Hongkongers make early retirement plans with safe portfolio
Many city investors are opting for a less risky path to ensure financial security in retirement - and they're starting to plan at a younger age.
Nigel Wan Sui-hang, assistant principal of a Hong Kong primary school, is in his early 30s. Wan's already started planning for his retirement. He makes monthly contributions to three investment funds in the hope of retiring at 55.
"My goal is to own HK$5.5 million worth of assets at 55," said Wan. "My job is pretty stressful. With that amount of money, I could quit my job earlier and enjoy life." The retirement age for teachers in Hong Kong is currently 60.
Wan admits that he has not been a cool-headed investor in the past and made losses in the Asian financial crisis and when the dot-com bubble burst.
"I didn't understand the market well at that time, nor did I have any concrete financial knowledge," he recalls. "I just got information from my friends and followed the herd. My money was soon wiped out. Fortunately, it wasn't a huge loss."
Since then, Wan's investment philosophy has changed. He began subscribing to investment funds in 2001 through a financial consultant.
That year, Wan took the advice of his friends to consult financial planners in wealth management. "I didn't want to speculate on stocks, blindly trusting market rumors anymore. It's better to hand over the job to professionals."
About a quarter of Wan's monthly income goes to three investment funds and insurance.
"I think funds are relatively safe compared with just investing in shares because they're more risk-diversified and can access global emerging markets," he said.
"My portfolio comprises investments in Eastern European and Latin American countries, since I'm sanguine about their economies. With a range of funds, even an ordinary investor like me can tap into these markets."
Wan doesn't divulge the exact return of his portfolio, but he says he is very satisfied with its performance.
Zuriel Fu, Wan's financial consultant, says he normally designs portfolios for clients based on their risk endurance and spending behavior.
"Since Wan rated himself risk-neutral, I recommended two funds to him accordingly," said Fu. "I normally review portfolio performance with him at least once a year, but the frequency depends on his requests."
But Wan hasn't stopped buying shares. Instead, he has learnt to invest wisely. "Unlike my previous investments, I spend a lot of time studying the financial reports and background of the companies (I plan to buy shares in)."
His efforts are finally paying off. Wan made a decent profit from the recent bull-run. "I bought Jiangxi Copper because it's unique, and thanks to the US rate cut I've booked some profit."
(China Daily 11/14/2007 page15)
