This morning I added CKI Holdings (1038) to the private portfolio paying HK$28.60 per share. CKI Holdings is a diversified infrastructure investment company. The portfolio consists of investments in electricity, bridges, toll roads and water as well as companies which supply goods and services to infrastructure companies.
The company offers a solid 4% dividend yield and a decade long track record of steadily rising dividends.
Tuesday, August 04, 2009
Monday, August 03, 2009
Independent financial advisers - mythical creatures
There is no shortage of people in Hong Kong who tout themselves as "independent financial advisers". They will claim that they are independent of large (or any) financial institutions. This is nothing short of an outright lie. If they are taking a commission (or other payment) from an institution they cannot be independent and should be prohibited from holding themselves out as such.
The only financial advisers who can legitimately claim to be independent are those whose only income from their relationship with their client is paid for by the client as a fully disclosed fee. These advisers are known as "fee only" advisers. Unfortunately, I have been unable to find such a person in Hong Kong and have concluded that, like the Easter Bunny, such creatures do not exist here.
The reason for the search is that, as my target retirement date draws closer, I would like an independent professional to take a good hard look at our finances, our financial projections and our retirement plan. I want an independent sanity check before I join the ranks of early retirees to give myself maximum comfort that (i) I will not have to re-enter the workforce at a later date and (ii) we will not have to compromise on our living standards.
I do not trust the so called IFAs and the wealth mangers at many banks whom I have encountered. With only very limited exceptions, all have essentially offered me insurance/annuity products which only a moron would buy, high front end load funds with high expense ratios (often with long lock ups) and similarly unattractive products which are designed for the sole purpose of making other people rich at my expense. Most of them ask only basic questions about my financial background and objectives (or none at all) and only once I has a so called financial planner talked about asset allocation. Most do not even ask about wills and medical insurance. The last person I wasted time speaking with gave some of the most outrageously bad advice I have come across.
The limited exceptions are people selling specific products (like overpriced off the plan property developments and futures trading accounts) which are typically equally good wealth destroyers. The only piece of rubbish no one has tried to sell me (yet) is a time share.
How hard can it be to find a competent fee only financial planner in one of the world's financial centres?
The only financial advisers who can legitimately claim to be independent are those whose only income from their relationship with their client is paid for by the client as a fully disclosed fee. These advisers are known as "fee only" advisers. Unfortunately, I have been unable to find such a person in Hong Kong and have concluded that, like the Easter Bunny, such creatures do not exist here.
The reason for the search is that, as my target retirement date draws closer, I would like an independent professional to take a good hard look at our finances, our financial projections and our retirement plan. I want an independent sanity check before I join the ranks of early retirees to give myself maximum comfort that (i) I will not have to re-enter the workforce at a later date and (ii) we will not have to compromise on our living standards.
I do not trust the so called IFAs and the wealth mangers at many banks whom I have encountered. With only very limited exceptions, all have essentially offered me insurance/annuity products which only a moron would buy, high front end load funds with high expense ratios (often with long lock ups) and similarly unattractive products which are designed for the sole purpose of making other people rich at my expense. Most of them ask only basic questions about my financial background and objectives (or none at all) and only once I has a so called financial planner talked about asset allocation. Most do not even ask about wills and medical insurance. The last person I wasted time speaking with gave some of the most outrageously bad advice I have come across.
The limited exceptions are people selling specific products (like overpriced off the plan property developments and futures trading accounts) which are typically equally good wealth destroyers. The only piece of rubbish no one has tried to sell me (yet) is a time share.
How hard can it be to find a competent fee only financial planner in one of the world's financial centres?
Saturday, August 01, 2009
Monthly Review - July 2008
July was yet another hugely positive month for my investments. Solid gains in all asset classes were amplified by favourable currency movements and supplemented by positive cash flows from my investment properties. Income from my job was good and expenses were low. From a financial perspective, everything went my way this month.
Here are the details:
1.my actively managed funds were up. I currently have investments in actively managed funds investing in Thailand, Taiwan, Eastern Small Companies, European Small Companies and Vietnam;
2. my index tracking funds were up. I currently have exposure to Hong Kong, India, Taiwan and Russia;
3. my equity portfolio appreciated strongly. I currently have meaningful investments in 17 companies listed in either Australia (3) or Hong Kong (14). I also have some smaller residual positions dating back many years and two small speculative day trading positions which, collectively, are not meaningful;
4. my commodity investments were went up with an increase in the price of nickel and a rise in my commodity ETFs more than offsetting a further decline in the price of lean hogs. I am now convinced that not only do pigs not fly but they are in fact burrowing animals;
5. my ELDs and CLDs produced positive returns for the month;
6. all my properties are all fully rented and the tenants are paying the rent on time. I have both a positive cash flow and a surplus of income over expenses (which represents an increase in net worth). A bill for fixing a leaking pipe did not change this;
7. currency movements were positive as the US$ declined.
I purchased two Hong Kong shares (China Gas and Herald Holdings) , took a loss on one (South Sea Petroleum), did two small short term trades at small profits and entered into four OTC option contracts:(i) short GDP/HKD (ii) writing a put options against Hong Kong Tracker fund, China Construction Bank and Hutchison Whampoa.
Income was strong (it will be erratic under the new job) and contributed to the gain for the month. My spending was low due to an absence of major items. The increased mortgage payments resulting from the refinancing completed last month adversely affect cash flow but not net worth as most of the payment is principal.
For the month, my net worth increased by an impressive 5,8%. The gains came from the combined effect of higher asset values, a weaker US$ and a high savings rate. The year to date increase is 52.3%. Even allowing for the payout arising from changing jobs, it has been fantastic progress this year. The possibility of retiring at the end of 2011 is, once again, very real.
Here are the details:
1.my actively managed funds were up. I currently have investments in actively managed funds investing in Thailand, Taiwan, Eastern Small Companies, European Small Companies and Vietnam;
2. my index tracking funds were up. I currently have exposure to Hong Kong, India, Taiwan and Russia;
3. my equity portfolio appreciated strongly. I currently have meaningful investments in 17 companies listed in either Australia (3) or Hong Kong (14). I also have some smaller residual positions dating back many years and two small speculative day trading positions which, collectively, are not meaningful;
4. my commodity investments were went up with an increase in the price of nickel and a rise in my commodity ETFs more than offsetting a further decline in the price of lean hogs. I am now convinced that not only do pigs not fly but they are in fact burrowing animals;
5. my ELDs and CLDs produced positive returns for the month;
6. all my properties are all fully rented and the tenants are paying the rent on time. I have both a positive cash flow and a surplus of income over expenses (which represents an increase in net worth). A bill for fixing a leaking pipe did not change this;
7. currency movements were positive as the US$ declined.
I purchased two Hong Kong shares (China Gas and Herald Holdings) , took a loss on one (South Sea Petroleum), did two small short term trades at small profits and entered into four OTC option contracts:(i) short GDP/HKD (ii) writing a put options against Hong Kong Tracker fund, China Construction Bank and Hutchison Whampoa.
Income was strong (it will be erratic under the new job) and contributed to the gain for the month. My spending was low due to an absence of major items. The increased mortgage payments resulting from the refinancing completed last month adversely affect cash flow but not net worth as most of the payment is principal.
For the month, my net worth increased by an impressive 5,8%. The gains came from the combined effect of higher asset values, a weaker US$ and a high savings rate. The year to date increase is 52.3%. Even allowing for the payout arising from changing jobs, it has been fantastic progress this year. The possibility of retiring at the end of 2011 is, once again, very real.
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