Links to recent press coverage:
http://www.assetadviser.co.uk/2010/04/14/42770/uk-expats-moving-pensions-offshore
http://www.iaireview.org/2010/02/meyado-private-wealth-management-singapore-has-nominated-mark-paine-as-its-managing-director/
http://www.free-press-release.com/news-meyado-launches-qrops-1270694280.html
http://investmentasia.net/news/814
http://www.ameinfo.com/db-924175.html
http://www.linkedin.com/companies/meyado
http://www.free-press-release.com/news-meyado-private-wealth-management-appoints-singapore-managing-director-1265793620.html
http://www.assetadviser.co.uk/2010/04/20/43276/commodity-sector-remains-top-asset-pick
http://www.smartexpos.com/smartexpo2009/SGMAR/speaker_bio.htm#Mark_Paine
Wednesday, April 21, 2010
Wednesday, April 7, 2010
Tuesday, April 6, 2010
HOW TO STRUCTURE YOUR INVESTMENTS
HOW TO STRUCTURE YOUR INVESTMENTS
By Chris Williams
Allocating to different investment classes versus stock picking!
There are so many opportunities available today; it becomes increasingly difficult to make the right investment decisions.
Let’s have a look at the major asset classes, then move on to appreciate asset allocation strategies. You can check on where you are now relative to your risk appetite and get a better feel for perhaps where you should be!
The major asset classes are:-
• Cash
o Including fixed deposits, money market accounts
• Bonds
o Investment grade (Sovereigns and quality corporate names) or high yield (junk); short, medium or long-term; domestic or foreign
• Equities
o Global, regional, country, or industry specific
• Property
o Residential, commercial, retail, REITS
• Commodities
o Oil, grains, precious metals, etc
• Hedge Funds
o Specific strategies or Fund of Hedge Funds
You may hold individual equities or bonds, but the vast majority are held via unit trusts, mutual funds or exchange-traded funds (ETF’s).
Other asset classes include financial derivatives (mainly futures and options contracts, which give virtual access to dozens of markets with high leverage) and luxury goods such as art, jewellery, cars and yachts.
To put these asset classes into perspective, at the end of 2008 global private wealth stood at US$32.8 trillion – and growing. With all the noughts, that’s US$32,800,000,000,000 – a lot of money in anyone’s book.
Pension funds, mutual funds / unit trusts and insurance assets totaled US$61.6 trillion, with private wealth accounting for about a third of that figure.
Real estate assets were US$11 trillion, hedge funds US$1.5 trillion, then private equity and REITS around US$1 trillion each.
Asset Allocation
Asset allocation is based on the idea that in different periods, different assets will perform better than others. It is easy to see why some investors will swap and change their holdings according to whim – but that strategy could easily end up with much worse results than by adopting a consistent approach.
The key is that different asset classes offer returns that are not perfectly correlated. Therefore, by diversifying investment classes, the investor is reducing overall risk for a given level of expected return.
A great deal of academic study has been done on this subject, and it explains the importance of asset allocation and the problems of active management. This explains the steadily rising popularity of “passive” investment styles (buy and hold) using index funds.
Making decisions on what percentage of your investments should be in any one class will ultimately depend on your appetite / aversion to risk. Simply buying stocks without regard of a possible bear market can result in panic selling later. Your true risl tolerance can be hard to gauge until you have experienced a real bear market with money invested in the market.
Projected 10 year Cumulative return after inflation
(stock return 8% yearly, bond return 4.5% yearly, inflation 3% yearly
80% stock / 20% bond 52%
70% stock / 30% bond 47%
60% stock / 40% bond 42%
50% stock / 50% bond 38%
40% stock / 60% bond 33%
30% stock / 70% bond 29%
20% stock / 80% bond 24%
Source: Bekkers Niels, Doeswijk Ronald Q. and Lam Trevin W., Strategic Asset Allocation: Determining the Optimal Portfolio with Ten Asset Classes , Journal of Wealth Management, Vol 12, No 3, pp 61-77, 2009
The table shows why asset allocation is important. It determines an investor's future return, as well as the bear market burden that he or she will have to carry successfully to realise the returns. This is over simplified, of course, as your portfolio is likely to include other asset classes as well.
Asset allocation decisions, as opposed to specific fund or stock choice, and market timing, are the driving force behind well structured investment portfolios and returns.
Finding the proper balance is key – which is a great reason to seek professional advice.
[The author is Senior Investment Advisor with Meyado Private Wealth Management Pte Ltd in Singapore, and has over 40 years experience in financial markets]
By Chris Williams
Allocating to different investment classes versus stock picking!
There are so many opportunities available today; it becomes increasingly difficult to make the right investment decisions.
Let’s have a look at the major asset classes, then move on to appreciate asset allocation strategies. You can check on where you are now relative to your risk appetite and get a better feel for perhaps where you should be!
The major asset classes are:-
• Cash
o Including fixed deposits, money market accounts
• Bonds
o Investment grade (Sovereigns and quality corporate names) or high yield (junk); short, medium or long-term; domestic or foreign
• Equities
o Global, regional, country, or industry specific
• Property
o Residential, commercial, retail, REITS
• Commodities
o Oil, grains, precious metals, etc
• Hedge Funds
o Specific strategies or Fund of Hedge Funds
You may hold individual equities or bonds, but the vast majority are held via unit trusts, mutual funds or exchange-traded funds (ETF’s).
Other asset classes include financial derivatives (mainly futures and options contracts, which give virtual access to dozens of markets with high leverage) and luxury goods such as art, jewellery, cars and yachts.
To put these asset classes into perspective, at the end of 2008 global private wealth stood at US$32.8 trillion – and growing. With all the noughts, that’s US$32,800,000,000,000 – a lot of money in anyone’s book.
Pension funds, mutual funds / unit trusts and insurance assets totaled US$61.6 trillion, with private wealth accounting for about a third of that figure.
Real estate assets were US$11 trillion, hedge funds US$1.5 trillion, then private equity and REITS around US$1 trillion each.
Asset Allocation
Asset allocation is based on the idea that in different periods, different assets will perform better than others. It is easy to see why some investors will swap and change their holdings according to whim – but that strategy could easily end up with much worse results than by adopting a consistent approach.
The key is that different asset classes offer returns that are not perfectly correlated. Therefore, by diversifying investment classes, the investor is reducing overall risk for a given level of expected return.
A great deal of academic study has been done on this subject, and it explains the importance of asset allocation and the problems of active management. This explains the steadily rising popularity of “passive” investment styles (buy and hold) using index funds.
Making decisions on what percentage of your investments should be in any one class will ultimately depend on your appetite / aversion to risk. Simply buying stocks without regard of a possible bear market can result in panic selling later. Your true risl tolerance can be hard to gauge until you have experienced a real bear market with money invested in the market.
Projected 10 year Cumulative return after inflation
(stock return 8% yearly, bond return 4.5% yearly, inflation 3% yearly
80% stock / 20% bond 52%
70% stock / 30% bond 47%
60% stock / 40% bond 42%
50% stock / 50% bond 38%
40% stock / 60% bond 33%
30% stock / 70% bond 29%
20% stock / 80% bond 24%
Source: Bekkers Niels, Doeswijk Ronald Q. and Lam Trevin W., Strategic Asset Allocation: Determining the Optimal Portfolio with Ten Asset Classes , Journal of Wealth Management, Vol 12, No 3, pp 61-77, 2009
The table shows why asset allocation is important. It determines an investor's future return, as well as the bear market burden that he or she will have to carry successfully to realise the returns. This is over simplified, of course, as your portfolio is likely to include other asset classes as well.
Asset allocation decisions, as opposed to specific fund or stock choice, and market timing, are the driving force behind well structured investment portfolios and returns.
Finding the proper balance is key – which is a great reason to seek professional advice.
[The author is Senior Investment Advisor with Meyado Private Wealth Management Pte Ltd in Singapore, and has over 40 years experience in financial markets]
Monday, April 5, 2010
QROPS Frequently Asked Questions
I'm not sure if it is worth transferring my pension?
A good rule of thumb is that if your pension transfer value is worth £100,000 or more then QROPS is worth investigation. At less than £100,000 then the fees and charges may mean it is not in your financial interests to transfer out.
Why should I move my pension offshore?
Some of the main reasons are,
Concern over stability of your pension provider. This may include pensions held within companies who are potentialy financially unstable.
Currency - you may wish to receive your pension in a currency other than sterling.
Control - you may wish to have a more hands on approach to your pension management.
To receive untaxed income. The majority of UK schemes will pay your pension income net of UK tax.
You may wish to take more or less income than your current provider offers. UK schemes work on GAD which is the same offshore, but with untaxed income you may be able to realise higher incomes offshore. Likewise if you want to protect your capital you can draw down less.
How does it work?
You will need to write to your pension provider and request a transfer to the relevant QROPS trustees. Once transferred your pension needs to be invested into a suitable vehicle - your financial adviser will be able to recommend a product and an investment strategy suitable for you.
Can I still take the 25% tax free lump sum?
Yes you can.
Can I just take the money out and spend it?
No - QROPS is not designed to "bust" your pension but to gain control in an offshore environment. Qualifying plans adhere to HMRC rules and regulations. Be wary of schemes which promise otherwise.
For more information contact us at info@meyado.com
A good rule of thumb is that if your pension transfer value is worth £100,000 or more then QROPS is worth investigation. At less than £100,000 then the fees and charges may mean it is not in your financial interests to transfer out.
Why should I move my pension offshore?
Some of the main reasons are,
Concern over stability of your pension provider. This may include pensions held within companies who are potentialy financially unstable.
Currency - you may wish to receive your pension in a currency other than sterling.
Control - you may wish to have a more hands on approach to your pension management.
To receive untaxed income. The majority of UK schemes will pay your pension income net of UK tax.
You may wish to take more or less income than your current provider offers. UK schemes work on GAD which is the same offshore, but with untaxed income you may be able to realise higher incomes offshore. Likewise if you want to protect your capital you can draw down less.
How does it work?
You will need to write to your pension provider and request a transfer to the relevant QROPS trustees. Once transferred your pension needs to be invested into a suitable vehicle - your financial adviser will be able to recommend a product and an investment strategy suitable for you.
Can I still take the 25% tax free lump sum?
Yes you can.
Can I just take the money out and spend it?
No - QROPS is not designed to "bust" your pension but to gain control in an offshore environment. Qualifying plans adhere to HMRC rules and regulations. Be wary of schemes which promise otherwise.
For more information contact us at info@meyado.com
Meyado QROPS
Meyado is pleased to announce the launch of QROPS products to its' clients in Singapore.
Have you ever worked in the UK?
Are you likely to retire outside of the UK?
If you answered Yes to both of the above then QROPS may be an interesting way of moving your UK based pension scheme offshore where you can enjoy many benefits of having closer control of YOUR pension funds.
For more information visit www.meyado.com or contact us at info@meyado.com
Have you ever worked in the UK?
Are you likely to retire outside of the UK?
If you answered Yes to both of the above then QROPS may be an interesting way of moving your UK based pension scheme offshore where you can enjoy many benefits of having closer control of YOUR pension funds.
For more information visit www.meyado.com or contact us at info@meyado.com
Meyado
Meyado Private Wealth Management is a regulated financial advisor offering advice to executives in Europe, the Middle East and Asia.
We are regulated by the FSA in the UK and the MAS in Singapore.
For more information please visit www.meyado.com or email us at info@meyado.com
Meyado
Helping People...
...Achieving Goals
We are regulated by the FSA in the UK and the MAS in Singapore.
For more information please visit www.meyado.com or email us at info@meyado.com
Meyado
Helping People...
...Achieving Goals
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About Me
- Mark Paine
- I joined Meyado Private Wealth Management as an international financial adviser in 1993. I have lived and worked in the USA, Europe, the Middle East and currently reside in Singapore in South East Asia where I am Managing Director of Meyado Pte. I am a qualified Financial Representative in Singapore under the MAS Financial Advisers Act as well as holding UK FSA CFP and FPC examinations and a BSc in Business and Law from the University of Hertfordshire in the UK. You can contact me at markpaine@meyado.com
