Expatriate Investment

Summary: If you're an expatriate who is fortunate enough to be benefiting financially from the time you're spending away from home then you might consider investing the excess money you have thereby putting it to good use.

As an expatriate working overseas you’re sometimes financially rewarded by your employer for relocating abroad.  Other expatriates who choose to move abroad and work find that they can earn far more in certain locations than they ever could back home.

It can also be the case that where in the world you relocate to has a lower cost of living, lower taxation costs and generally affords you the benefit of having more money in your pocket at the end of each month.

If you’re such an expatriate who is fortunate enough to be benefiting financially from the time you’re spending away from home then you might consider investing the excess money you have thereby putting it to good use.

We all have our own unique reasons for wanting to save or invest money - from a simple desire for a given level of personal financial security to the desire of long term wealth gain.  Whatever you own personal reasons it is initially important to make sure that you have your day to day finances securely covered before considering any other form of expatriate investment.

With that in mind let’s examine the basics of building a secure expatriate investment portfolio.

Firstly, when defining financial allocation across a portfolio any decent financial adviser will always make sure you have enough in cash investments before proceeding any further.  Cash is fairly stable it is liquid and it must be immediately available.  Cash investments would include money market accounts and simple savings accounts.

With the cash portion of your investment portfolio covered it’s time to move on and look at the building basics.  And as with any type of building project you have to have the right tools and commodities to complete the project successfully.

Part One - Diversification

As no one can ever predict the exact outcome of any investment made, because certain investment types behave differently under varying market conditions and because markets rise and fall it is essential for a balanced portfolio to diversify across investment classes and incorporate investments for growth and investments for income.

Part Two - Quality

The stability of your entire portfolio is only as sound as the quality of each individual investment within it.  So how do you define ‘quality’ when it comes to an investment?  Well, there is no one key answer to this question, quality cannot be guaranteed, however if you look for investments from well-managed providers who can boast a solid track record and who operate from jurisdictions offering decent levels of investor protection you will be going along the right lines.

Part Three - Global Focus

If you invest globally you will have access to far more opportunities, if you invest globally through a well diversified fund you can reduce your overall risk status.

Part Four - Stager Maturities

By staggering or ‘laddering’ the maturity dates of your income producing investments you will potentially produce a far more reliable and stable stream of income which is not so susceptible to interest rate fluctuations.  The alternative worst case scenario is that all your investments mature at a time when interest rates are low, making reinvestment unattractive and fairly pointless and which can negate any gains you had so far enjoyed.

Part Five - Ongoing Review

To build a truly effective expatriate investment portfolio it is essential to have access to the best advice and the best investment products available.  A good independent financial adviser should be able to assist you to this end, and as an expatriate it is worth securing the advice of such an adviser who has global and offshore focus as well as you possibly have the advantage of being able to benefit from offshore investments as well.

Once you have worked with such an adviser to determine your risk profile, investment objectives and to build a well structured, well diversified portfolio it is not a question of sitting back and waiting for the maturity of each element of the portfolio!  You have to regularly review your portfolio as market conditions and investment attractiveness and applicability can all change, as can your own personal circumstances.

Most advisers recommend you spend a little time with them at least once a year, if not every six months to make sure your portfolio remains as well tuned to meet your requirements and to take advantage of all the opportunities available as possible.

If you would like to build your own financial portfolio we will happily make an appointment for you at your convenience with an asset management adviser, the adviser will not only help you determine your investment objectives, he will also introduce you to the best quality investments available from the global financial marketplace with which you can then build your investment portfolio.  Or, if you have an already established portfolio and think it’s about time you had a review to make sure it’s working as effectively for you as possible, please get in touch and we will endeavor to assist.

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