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Expat Investor : October 2008
INVESTMENT BANKING The seven golden rules of investment 1. Know yourself as an investor. Begin by drawing up a detailed plan of your financial objectives. What do you want to do with your money? By identifying goals, investors can then match these to relevant investments. such as those used by larger institutions. Additionally, we do not outsource any of our customer support functions, preferring to concentrate on providing a truly bespoke personalised service for clients. Offshore banking is a growing and ever-changing industry. This is despite the fact that stock markets have had a torrid time of late, and although the global economy is currently in slowdown, one would surmise that this won’t last forever. More and more people are relocating around the world, and this is a trend that is likely to continue. “It is not unusual for so-called 2. Maintain a financial plan. Once drawn up, a financial plan will only prove effective if it is regularly reviewed. Under this review check that the plan you have in place is delivering an appropriate balance between risk and return. 3. The four main asset classes are equities, bonds, property and cash deposits. Investors will find it useful to read up about these classes and their fundamental characteristics. Your researches will ensure that you hold the most appropriate mix of asset classes in your portfolio – a mix that matches your risk appetite and will ensure you achieve your financial objectives. 4.Work out your risk tolerance. Risk is a necessary element of investment and one which all investors must build into their investment strategy. Investors must always consider the downside to any investment opportunity as it is presented to them, as well as the upside. Worthwhile decisions can only be made when the risk–reward ratio has been worked out. Risk is very often best managed through diversification. The old sally, don’t put all your eggs in one basket, is apt for investors. Ensure your portfolio encompasses a balanced approach in terms of geographic, sectoral and stock spread all of which should ensure a you will not come a cropper to individual influences. 5. Timing is critical for investment success. It’s not just a matter of when you buy, but also when you sell. As a broad rule of thumb, the longer your investment horizon (that is the longer you can afford to have your money tied up), the more your portfolio should be able to absorb elements of risk. 6. Check out the tax implications of any investment decision. Although advisers do not suggest that investment decisions should be taken solely on tax considerations, tax liabilities can have a large impact on the performance of a portfolio. An understanding of the taxation implications of any investment should, therefore, be factored into every decision making process. Remember to consider tax liabilities due in the country of residence as well as those which might fall due when returning to the UK. Plan ahead by taking expert tax advice. 7. Past performance is no indication of future outcome. The strategy of many unfortunate investors using the past as an indication of the future is not one to follow. When choosing investments which have generated strong returns don’t automatically assume such momentum will continue. Investigate all the factors which have driven this growth and seek expert opinion as to whether those factors are sustainable over the longer term. 6.65% * AER ‘expatriates’ to be married to citizens of other Offshore savings rate One great nationalities, to move from country to country and never expect to return ‘home’.” These expatriates are using private banks for their advantages in financial planning and estate planning. There are also a lot of global entrepreneurs who choose to use offshore private bank accounts for the same reasons. It is not unusual for so-called ‘expatriates’ to be married to citizens of other nationalities, to move from country to country and never expect to return ‘home’. For them, offshore banking is the simplest and most advantageous solution. Indeed it is the only real solution given the level of advice they will need and the pure logistics of their geographical position. Offshore bankers are specialists, so they can offer tailored advice about foreign currency, switching Continued on page 8 October 2008 ? EXPAT INVESTOR 7 Fast Facts 88003 Whether for income, growth or easy access our eSaver Offshore savings range offers great rates, online application and secure access to your account online. View our online accounts click www.alil.co.im/ads/expat *Accounts must be opened with money that is not already deposited with the bank. Full terms and conditions available on our website. Accounts must be applied for and operated online. No cash or cheques. Email address is compulsory. Minimum balance £25,000. Maximum balance is £1,000,000. Withdrawals may be made free to a UK, Channel Islands or Isle of Man bank account by BACS payment (up to 5 working days). Charges apply for other types of withdrawal. Rates correct at time of going to press 12 August 2008. eSaver Offshore Notice 50 (Issue 1) 6.65% Gross pa/AER variable on balances above £25,000. Withdrawals on 50 days notice. Interest paid annually on 31 December. eSaver Offshore Flexible Income (Issue 1) 6.65% AER Variable on balances above £25,000, (Monthly interest 6.46% gross p.a., Quarterly interest 6.49% gross p.a.). Interest paid monthly or quarterly, switch your income preference online. Withdraw up to £5,000 once per month without notice. All other withdrawals available on 60 days notice. Minimum withdrawal £5,000. Gross is before any deductions. AER - Annual Equivalent Rate illustrates the interest rate if interest was paid and compounded each year. Interest may be paid free from tax offshore depending on your country of residence for tax purposes. EU Savings Tax Directive rules apply to EU resident customers. Deposits made with an Isle of Man office of Alliance & Leicester International Limited are covered by the Isle of Man Depositors’ Compensation Scheme contained in the Banking Business (Compensation of Depositors) Regulations 1991. Alliance & Leicester is the registered trade mark of Alliance & Leicester plc. Alliance & Leicester International Limited, PO Box 226, 19/21 Prospect Hill, Douglas, Isle of Man, IM99 1RY, British Isles. Incorporated in the Isle of Man (No. 81918C). Licensed by the Isle of Man Financial Supervision Commission for banking business. Two great online savings options eSaverOffshoreNotice 50 and eSaverOffshore Flexible Income * Apply online today!