go up. Not sure if that’s the right thinking but that’s what I’m going for at the moment as I can’t seem to find other alternatives.
Anyone have ideas? TIA,[/quote]
Problem is it may still go lower. And there is no guarantee that it will eventually go up, or it may take years if not decades.
As well you would (currently) be trading against the trend, ‘never catch a falling knife’ as they say …
Following up on my above post, I guess there are two questions:
Due to the dropping value of the dollar, relative to other currencies, should one stop making period conversions of ones paychecks from NT$ into US$ to be invested in US$, but instead start converting into some other currency, that’s more likely to gain value, and invest in that currency?
and more extreme. . .
Is the difference so great that it would actually make sense, for that reason, to cash in ones US$ CD or other US$ investments to exchange them for investments in another currency?
Given that the US$ will eventually rise again and I won’t need to cash in the investment/s for at least a couple of years, I doubt that #2 makes sense. It’s already there, just let it sit. But #1 seems more plausible.
If I wanted to start investing in another currency, likely to gain value in the next year or two, in a stable country/region with safe, secure, transparent banking and securities markets, and various low risk investments available, what should I consider? The Euro?
Save in the target currency of the country you plan to retire in, as long as the financial fundamentals of that place are good. In other words, load up on dollars and keep the ones you have.
Let’s assume that you leave Taiwan when you are say 45 or 50, which should be a few years down the road. Good and fine. In 2002, you could buy one Euro for 79 cents; now you are at 1 dollar 46 cents. Mid term, downside risks for the Euro would appear larger than upside risks.
No! You think that the EUR will go to US$2? US$2.5? It has most of its rise behind it, and trust me - you don’t want to be riding the Euro from US$1.46 to US$0.79. (Or 1.1, 1.2 or parity)
I have an alternative suggestion.
The greenback, if worst comes to worst, you can move there and spend them, without worrying about pesky interest rates etc.
I would say that the Euro has well and truly had its run, and that there’s more downside longer term than upside. If we get a US recession and it speads, then the AU$ will go south, and you should expect the kiwi dollar to go with it.
If you think that the dollar will fall more, keep the cash away from US$ and in say NT$ until it starts to rebound, and then switch the funds over to US$.
Note that the NT$ hzas very strong fundamentals, and that it’s intentionally oversold.
