NETWorth : A better year ahead ?

NETWorth : A better year ahead ?

ANDREW WOOD

It's a sad but true fact that many investors look after their homes and cars better than the retirement and health programmes that affect their family units more.

In many ways these areas are related. Most people never check their car's water or oil reserves until there is a problem. Similarly for middle-aged couples, should one have a heart scan and cholesterol check, or wait until a problem strikes? Investment portfolio health is equally crucial if you wish to ensure good financial health. As we enter into another new year in which global events will invariably affect every person's financial security, what are some of the crucial areas that all investors should be exploring?

Assessment of financial futures. New Year resolutions, like many good intentions, need to be enforced, otherwise retirement plans and other financially prudent decision-making processes will fall alongside such promises as losing weight or quitting smoking.

It is better to consider these issues sooner rather than later. Let's start with asset management:

- Are your previous investment selections suitably adjusted and positioned to cope with ever-changing worldwide events that affect long-term annual yields?

- Can you get out of trouble as quickly as you got into it?

- Should you switch out of emerging markets in Latin America, for instance, and into more profitable areas such as Asia and Eastern Europe?

- Are your expense ratios too high with onshore brokerages, or should you consider a more personal, hands-on approach to reflect your expatriate status?

- Has your current independent financial adviser (IFA) suitably addressed all your potential tax liabilities? If not, why not?

These are only a few of the essential questions you ought to be attending in this new year's investment health and wealth checklist.

Bank savings account deposits. With many new laws introduced in various jurisdictions, it's a good time to check positioning, deposit returns and tax liabilities in regard to nationality and residency qualifications.

Professional asset management can usually resolve many concerns by restructuring accounts in the most tax-efficient manner. As an international investor you can maximise cash deposits at the most beneficial rates via exchange-traded bonds in tax-exempt offshore financial jurisdictions.

Naturally, each case is dependent on personal circumstances involving many aspects such as:

- Age, nationality and marital status;

- Tax liability, expat exemptions, inheritance tax status;

- Investment withdrawal considerations;

- Corporate health plans and the termination of these valuable protection benefits on retirement;

- Company and personal life insurance policies and how these will affect family households if policies cease at retirement.

Once again, there are many diverse aspects and dangers to retirement that many do not realise until too late. Professional consultancy and strategic planning will greatly assist in mitigating these conditions before other less considerate forces intervene.

Forget trains, boats and planes. How about funds, forex and shares? No matter what the circumstances, world events affect investment potential to make profits. Volatility, however, creates substantial opportunities for smart investors who utilise creative offshore structures and individually personalised assets to maximum benefit. For instance:

- Asian tiger funds: Are your portfolios repositioned to exploit this rising market both now and the future? Or, are they stuck in US mutuals and large caps?

- Foreign currency repositioning: To reduce forex losses from placements six months ago when rates were different, should you consider new forex purchases utilising dollar-cost averaging, reinvesting new funds into more appropriate and profitable acquisitions? This would capitalise on the declining dollar and rising tiger opportunities.

- Share deviation exploitation: Not only are currencies and funds reacting to the dollar, oil and precious metals crisis, but shares too.

Investors who have shrewdly employed professional independent financial advisers have benefited substantially from both upturns and downturns in markets by virtue of strategic trading through exchange-traded bonds and collective investment managed accounts.

Although just two examples of offshore tax-exempt investment instruments are shown here, they demonstrate how international investors have the potential to trade a variety of securities within any given 24-hour period to maximise profit with institutional guarantees of protection.

Whether selecting pets or presents for family this year, pay the same amount of attention in selecting one's choice of investment animal for 2007 onward. Pedigreed pets and investment portfolios can both bite if not managed with professional and proven discipline from the outset.

Questions to the author can be directed to Barclay Spencer International on 0-2653-1971 or e-mail to info@barclayspencer.com

Your money
Bangkok Post
Monday January 15, 2007