The Global Expatriate′s Guide to Investing

ANDREW HALLAM is a personal finance columnist, financial educator, and speaker. An expatriate since 2003, he is the author of Millionaire Teacher and writes columns for The Globe and Mail and for the U.S. based financial service company, AssetBuilder. He also contributes frequently to Canadian Business magazine, and was a nominated finalist for three national publishing awards for his articles in MoneySense magazine. Contact him at his website www.andrewhallam.com.

Foreword Scott Burns xiii
Acknowledgments xvii
Introduction xix
Chapter 1: Setting Your Bull′s–Eye 1
What′s This Ailment Expatitis? 3
Cheating Conventional Retirement Rules 3
Cooking Up the Road Less Traveled 5
The Earthquake and the Epiphany 6
Jujitsu Junkie Taps Out for Home 8
Now It′s Your Turn 9
Notes 10
Chapter 2: Building Your Pension 13
How to Never Run Out of Money 14
The Man with Nothing But a Backpack 16
The Couple with Swedish–American Dreams 18
A Front–End–Loaded Tale of Success 22
Notes 24
Chapter 3: The Truth about Stocks and Bonds 25
Halloween Grab Bag Treats Investors 26
Why Average Returns Aren′t Normal 29
Stocks Pound Inflation 29
What Has the Stock Market Done for You Lately? 31
Undressing Stocks with 50 Shades of Gray 32
The Stock Market Stars as the Great Humiliator 35
Fast–Growing Economies Can Produce Weak Returns 37
Bonds Are Protective Nets for Jumpers 38
Can You Lose Money With Bonds? 41
Notes 43
Chapter 4: Don′t Start a Fight with an Escalator 45
Yes, the Financial District Loves You! 46
Global Investors Getting Fleeced 47
Notes 50
Chapter 5: Where Are the Customers′ Yachts? 51
Global Investors Bleed by the Same Sword 52
American Expatriates Run Naked 53
Why Brokers Want to Muzzle Warren Buff ett 54
Financial Advisors Touting "The World Is Flat!" 56
Hedge Fund Money Spanked for Its Con 58
Why Most Investors Underperform Their Funds 62
Notes 65
Chapter 6: Don′t Climb into Bed with a Silver–Tongued Player 69
Featuring the Rip–Offers 71
The Ten Habits of Successful Financial Advisors . . . Really? 72
When Your Advisor Is a Sales Commando 73
Welcoming Sharks into the Seal Pool 74
Misled Investors Pay the Price 75
A Canadian Investor Gets Bled 75
Would You Like a Band–Aid for That Bleeding Gash? 77
Masters of the Insured Death Benefi t Illusion 77
Free Fund Switching Isn′t a Perk 78
Making Millions off the General Public 79
Fooling the Masses with Numbers 79
Regulators Making an Effort 80
Can Squeaky Wheels Gain Redemption? 83
If Investors Can′t Reclaim Their Losses 84
When High Fees Meet Gunslingers 86
A Son′s Inheritance Gets Plundered 86
British Teacher Learns a Costly Lesson 90
Playing Soccer Like Wasps around Honey 90
Most Investors Are Crazy 92
Notes 93
Chapter 7: Self–Appointed Gurus and Neanderthal Brains 95
Why Most Investors Should Hope for Falling Markets 96
It′s Not Timing the Market That Matters; It′s Time in the Market 97
High Unemployment and High Stock Returns 98
What Can You Miss by Guessing Wrong? 100
When Investors and Advisors Sabotage Their Rides 102
Popular Stocks Underperform 104
How About the Next Big Thing? 105
When Genius Fails 107
Notes 107
Chapter 8: An Employer′s Greatest Challenge 111
Fees How Much Is Too Much? 113
So What′s the Solution for Global Employers? 115
Notes 118
Chapter 9: Couch Potato Investing 119
Don′t Bonds Tie You Down? 120
Is It More of a Fling Than a Real Relationship? 120
Potatoes Growing Globally 122
Bonds Relative to Age and Risk 124
What If You′re Falling Behind? 125
Profi ting from Panic Stock Market Crash 2008–2009 125
Owning the World 126
Where Do You Plan to Retire? 127
Are You Retiring in an Emerging Market Country? 129
Does This Sound Too Good to Be True? 130
Chapter 10: The Permanent Portfolio: Growth without Risk 131
Gold in Isolation Is a Total Loser 132
A Disco–Era Brainchild from a
Twentieth–Century Socrates 132
This Great Portfolio Will Never Be Popular (But It Should Be!) 133
Why Does It Work? 137
What Has It Done for Me Lately? 138
Notes 139
Chapter 11: Fundamental Indexing:
Can We Build a Better Index Portfolio? 141
Like Top Basketball Players Getting the Most Court Time 142
Index Funds That Appear to Beat the Market 144
Investment Legend Likens Them to Witchcraft 144
Global Fundamental Indexes Might Shelter Us from Bubbles 146
Emerging Markets Show the Greatest Diff erence 146
Aren′t These Just Actively Managed Products? 147
Notes 148
Chapter 12: Capable Investment Advisors with a Conscience 149
Do You Have a Ninja′s Discipline? 151
Qualities of a Great Financial Advisor 151
Investment Professionals worth Considering 153
Notes 170
Chapter 13: Choosing Your Off shore Brokerage For Non?]Americans 173
DBS Vickers Securities Opens the Door to Everyone 174
Why You Should Avoid E∗Trade Financial 176
TD Direct Investing International 176
Saxo Capital Markets A Jewel with Distractions 177
Comparing Fees with International Brokerages 179
Is Interactive Brokers the Dark Horse Winner? 184
Notes 184
Chapter 14: The 16 Questions Do–It–Yourself Investors Ask 187
What′s the Diff erence between an Exchange–Traded Index Fund (ETF) and an Index Fund? 187
Do Non–Americans Have to Pay U.S. Estate Taxes upon Death If They Own U.S. Index Shares? 188
What′s a Sector–Specific ETF? 188
Should I Buy an Index That′s Currency Hedged? 189
What′s the Scoop on Withholding Taxes? (For Non–Americans) 191
Will You Have to Pay Currency Conversions? 192
Should I Be Concerned about Currency Risks? 193
Do the Unit Prices of ETFs Show Which Are Expensive or Cheap? 194
If I Have a Lump Sum, Should I Invest It All at Once? 194
I′m in Some Expensive Products, but They′re Currently Down in Value. Should I Sell Now or Wait? 195
How Do I Open a Brokerage Account and Make Purchases? (For Non–Americans) 195
What If I Find a Higher–Performing Bond Index? 200
What If I Find a Cheaper ETF? 201
Should I Be Most Concerned about Commissions, Annual Account Fees, Fund Costs or Exchange Rate Fees? 201
How Little Can I Invest Each Month? 201
Stock Markets Are High. Should I Really Start Investing? 202
Let′s Go! 203
Notes 203
Chapter 15: Investing for American Expats∗ 205
Do You Currently Invest with Vanguard? 206
Couch Potato Investing with Vanguard 207
Couch Potato Investing with a Vanguard Stick Shift 209
When Investors Binge on Speculation 210
Charles Schwab Off ers a Great Deal 212
Doing the Couch Potato with Schwab 212
Permanent Portfolio Investing with Schwab 214
Fundamental Indexing Magic in the Works 214
Don′t Contribute Illegally to Your IRA 215
What Exactly Is an IRA? 216
Roth IRAs Are Diff erent 216
Notes 217
Chapter 16: Investing for Canadian Expats 219
Canadian Funds Earn an "F" for Costs 220
Brokerage Options for Expatriate Canadians 221
Brokerages for Canadians in Capital–Gains–Free Jurisdictions 222
Building a Canadian Couch Potato Portfolio 223
ETF Canadian Price War 227
The Permanent Portfolio, Canadian Style 227
Fundamental Indexing Portfolios 229
What About RRSPs and TFSAs? 230
Swap–Based ETFs, the Ultimate Legal Tax Dodge 231
Notes 232
Chapter 17: Investing for British Expats 235
Expensive Firms Performing Like a Virgin 236
Couch Potato Investing for British Expatriates 237
British Investors and the Permanent Portfolio 240
Fundamental Indexing for the British 241
Notes 243
Chapter 18: Investing for Australian Expats 245
Fancy an Australian Couch Potato? 247
How About an Australian Permanent Portfolio? 248
Fundamental Indexing for Australians 249
Notes 251
Chapter 19: Investing for New Zealand Expats 253
Kiwis Chilling Out With The Couch Potato 254
Permanent Portfolio for Kiwis 255
Fundamental Indexing for New Zealanders 255
Notes 257
Chapter 20: Investing for South African and South American Expats 259
South African Investors 259
South Africans Fry Up the Couch Potato 260
South African Writer Likes the Permanent Portfolio 261
South Africans Preferring Fundamental Platforms 263
South American Investors 263
Brazilian Investing Models 264
Notes 267
Chapter 21: Investing for European Expats 269
Country–Specifi c European ETFs 269
European Indexes That Investors Will Like 271
Why Not Choose the Simpler Option? 274
Calling Italians and the Swiss 275
The European′s Permanent Portfolio 276
Fundamental Indexing for Europeans 277
So What′s It Going to Be Couch Potato, Permanent, or Fundamentally Indexed? 279
Notes 279
Chapter 22: Investing for Asian Expats 281
An Indian National Divulges Her Plan 282
Asians Embracing the Couch Potato 284
Asians Choosing the Permanent Portfolio 287
Fundamental Portfolio for Asians 288
Notes 289
Conclusion 291
About the Author 293
Index 295