During my recent trip (October 2018) to Brunei, many friends and families have been asking how they can invest their savings in stocks and shares. Brunei is a tax-free country with low cost of living and yet many still keep their money in extremely low-interest bank savings of 1%. Property investments and business start-ups are amongst the most common form of diversifying investment portfolios in the prosperous Sultanate land.
Do you know that SNP500 US index, which holds [Apple, Microsoft, FB, Pepsi], have grown at an average of 9% in the last 90 years? Stocks and Shares investments is a form of a financial vehicle which can be started with a low capital of BND$1000.
So how and where can we invest in stocks and shares in Brunei?
Answer – BAIDURI CAPITAL
Please note that MooMooCoo is not paid for this blog and video post.
The reason for this charity work is to help Brunei local residents gain financial knowledge to hopefully boost the local economy and further grow their wealth.
Not bother to read through, no sweat a quick video summary below.
There are two reasons why I recommend my Brunei readers to start investing in stocks and shares today.
Firstly, Brunei is a Tax-Free country and financial gains are totally tax-free. In other countries like Singapore, Korea and Hong Kong; there is a variable between 20-40% tax for profits earned from stocks and shares. So if you invested $10,000 in Netflix shares ten years ago, you would have a gain of $730,000 if you sold today. The government from these states would take a share of between $140,000 to $280,000. In Brunei, you would pocket all $730,000.
Being stuck in the GMT+8 time zone, it is not exactly easy for Brunei Residents to go to their local banks and brokers to buy specific shares or ETF in UK or US. When the UK market opens its 1630hrs local time. When the US market opens it could be 1930 or 2030hrs local time in Brunei. Baiduri Capital offers online and also phone apps for buying and selling shares via their platform.
Stocks and shares investing are high risk, which means that your 100% capital is at risk. If you bought shares from a company at value X and the company goes bankrupt, you lose your entire stake.
Only invest in money you can afford to risk.
Make sure you have emergency savings set aside for a rainy day before you invest. Rule of thumb is to have at least 12 months savings if you ever lose your job.
Long-term investment and a diversified portfolio of stocks and shares are key elements of success. Long-term is at least a vision of more than 7 years or more. Diversified stocks in at least 4 different sectors.
If you are starting out as a newbie investors make sure you have at least BND$20,000 in index funds or diversified ETFs before you proceed to stock picking.
Key Blogs for further reading before investing.
Baiduri Capital is an investment sub-division of the main retail Baiduri bank. Baiduri capital offers various investment vehicle from foreign currency, insurances, Unit trust funds, Stocks and Shares and Exchanged Traded Funds.
Out of all the products, the one I highly recommend is ETFs. ETFs can be classified as an index funds vehicle if the right type is selected. You can trade ETF on a regular basis, however, the high cost can actually eat away your profits if not carefully planned. Holding ETFs from at least three regions can help diversify your portfolio quickly in a short period.
I would strongly recommend holding the SNP500, FTSE100, Japan Nikkie and Emerging markets to ensure you have a collection of good global companies for future growth and yield. See next chapter for the recommendation.
Buying shares should be discouraged if your ETF holdings are under BND$20,000. Baiduri capital does offer buying shares of min BND$30 commission charge which is quite high. So I would recommend buying at least USD$3,000 per share to ensure the fees sits below the 1% threshold.
US Markets is the only market which I recommend investing in over Singapore, Malaysia and Hong Kong markets. Simply, why invest in local Malaysian holdings when you can own Apple or Microsoft shares. For the Chinese market, I would only recommend Tencents and Ali Baba.
Note – Click on tab for more details and link.
Collection of establish shares from high dividend paying EU companies which includes Shell, Nestle, GSK, HSBC, Siemens and many more. This ETF is top weighted to financials int he EU.
The European and UK is a long developed nations and do not expect exponential growth. These companies are higher paying dividends and well establish companies. Buy to install more defensive approach to your portfolio
Collection of establish shares from all global companies except the United States. Ranges from Samsung, Tencents, Toyota, Shell, Taiwan Semiconductor, HSBC and many more.
This should be the first ETF to own if you have less appetite to risk.
Technology driven ETF which holds Facebook, Visa, Apple, Nividia, Adobe and many more.
Technology stocks have driven the US economy since the 2007 financial crisis. Higher risk and higher returns. The question is that how long more before the momentum pops the bubble?
Toyota, Mitsubishi, Kao, Sony are just a few of the house hold names listed in this ETF.
Do you know the Japanese Economy have struggled since the year 99? With two major financial crisis in 2000 and 2007 have wipe Japan’s growth. After 2 decades the Japanese economy seems to have return for high potential returns.
Facebook, Apple, Netflix and Amazon are just a few of the house hold names listed in this ETF.
The largest growing index have grown 9% average for over 90 years and is still growing. This is the La Liga of all stock exchange markets which drives the world economy.
AliBaba, Tencents, Ping An Insurance and Samsung are just a few of the East Asian household names within this ETF.
The Chinese economy may have grown almost exponentially since the late 2000. The market is currently downed close to 30% as of today. You need a strong heart to stomach the volatility roller coaster. If you buy and hold for ten years an investor is most likely to see some handsome gain.
Many think that going to Singapore and Hong Kong is the only option to invest in the equity stocks and shares market as they are the financial hubs of South Asia. WRONG!
Brunei’s Baiduri Capital gives local Brunei residents access to financial investment vehicle which is not known to many. Having the option to invest in the US and world ETFs, is a key way to start your stocks and shares portfolio.
Stocks and Shares are always higher risks than property investing but more likely return higher on a long-term investments. This is supported by many research papers.
I highly recommend local Brunei residents to invest actively rather than keeping all in low-interest banks. Start educating your kids and the younger generations and understand the US methods of passive investing. Passive investing is a method to grow your wealth with minimal efforts while you are sleeping. Investing is the best method to trick you into saving more money rather than wasting them on cars, gadgets and clustering homes with unwanted items.