With gold prices diving sharply, is it the right time to invest in gold? If so, should I invest in bullion or futures? I have never invested in gold. I prefer to play safe with deposits and to invest through LTFs and RMFs. But if it's a good idea to diversify risks and if I could generate a higher return with a slightly higher risk, I can take it.
ANSWERED BY... Teera Phutrakul, CFP, chairman, TFPA A recent dip in the price of gold to about US$1,578 per ounce represented a 5% drop from the start of the year, which compares with an 8.7% gain last year.
Although the market remains mixed on the near-term outlook for gold, the recent decline could be due to an improving US economy, reduced sovereign debt issues in Europe and an improving domestic economy.
If you don't have any gold in your portfolio at all, this pullback could be a good time to gradually add gold to your portfolio. However, you have to understand that gold is not really an investment in a traditional sense of the word because it doesn't pay a dividend or interest.
In fact, there are opportunity costs in owning gold. As an asset class, gold can be quite volatile; the peak-to-trough price swing can be as much as 20-30%.
You have to think of gold as a long-term insurance against the loss of value of paper or fiat currency. It's the one currency that can't be manipulated by the central banks.
Gold thrives on financial risk, and we should not forget that there is still so much risk out there in the financial system.
I have a 700,000-baht fixed deposit account for my 15-year-old son, but I can only save 10,000 baht monthly in that account. I plan to send him to study abroad when he turns 20. I have five years left to achieve my education plan, but 1.3 million baht will not be enough. Should I invest this amount of money in the stock market or anything that is not too risky to make my dream more possible?
ANSWERED BY... Teera Phutrakul, CFP, chairman, TFPA When estimating the total price tag for overseas university expenses, it really depends on what kind of course you want your son to pursue and the types of educational institutions that you want him to attend. Like everything else in life, there are colleges and universities for every budget level. Once you have found a university within your budget range, the first rule of thumb is to make sure that your investments grow with your child.
With tuition costs rising faster than inflation, a portfolio tilted toward stocks is the best way to build enough savings in the long run. As your child approaches college age, you can shelter your returns by switching more money into bonds and cash.
Admittedly, 700,000 baht does not get you very far these days. But you still have five more years to make your dream come true. Even if it does not, student loans and grants can bridge the gap between your savings and tuition bills.
My friend runs a business on Facebook in which she buys goods without receipts and makes a profit by reselling them. She earns net income of about 30,000 baht a month. If she has to file a personal tax return, she is concerned about how to begin because she has no invoices.
ANSWERED BY... Teera Phutrakul, CFP, chairman, TFPA I hope your friend was not involved in the recent Furby dolls internet scam. E-commerce relies on proof of payment. If your friend sells stuff online and clients are willing (or gullible enough) to transfer money into her bank account without any receipts, then it's going to be quite difficult for the Revenue Department to track all the transactions.
However, if your friend has a store on Facebook with e-commerce features, it would be advisable for her to come clean and file personal income tax.
Besides, the tax deductions are quite generous under Section 40(8) for income derived from business and commerce. In addition, the first 150,000 baht is tax-exempt. With proper tax planning, her taxable income should be quite small.
The Thai Financial Planners Association is the Certified Financial Planner (CFP) trademark licensing authority in Thailand. It is a self-regulated, non-profit group of financial advisers and experts from various organisations set up to give advice to investors. Questions can be submitted through firstname.lastname@example.org or posted on the TFPA webboard at www.tfpa.or.th
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Writer: Thai Financial Planners Association