How to prepare for retirement?

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Re: How to prepare for retirement?

Postby rhdevries » Sat Aug 06, 2016 10:21

Do any of you buy index funds or ETFs in Taiwan? I'd like to find some S&P 500 low-cost ETF or index funds like the Vanguard type but I only seem to be able to find the actively-managed types from my bank (HSBC). Any other options?

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Re: How to prepare for retirement?

Postby Hannibal » Sat Aug 06, 2016 19:11

The average investor (that includes me) should not pick individual stocks

This I disagree with. If you do the research and learn learn learn, you should be able to latch onto a few individual stocks that, through dividend reinvestment will do very well whatever the market does.

I always brag on my early and weighty investment in Phillip Morris, as it has crushed the market in the past 16 years, due in large part to the dividends and the fact that people smoke in good times and bad. It's not a cyclical stock.

I will give you half a like for the "leave it alone" and "don't time the market" comments though. :thumbsup: I recently bought Lockheed Martin and AT&T for my Roth IRA, both good dividends, and very very low BETAs. I'm confident that world will still require cellular phone towers and war planes when I reach the age of 59.

I guess I would change your comment to "The LAZY investor..." and being lazy is fine. VTSMX is a good index that covers the entire market. It's a bit piece of each and every publicly traded company.
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Re: How to prepare for retirement?

Postby Hannibal » Sat Aug 06, 2016 19:16

rhdevries wrote:Do any of you buy index funds or ETFs in Taiwan? I'd like to find some S&P 500 low-cost ETF or index funds like the Vanguard type but I only seem to be able to find the actively-managed types from my bank (HSBC). Any other options?

Richard
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You won't find an ETF for Taiwan stocks. WHat you will find is the Taiwan Fund:
The Taiwan Fund, Inc. (The ‘Fund’) was launched on December 23, 1986 to allow US and other investors to access and participate in the growth of the economy and the stock market in Taiwan, the Republic of China. The Fund’s investment objective is to seek long-term capital appreciation primarily through investments in equity securities listed in Taiwan. The Fund is a diversified, closed-end management investment company listed on the New York Stock Exchange (NYSE) under the symbol ‘TWN’.


If you're married to a loco though, he or she can set up an account in his or her name and you can buy Taiwanese stocks. I tried that for a while, but Taiwan companies are not that transparent, so I took a hit in flat screen stocks and learned to keep away. When people in Taiwan say they "play stocks" I think they mean it. There's a lot of social predictability, like stocks go up at the end of the year, and the driving forces behind that, to me, are spurious.
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Re: How to prepare for retirement?

Postby Taffy » Sun Aug 07, 2016 05:05

Hannibal wrote:
The average investor (that includes me) should not pick individual stocks

This I disagree with. If you do the research and learn learn learn, you should be able to latch onto a few individual stocks that, through dividend reinvestment will do very well whatever the market does.

I always brag on my early and weighty investment in Phillip Morris, as it has crushed the market in the past 16 years, due in large part to the dividends and the fact that people smoke in good times and bad. It's not a cyclical stock.

I guess I don't like my eggs in too few baskets. I did well out of AAPL (bought after Steve Jobs died) but even though I had a theory about why Apple was good value, I could have been wrong. The company could have gone completely off the rails, all the talented execs could have left, Samsung or HTC could have invented an "iPhone killer" etc. etc. Nowadays I'm strictly index not because I'm lazy, but because I think it's the optimal way for me (and most people) to make money in the market. My Vanguard fund is low-risk, diversified, and has returned an average 12% per annum since 2012. Good enough for me. I don't believe I have "edge" over the people who do this for a living and all it would take is a couple of stinkers in a portfolio of a dozen companies to crater your returns.

I'm with you on investing in Taiwan stocks. Opaque market, narrow spread of big hitters too reliant on huge uncontrollable external factors.
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Re: How to prepare for retirement?

Postby Hannibal » Sun Aug 07, 2016 08:33

I agree with diversifying, and at the time, I was not able to open an index fund. I did accomplish something similar by buy into a dozen stocks that gave me diversification. I'm certainly not knocking the Vanguard indexes though. They are good for all the reasons you state. :thumbsup:

I just like a little more involvement on my part, doing my homework, reading books. I hit on a couple of gems because of that, NFLX and Marvel for example. I feel, for me, it's better to know more, because when the market heads toward the toilet, and it will sooner or later, I feel good with the plays I've made that withstand such volatility, like MO or KRFT, JNJ, PFE. I have never sold stock because of the market's downward moves. I know that next payday, billions will automatically flow back into 401k accounts. That's why I do suggest solid dividend paying stocks, in addition to a good V index. :smile:


Edit: I just read this on the Sunday Times:
Here’s how to get better returns in your retirement account: Pay as little attention to it as possible.

That was the conclusion of a study by the investment giant Fidelity, according to a 2014 article on Business Insider. The article relayed the transcript of a Bloomberg program in which the well-known money manager Jim O’Shaughnessy said that people who had forgotten that they had accounts outperformed everyone else
.
http://www.nytimes.com/2016/08/06/your- ... .html?_r=1
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Re: How to prepare for retirement?

Postby cranky laowai » Tue May 30, 2017 21:55

There's a proposal in the Legislature to change things for foreign white-collar workers. In terms of retirement, there's this:
"Under the draft bill, foreign white-collar workers will be eligible for inclusion in Taiwan's new labor pension system, and those who hold permanent residence will have the option of either a lump-sum payment or a monthly pension upon retirement."

That could be wonderful. But I'm not holding my breath.
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Re: How to prepare for retirement?

Postby Toad » Tue May 30, 2017 22:27

hang on, I thought we were already eligible for that as long as we're paying labour insurance contributions?

OTOH I'm sort of working on the assumption that most governments will simply stop paying any kind of pension (because it'll be mathematically impossible) sometime during my lifetime.
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Re: How to prepare for retirement?

Postby Dragonbones » Tue May 30, 2017 23:00

I believe the government pension programs are headed for bankruptcy at some point, yes. Better to save your own.
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Re: How to prepare for retirement?

Postby cranky laowai » Wed May 31, 2017 12:46

Toad wrote:hang on, I thought we were already eligible for that as long as we're paying labour insurance contributions?

IIRC, a one-time lump-sum payment, yes. A monthly pension, no. The latter is especially helpful if you plan to live forever.
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Re: How to prepare for retirement?

Postby Zardoz » Wed May 31, 2017 13:28

I think having a small farm would be a nice way to retire: good clean food, scalable daily exercise, a sense of nature and growth around you. Then when you keel over, the ducks and pigs eat you and you're part of the cycle of life!

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Re: How to prepare for retirement?

Postby Toad » Wed May 31, 2017 14:28

Zardoz wrote:I think having a small farm would be a nice way to retire: good clean food, scalable daily exercise, a sense of nature and growth around you. Then when you keel over, the ducks and pigs eat you and you're part of the cycle of life!

Yeah, I just bought the farm. Not in the colloquial sense of course, but in preparation for that particular event. In my experience it takes 5-7 years to bring a farm to a state of profitability, so in theory I'll be ready to retire when I'm 50-odd.

The latter is especially helpful if you plan to live forever.

I don't reckon the men with clipboards will allow me to add myself to the compost pile, but that'd be my preference. As Zardoz says, circle of life and all that. Anyway, I'll be happy enough with the lump sum :)

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Re: How to prepare for retirement?

Postby Icon » Wed May 31, 2017 21:20

cranky laowai wrote:
Toad wrote:hang on, I thought we were already eligible for that as long as we're paying labour insurance contributions?

IIRC, a one-time lump-sum payment, yes. A monthly pension, no. The latter is especially helpful if you plan to live forever.


Married people qualify for monthly payments. Singles may if current amendments pass.
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