This is as good a time as any of us will ever see to find out I reckon. I just want to know what it actually involves. The nuts and bolts of making the actual purchase is what I’m after, not advice on “what” stocks to purchase, but “how” to purchase them. Thanks.
I don’t have the definitive answer on this, but only my limited experience trying.
I was told a foreigner couldn’t buy individual stocks in Taiwan, but we could buy mutual funds. The mutual funds had to be managed in Taiwan, but could hold stocks from anywhere.
It was difficult to even find someone willing to sell me the mutual funds. A couple banks turned me down, essentially because the regulations for foreigners investing in Taiwan was too much bother. I have a student from JP Morgan who set me up an account there. The rules are still a little ridiculous. For example, if you get all your statements and make transactions online, your fee is lower… BUT … foreigners aren’t allowed online access…
I’ve never bought or sold Taiwan stocks, but US stocks are easy. Just set up an online brokerage account, deposit money in it, then all you need to do is click a few buttons to make a trade. I use tdameritrade.com and am perfectly happy with it but I don’t know how it compares to others. Do a google search for “best online brokers” and you’ll find many articles such as these.
smartmoney.com/investing/eco … vey-23119/
thenetfool.com/2008-best-onl … k-brokers/
As you can quickly see at the “netfool” article, above, my broker charges $9.99 per trade. Others charge a few dollars more or less. In other words, the trade itself (buying or selling) is cheap. So, there’s really nothing to it and by far the most important thing is to do your research first and be confident (a) your target investment is a good one (not just popular hype) and (b) you’re buying at a good time (not just a good price for your target, but the market/industry in general should be moving in the right direction).
Presently, of course it’s extremely likely that most stocks will drop in price for at least the next few months, perhaps till midway through 2009 (or longer according to some pessimists), but many are picking up stocks now anyway figuring they’ve been beaten down sufficiently that the prices are cheap. Others are focusing on stocks that pay high dividends. Others continue to short stocks (betting against the market). And others are continuing to wait.
From today’s news:
[quote] Economic jitters returned to Wall Street on Monday as American markets shaved off early gains and closed lower. . .
Shares recovered some of their afternoon losses minutes before the close, but by and large, the day’s trading followed a now-familiar pattern: investors veered from rallying behind the latest government stimulus plan to quavering in the face of harsh economic realities.
Financial markets seesawed as investors took in news of China’s plan for an economic stimulus and the federal government’s plan to revamp its bailout of the insurance giant American International Group. They cheered the latest news of interventions in the deepening global economic crisis, but within minutes, the bloom was gone.
American markets hit their highest point of the day just after the 9:30 a.m. opening bell before beginning a steady march into the red.
“Confidence in the outlook has broken, and it will take some time to bring it back,” said . . .
“Investors would love a quick solution to all our problems, but it’s simply unrealistic to expect one. And that has been leading to a repeated cycle of hope and disappointment.”
Aside from basic materials and transportation, which eked out modest gains, every major sector closed down. . .[/quote]
So, making the trades is easy. Making money is the hard part.
I trade through HSBC (Expensive) for HK stocks and have just opened an online brokerage account. I may also look at Scottrade which I understand has a lower minimum deposit.
For Taiwan I understand that you can trade by setting up a company and then using that as a legal entity through which to trade…IMHO thats a lot of bother and I wouldn’t trade Taiwan because of the amount of manipulation in the market.
US citizens have a hard time with investments anywhere outside of the US because of the US tax laws.
The OP didn’t specify that he was looking at Taiwan-listed stocks. Also, given that he/she is asking this question on Forumosa, I would think it wiser to stick to stocks they are most familiar with and those that provide information in their home language, i.e. stocks listed in their home country.
Whatever stocks you are looking to buy, you need to open a brokerage account with a broker that can buy the stocks on your behalf. Buying local stocks through a local broker … it can be done but I understand it is a pain in the ass. For local stocks I would recommend sticking to the US-listed ADRs of Taiwan companies like TSM, UMC, ASX, SPIL, AUO. There are also some closed-end Taiwan funds listed on the NYSE (?) … you’ll need to find those yourself.
From the US perspective, you can open an account online with most brokers even if you live overseas. You will likely still need to mail some sort of proof of your identity and address, such as photocopy of passport and perhaps proof of residential address. Obviously you’d also need to wire in an initial deposit, or mail a check …
If your are comfortable with futures and disciplined with leverage, you might just buy Taiwan index futures listed on the Singapore exchange. It is my preferred way to ‘own Taiwan.’ That would require a futures account, or an account with a broker that ‘offers’ access to Singapore-listed futures contracts.
A good broker I’ve used is Interactive Brokers. They are inexpensive, online with a help desk in HK, and offer global stocks, futures, currencies and bonds from a single account.
Have fun.
It is just not true. With an account at Interactive Brokers, for example, one can trade HK, Aus and Tokyo-listed stocks along with most all stocks listed in US and Western Europe, not to mention most any futures contract listed around the world. The CFTC (Commodities Futures Trading Commission), in its infinite wisdom, restricts trading in some futures by US RESIDENTS. Just one more benefit of living outside the US …
[quote=“Mother Theresa”]I’ve never bought or sold Taiwan stocks, but US stocks are easy. Just set up an online brokerage account, deposit money in it, then all you need to do is click a few buttons to make a trade. I use tdameritrade.com and am perfectly happy with it but I don’t know how it compares to others. Do a google search for “best online brokers” and you’ll find many articles such as these.
smartmoney.com/investing/eco … vey-23119/
thenetfool.com/2008-best-onl … k-brokers/
As you can quickly see at the “netfool” article, above, my broker charges $9.99 per trade. Others charge a few dollars more or less. In other words, the trade itself (buying or selling) is cheap. So, there’s really nothing to it and by far the most important thing is to do your research first and be confident (a) your target investment is a good one (not just popular hype) and (b) you’re buying at a good time (not just a good price for your target, but the market/industry in general should be moving in the right direction).
Presently, of course it’s extremely likely that most stocks will drop in price for at least the next few months, perhaps till midway through 2009 (or longer according to some pessimists), but many are picking up stocks now anyway figuring they’ve been beaten down sufficiently that the prices are cheap. Others are focusing on stocks that pay high dividends. Others continue to short stocks (betting against the market). And others are continuing to wait.
From today’s news:
[quote] Economic jitters returned to Wall Street on Monday as American markets shaved off early gains and closed lower. . .
Shares recovered some of their afternoon losses minutes before the close, but by and large, the day’s trading followed a now-familiar pattern: investors veered from rallying behind the latest government stimulus plan to quavering in the face of harsh economic realities.
Financial markets seesawed as investors took in news of China’s plan for an economic stimulus and the federal government’s plan to revamp its bailout of the insurance giant American International Group. They cheered the latest news of interventions in the deepening global economic crisis, but within minutes, the bloom was gone.
American markets hit their highest point of the day just after the 9:30 a.m. opening bell before beginning a steady march into the red.
“Confidence in the outlook has broken, and it will take some time to bring it back,” said . . .
“Investors would love a quick solution to all our problems, but it’s simply unrealistic to expect one. And that has been leading to a repeated cycle of hope and disappointment.”
Aside from basic materials and transportation, which eked out modest gains, every major sector closed down. . .[/quote]
So, making the trades is easy. Making money is the hard part.[/quote]
Thanks man. I’ll be careful.
Curious too if there is a minimum investment on all stocks, or if the minimum investment differs between stocks, or vut exactly.
Actually I’ve got a bunch of questions probably. Questions and no time to ask just now. Catch you guys on the rebound.
Same here, tdameritrade. My bro in the U.S. helped set up the account, which required a U.S. home address I think. Then I wire money to that account, and a couple days later when it shows a balance, I place orders to buy MF online. The order gets placed at the end of the trading day, so if you enter your order at 6pm on Fri., and Mon. is a holiday, your order actually gets dealt at the end of trading four days later, just FYI.
Tdameritrade has nice little features that show you how much money you’ve lost as the market tanks. 
Wow, not many people here do much with Taiwan stocks. I have a ‘逃豐’ account which I used to trade the stocks of the company I work for. Originally when I opened it they asked for a police certificate or something although I told them that was not neccessary. Sure enough they called me back later to say it wasn’t neccessary (just to let you know that unless they know the rules they often ask for ridiculous stuff like this). They give you a broker’s number and you just call up and give them the recommended amount to buy/sell and how many (company is on emerging market), then later in the day they will inform you of how many you have off-loaded/bought and at what price. I can speak Chinese although I’m pretty sure some of the brokers will speak English and will be happy to practice with you if you don’t speak Chinese.
I went into one of the Fubon securities branches before and the counter lady said there weren’t any specific rules and gave me the application form (I guess an ARC and Taiwan bank account is neccessary though). I asked about minimum amount and I think she said a very small number like a few 1000s NTD or so. You can go in and see all the oldies who hang out there all day looking at the computer screens. The last time I chatted with one of them he just told me that ‘you foreigners pulled your money out and thats why the stocks went down today’ 
.
As regarding minimum investment, yes there is because they bundle the stocks in groups of 1000s usually. A rough guide of how it works in Taiwan is that each stock of a company is originally issued at 10 NT (sold in bunches of 1000’s usually so the minimum purchase is 1000 stocks at a time). If you see a stock price below 10 NTD you can guess that is not doing so well, if you see a stock price of 950NTD per share you can know that the original founder made 1000s of % cent on their investment (this doesn’t take into account stock splits but as a general idea it’s helpful). The transaction charge is small compared to other countries although I confess I don’t what it is and the capital gain’s tax is also very low on trades. You don’t need loads of cash to do individual trades which is nice.
I have some sort of account that my stock bonuses are deposited in (down about 60%, or more in the past year :discodance: ). Should’ve sold a year ago.
My (Taiwanese) wife has a few Taiwan stocks, though she’s a lot quieter and less active (inactive presently) with those than she used to be, long ago when she was making money hand over fist. Now she’s just holding on waiting till it finally crawls back up again.
But I’d, personally, be very wary of trading in Taiwan stocks. I would expect there will be (a) far less information available upon which to do prudent research, evaluation and comparison, prior to plunking down hard-earned money, and (b) much less honest information than one would find in the west, due to weaker regulations, laxer enforcement of regs, and other factors. It’s hard enough making wise decisions in the West, but here I would imagine it’s even more of a crap shoot.
I agree, Taiwan companies are extremely opaque (in fact I lost money on the company I work for stock issues, they went from ‘80% hope of passing the IPO review’ to ‘meeting delayed to August’ to ‘withdraw IPO’ and now ‘listing on a foreign stock exchange’). I should have known better…
My favorite way to buy stocks is to rush into the brokerage house five minutes before closing yelling, “Buy! Buy! Buy!”
I was warned (by bankers I work with) against trading in the local market, especially mutual funds, due to extensive manipulation of the market by corrupt, old-money KMT types. 
Have you guys never heard of Texas Hold 'Em?
The wife and I are planning to set up an account in her name (she is taiwanese) at an American brokerage house. Anybody know if that will work and if so at which brokerage house, etc?
Bob–I know Zecco and Etrade will let her open an account. Etrade seems to have pretty high transaction fees.
Don’t do Sharebuilder–they won’t allow US citizens living outside of the US to open an account. I moved the account to Zecco and have been happy so far. For Taiwan, it was easy to open an account at Yuanta, although investing here is quite the roller coaster ride.
Fantastic. Thank you.
It’s possible to open an account to trade Taiwan stocks as a foreigner. I have an account with Sinopac. As long as your Chinese is ok it’s actually quite simple. I seem to recall all they needed was my ARC. You can trade online (again, all in Chinese) and it’s very convenient.
Actually my Ma or one of my sisters back home send me some about twice a year.
Nothing fancy, just a couple of 4- or 6-packs of grey or black cotton, maybe tube-style, for the summer.
I usually wear the wool work-style ones in the winter, and they seem to last forever.
I find ones here are too thin, and usually have too much synthetic, they just feel greasy.
Maybe you could get your folks at home to do the same.
But don’t expect to get rich off that strategy.