Expat investors advised over worst investment strategies

Published:  6 Sep at 6 PM
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Expats looking to augment their pensions are strapped for choice nowadays, with offshore banks closing their doors, the market in a state of fluctuation and dodgy FAs lurking around every corner.

Even expats with little or no interest in investment strategies are now being advised to understand the market and analyse its options. It’s tricky to know who to trust when you don’t get the basics, and even, occasionally, when you do, but certain investments are possibly the worst idea given present circumstances.

In the past few years, property investments have thrived despite the 2008 financial crisis, but not every investment is wise, and failures are being seen, with over-investing a bad idea. The same could be said for internet IPOs, several of which, including Google and Facebook, have fallen recently.

For most expat investors, hedge funds are far too high-risk, especially for retirees, and exchange traded funds are now one of the worst places to stash your cash due to their extreme changes. Once firm favourites, penny stocks are also underperforming, although for basic income supplementation they’re useful.

After hedge funds, mutual funds are the least inspiring choice for investors as they, too, are drastically underperforming, whatever your FA tells you. Savings bonds, once popular as gifts, have a very low returns rate and should be cashed out and the money reinvested.

Certificate of Deposit Savings Accounts are another no-no due to their low returns and connection to inflation rates. If rates change abruptly, you’ll lose out.

Commodities attract high commission rates, depleting profits even when they’re doing well, so it’s wise to restrict your amount, and bond and other long-term funds aren’t suitable options for expats due to high charges, poor income ratios and a certain loss when you decide to sell. Overall, KISS – keep it simple, stupid – is the best advice.
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