Sorry for the late reply. Let me answer the questions of eager Pret:
About this financial tsunami, even super state USA cannot escape from it, no one can expect to escape from it. By the way we can shelter our wealth.
Holding cash may be a way to but it depends on the currency. In the foreseeable future nearly all the major currencies will devaluate and maintain low for long, especially USD, Pound and Euro. HKD is linked with USD. So you know the result of holding HKD if USD falls.
I would suggest if you hold cash as part of your portfolio, the wise way is to hold RMB. Compared with other currency, RMB has sufficient back up and the closed capital market protects it from FX attack. It’s stronger than the others.
Pret, you know quite a lot about the funds, like ETF. You raise some advantages of ETF but miss some characteristics. The transaction cost of ETF seems relatively low and liquidity is high. Actually the management fee of ETF is implicit in the fund price, but overall the transaction cost is relatively lower than mutual funds. Liquidity is its advantage as you can trade like stock, while mutual funds are priced once a day, even some once a month.
To choose the suitable investment tools, cost is a concern, but the performance is also important. In many case the mutual funds outperform ETF. The following figure shows the comparison between two famous ETFs, Tracker Fund (chasing HK Hang Seng Index) and A50 (chasing China A shares) and mutual fund, First State China Growth Fund (both Hong Kong and H shares). You can see for the past 7 years First State outperforms Tracker Fund anytime. Whereas A50 is very frustrating, all in all the mutual fund outperforms.
(Although A50 is very frustrating, it’s my favorite fund. It’s the only fund that foreign investors can buy for investing A-shares. But it’s still not the time to buy.)
There are several ETFs in the stock market, which chasing the market indexes of Hong Kong, India, Asia and gold. Whereas in mutual funds, you have much more choices among regions, industries, commodities, assets and securities and even hedge funds.
About “"How about the charge??? maybe meet and own me a dinner. hahahaha!!!" --> what is this suppose to be? The advisor is going to charge me dinner and hahaha it too?”
In USA and Australia, an independent financial advisor doesn’t charge clients commission, but service charge, in terms of management fee, advisory fee and performance. What I try to do is in that system.
Hope I can answer your question. Feel free to ask if anything else!!!
