Korean Job Discussion Forums

[jlb]

Hey everyone, this is the year that I'm going to fly under the radar with regard to Canadian taxes and officially declare myself a non-resident. Because of this, I don't really want to start investing for retirement in Canadian banks/mutual funds, etc.

What are my other options?

[the_beaver]

Get an e*trade account and invest in the states.

It's a buyers paradise right now.

[jlb]

Beaver...some stupid questions. You invest through the Canadian Site? Does this put you on the radar screen for Revenue Canada? Is it easy enough to transfer money to that account from Korea?

[gmat]

www.interactivebrokers.com is the place you want, cheap commissions and they cater to clients everywhere. Canadia citizen in Korea, no problem - accounts denominated in US$, Euros, Yen (your choice).

FYI: e*trade almost went under last month.

[Bagpipes11]

Whether you declare non-residency or not, stock purchases are taxed at redemption. So, even if you purchase them as a non-resident now...moved back to Canada in five years and then sold them 5 years after that....you would still be taxed on the Capital Gains of the stock....regardless if you were a non-resident or not when you purchase them.

[gmat]

Sell them before you go back, problem solved. Who holds stocks for 5 years? Answer: Chumps - Buy and hold is for chumps. Don't listen to the financial industry marketing whores.

Only exceptions to this rule 1) you luck out and bought a stock that never has a downtrend (extremely unlikely to happen, but possible - example Google http://charts.dacharts.com/2007-12-11/gmat01.png)

2) You are not bright. You don't know how to exit a position that has started a downtrend. In this case, buy and hold is better than keeping your funds in low interest bearing accounts as long as you have a long investment horizon : 10+ years.

[the_beaver]

[jlb]

I'm not an experienced investor (obviously) and have so far only ventured into the realm of mutual funds. Can I continue doing the mutual fund thing through these online sites? I want to invest but not necessarily devote an excessive amount of time. I'm willing to do a bit of reading though.

[drkalbi]

Don't listen to the people on this board. Investing can be complicated. Each person has their own set of financial goals. You should sit down with a professional and go over your goals. They will set up something for you. I would have a Korean friend go with you to your bank or financial institution to help you. I personally have an index fund. It's a mutual fund that mirrors a particular stock exchange such as The Dow or Kospi. Mine mirrors the Kospi. They usually do pretty well over a 5 year period. Remember, this is what I chose after spending time discussing my goals and future with a pro.

[PRagic]

Yup. Always talk to a pro. It's better to have someone to blame other than yourself when you lose it all!

Seriously, though, the previous poster gave great advice. It's good to invest long term, and you should look carefully at your risk tolerance and liquidity needs.

Feels good once you get a good lump-o-coin working for you, eh?

[the_beaver]

[gmat]

The so-called pros will try to get you to buy and hold or they will try to churn your account if they are commission based. You don't need a pro for this.

If you don't want to actively manage your account, buy a good index fund or a small basket of them that have low expense ratios. There is no need to pay "pros" for this advice.

Even with mutual funds, learn how to dump something that has started a clear downtrend.

Take a look at a very simple chart of the Dow http://charts.dacharts.com/2007-12-12/gmat02.png and answer this: was there any reason to own the broad stock market from 2001 to mid-2003? Answer: No.

By the way, if you bought stocks in late 1999 early 2000 (which some of my friends did), they did not make any money until 2007 (if they held on).

*note: I worked as a "pro" in this industry before cashing out in April 2000.

[jlb]

So a lot more research today....and I'm thinking that Index Funds are probably the way to go for me, at least to start with.

The new question is this:

I checked out Etrade and it seems like you need your funds to come from a Canadian/American bank account, which I don't want to do.

And the interactivebrokers.com doesn't seem to offer the Index Fund type mutual funds.

Any other suggestions on how to do this from Korea?

[gmat]

Exchange Traded Funds are the same as index funds and I would suggest that this is the way to go. These are available at Interactive Brokers and any other broker that you may choose.

Hundred's of ETF's are offered through the American Stock Exchange.

" Each ETF is a basket of securities that is designed to generally track an index*�broad stock or bond market, stock industry sector, or international stock�yet trades like a single stock. The unique combination of many of the best features of other investments presents financial opportunities for both individual and institutional investors, including:

Tax efficiency**
Lower costs** (ordinary brokerage commissions apply)
Transparency
Buying and selling flexibility
All day tracking and trading
Diversification*
A wide array of investment strategies

For more details on the advantages of ETFs and why they have become an indispensable class of securities to many investors, select an investor type below..."

[Bagpipes11]

Gmat,

I don't agree with your buying and selling strategy. What about stocks that pay dividends? Are they not worth hanging onto?

Buy low and sell High! You are a genius!!!

I don't think that you should criticize professionals that are employed in an industry that you know nothing about