Expat Advice Asia Investments

Investments

Expat Advice Asia can help you unlock your money’s full potential with a wide range of investment options.

 

How investments work

Investments are a way to help you increase your wealth and build a strong financial future.

At its core, investing is simply putting your money into something that has the potential to provide a financial return over time.

When you invest, you buy assets that you expect to increase in value. The return on your investment can either be in the form of dividends, otherwise known as income payments, or capital gains.

Unlike certain types of savings accounts, your money is not locked away, and you can access it at any time. However, investing is a long-term strategy for building wealth. Despite this, investors now seem more eager than ever to sell their shares. On average, investors hold on to shares for 0.8 years compared to 9.7 years in 1980.

So, how long should you hold on to your investments? Industry experts still suggest at least five years for investors to see the best growth.

You can invest capital in almost anything. However, the four main asset classes include:

  • Stocks
  • Commodities
  • Bonds
  • Real estate

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What are the different types of investments?

The type of investment you choose will depend on several factors, such as how much risk you are comfortable with and your goals.

The two main options for investors are funds and individual shares.

Shares

Shares are what come to mind when most people think about investing. Think of shares as buying a small piece of a company.

The company’s performance and other factors determine the overall value of the share price. The better the company performs, the more your investment is worth.

The bad news is if the company does not do too well, the value of your investments could go down.

Funds

Funds are ready-made investments. The types of investments included will differ between funds, but typically, they will consist of a mix of assets.

Although funds do not give you the same level of control as picking individual investments, they will be better suited to some clients as they can save them time, hence the term ready-made investments.

Another benefit of investing in a fund is that they allow you to spread your money across various investments. This is known as diversification, and it’s a strategy that can help spread the investment risk. This is one of the most attractive features of a ready-made investment.

On the topic of risk, funds allow you to pick one based on the amount of risk you are willing to take.

For example, you may wish to go with high-risk investments that offer higher returns as you have time to make up for losses while you are younger. As you get older, you could move to a lower risk fund that is more weighted towards bonds.

Funds typically fall into one of two categories: active or passive.

Active funds

These are run by fund managers. Their job is to try and outperform the market and generate the best return for their clients. Because there is a fund manager, fees tend to be higher than passive funds.

Passive funds

These types of funds aim to track and match financial markets. While the returns may be lower than active funds, fees are typically lower because there is no fund manager.

Sustainable investments

The sustainable investing sector has gained a lot of traction in recent years.

These types of investments focus on sustainability and positively impact the world. Ultimately, they provide individual investors with a way to invest in an area that aligns with their beliefs.

Sustainable investment solutions work the same as other types of investment. The key difference is that they have to meet specific standards to be considered.

ESG funds are probably the most recognised within the sector. They look at a company’s environmental impact and wider effects on society. If they meet the criteria, they can become part of an ESG fund.

Not only have they grown in popularity, but they have also grown in profitability, providing attractive returns for investors who are looking for responsible investments.

How do you make money from investments?

Regardless of the type of investment, there are two main ways people make money investing: dividend payments and stock appreciation.

With dividends payments, the company will pay its shareholders based on the company’s performance.

Stock appreciation is when the value of the share increases over time. When you sell your shares, you receive the value of those shares when they are sold.

Some people opt to buy and sell shares regularly to accumulate wealth incrementally. However, this can often be a high-risk option due to the volatility and daily fluctuations found on the stock market.

Generally, people prefer to use their stocks and shares for long-term investments, as the value of many companies grows over time based on their performance.

Is investing right for me?

Thanks to lower costs of living and reduced tax, expats living in Thailand and the THAILAND often find they save more.

Investments for expats are a great choice to put their additional savings to work. Of course, it all depends on your goals.

Remember, investing is a long-term strategy. This means it may not suit people with shorter-term goals where savings might be the better option.

You will also need to assess how much risk you are willing to take. Like most things, investments are not a sure thing, and some carry more risk than others. It’s essential to make sensible investment decisions that align with your risk profile and, ultimately, meet your financial goals.

How to get started with investments

The world of investing is full of jargon and can sometimes seem confusing. With so many types of investment vehicles, it can be challenging to know the best option based on your needs and requirements.

A qualified wealth manager can give you the expert investment advice you need to build a profitable portfolio that can withstand any climate.

For over two decades, clients have trusted Expat Advice Asia to manage their investments in Thailand and globally. We provide tailored financial advice and ongoing support, giving you the tools needed to build a robust investment portfolio.

Whatever your investment goals, our team of wealth managers can help.

If you’re an expat living in Thailand and want to learn more about how Expat Advice Asia can help you with your investments, simply fill out our quick form. We’ll be in touch to get you started on your investment journey.

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