Investing in International Stock Markets from Chile

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jehturner
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Re: Investing in International Stock Markets from Chile

Post by jehturner » Sat Dec 10, 2016 1:17 pm

jehturner wrote:There is also TD International in Luxembourg, which seems quite a good service -- but note that they have a clause in their terms & conditions pretty much saying that if someone breaks into their system and steals your funds, that's your problem and not theirs!
It seems there was some miscommunication regarding the intended meaning of this clause and TD has now given a more satisfactory explanation, just to put the record straight. They do seem like the best option for passive/self-selected investment, especially when getting started.

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Re: Investing in International Stock Markets from Chile

Post by frozen-north » Sat Dec 10, 2016 1:33 pm

jehturner wrote:
There is also TD International in Luxembourg,....
Which one?

This one mentions Luxembourg:
Manage your global investments with a multi-currency account in Luxembourg

http://int.tddirectinvesting.com/
This one does not:
TD International, LLC (TDI)

http://tdinternational.com/company/

jehturner
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Re: Investing in International Stock Markets from Chile

Post by jehturner » Sat Dec 10, 2016 1:54 pm

frozen-north wrote:
Manage your global investments with a multi-currency account in Luxembourg

http://int.tddirectinvesting.com/
Yes, that one.

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Re: Investing in International Stock Markets from Chile

Post by admin » Sat Dec 10, 2016 8:28 pm

I recall reading somewhere that td trade routes a lot of their international transactions through saxo, just without the high costs. Again can not recall where i seen that, so might have been some other broker.
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jehturner
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Re: Investing in International Stock Markets from Chile

Post by jehturner » Sat Dec 10, 2016 10:59 pm

They do mention Saxo (described by my Danish neighbour as "dodgy") as their partner for derivatives trading, so that sounds quite probable.

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Re: Investing in International Stock Markets from Chile

Post by papageno » Sun Dec 11, 2016 12:07 am

jehturner wrote:
frozen-north wrote:
Manage your global investments with a multi-currency account in Luxembourg

http://int.tddirectinvesting.com/
Yes, that one.
Useful information, thank you for posting it.

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Re: Investing in International Stock Markets from Chile

Post by otravers » Fri Dec 30, 2016 11:05 am

Interesting and timely discussion. Did anyone actually open an account with TD Direct Investing yet?

It happens that this guy just posted a video about their online platform:
https://www.youtube.com/watch?v=w19Xf8nHfNY

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Re: Investing in International Stock Markets from Chile

Post by otravers » Fri Dec 30, 2016 6:33 pm

Looking more into TD's LUX platform, their multi-currency + ETF support makes me think of combos to hedge against holding assets solely in CLP and USD. For instance right now our Chilean house is $150K cheaper in USD than it was a few years ago (well not really because of its appreciation in CLP terms, but let's say all other things being equal), so if we wanted to sell it and relocate to the US, we'd get significant less house there. Not that it's our immediate plan, but I'd like better diversification against wild currency swings. Heck, I'd like to benefit from them, without turning into an FX daytrader (aka picking pennies in front of a steamroller). I'm thinking more about 5 to 10-year relatively passive investments based on macro theses.

Say I think that Japan or the UK's stockmarkets priced in their own currencies have more room for upside than downside in the medium term, relative to the US stockmarket priced in USD, on top of the diversification benefit. Then buy, say a Nikkei ETF denominated in yens, be ready to sit on it for years and wait for the right timing where you like both the ETF's value in combo with the USDJPY or CLPJPY rate.

Maybe try to compound that further if there's a convincing smart beta ETF reflecting the state of internal demand in the respective countries. Possibly something based on industries such as construction or services, just thinking out loud here. So if Japan rebounds, you multiply FX gain x stockmarket gain x local exposure gain. If these conditions are not met... then you wait till the next US downturn puts some wind in your thesis.

Provided you don't need liquidity from these investments, and based on the observation that these things go up and down in cycles, you could presumably (eventually) have a nice multiplicative effect once accounted back in the currencies that you're actually spending (i.e. if you live/consume in Chile/US you can't spend yens or pounds).

Of course the US dollar could continue its run forever, but historically exchange rates tend to swing back and forth rather than continue in one direction forever (or else crazy PPP discrepancies would build up), and so do stock markets.

Another thesis is the fact that owning CLP assets means you're de facto long on copper, so that might be something to hedge somehow.

Thoughts from our savvy investors?

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Re: Investing in International Stock Markets from Chile

Post by jehturner » Sat Dec 31, 2016 10:22 am

These are very much the kinds of things I'm thinking: ETFs, currency diversification with assets (principally the house) currently overweighted in CLP+USD, general market diversification etc. I'd like to put more in GBP in case we retire or send the children to study there, esp. when it's currently so cheap and with Chilean mutual funds being so crap. Not sure I qualify as a savvy investor though (I'm pretty much getting started, aside from my employer's USD retirement account and a couple of modest local cash/bond funds). With TD, the ETFs do appear to be the way to go -- I can only spot offshore investment funds charging 1.7% PA otherwise (and with a limited range of options).

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Re: Investing in International Stock Markets from Chile

Post by admin » Sat Dec 31, 2016 10:49 am

My 2016 - 2017 investment review / predictions.

I would say the Euro or Pound is going to be where the action is in 2017. If the Euro goes below parity to the dollar, then I would be a buyer. Some are talking about 0.80 to the dollar / euro at some point. I think the the dollar is going to go for a run this year, but will eventually weaken under it's own momentum and other things.

One thing I am hearing, in spite of all the bad news about Europes economy, is there are signs of life in various parts now. In 10 years, you would likely do o.k. I would be more inclined towards say buying some sort of good paying dividend stock that pays in Euros or Pounds, rather than just having a big cash position in Euros doing nothing in particular for the long haul.

I have also even kicked around the idea of buying a property in Europe. Not sure which country, but perhaps something in northern Europe. Not a big fan of the Mediterranean, when I could get something even cheaper in the Caribbean closer to home. The thing that keeps me from taking that idea too seriously, is simply distance. Managing a property from the other side of the World is typically an expensive hassle.

The U.S., I am not even remotely interested in investing in this year. There are no real deals left in just about any sector. I did pretty good playing the oil rally early in the year what I call my 'swimming pools and garden hose' strategy (i.e. oil storage and pipelines). I still have a position in oil tankers, but I am going to dump those here when the yearly cycle tops out. After that I am probably going to cash everything out of the U.S. dollar as it strengthens in the 1st half of the year. At which point moving to TD trade or some more international broker would make sense.

The Chile investment play this year will be all about the election. As long as it looks like someone that is sort of business friendly is coming in, even if not some extreme right winger, then the Chilean markets will do good. The rally over the last year, I believe was partially a play on that and partially a play on the recovery of the rest of South America. Lot's of Chilean companies, with their fingers in the neighboring markets. So, Chile is a safe proxy to those markets. Even though copper did not do very well this year, and the Chilean economy sort of limped along, the IPSA and most of the major components did really, really well.

The Chilean IPSA: 12.80% , I believe beating the 10% return in the S&P 500, but the IPSA gave up some gains right at the end. The 52 week move: 3,418.77 - 4,484.16, if you caught it at the bottom.

However, besides owning an ETF that is an index fund of the IPSA, I was cherry picking the best IPSA components (there is some real crap companies in there), and focus on Chilean companies that had large exposure to the neighbors and / or were expanding aggressively in to other markets.

My biggest Chilean positions in 2016:
Fallabella ---- up 17% for the year --- I like sodimac for shopping, I have literally spent millions of pesos at their stores over the years. In fact, I have spent more money with them than almost any other business in Chile. Mostly because they don't make me beg them to take my money (you hear me Easy). Fallabella is expanding all over latin america including taking on home depot in Mexico. They also got credit cards and banking segments.

Lan ----- up 51.63% for the year---- Got slapped down hard by the currency devaluations in other LA markets they operate and post-merger with tam problems, but I am betting the recovery in those assets they wrote down in prior years puts a nice tailwind under them in coming years.

BCI --- up 29.40% ---- they bought a bank in the U.S., with a solid credit rating.

PARQUE ARAUCO ---- up like 40% --- expanding all over Peru, Colombia, and so on. They were able to get one of the lowest interest rates on a corporate bond offering in history this year to expand. So, some solid books. They took advantage of the downturn in Peru and colombia to buy out their local partners and become 100% owners. demographic play

ENTEL --- 14.7% ----- Mostly because I hate Movistar, even though I am a customer.

SQM ---- up like 55% --- Largest lithium producer in the World, in spite of the fights with the Chilean government. If they get the political b.s. sorted out, the Chinese are chomping at the bit to buy them.

Copec --- up like 5% --- I like their hot dogs, and they are buying up companies all over the World, in all sorts of industries. They still have not broken out, but perhaps 2017 will be their year. They bought a chain of gas stations in the southwest U.S., a gas company in Peru, among other things this year. Just a matter of time before all those investments start paying off. They got beat up bad in their lumber / OSB buisness, due to the global glut. The U.S. is dumping OSB in to Canada. Canada is dumping OSB in to Chile. I am not sure where Chile is dumping it's OSB.

I am starting to get a bit skiddish with the valuations on many of these, but these are long-term investments, so if anything I would buy more if there was a significant market pull-back.

As for Chilean real estate, I don't know. The market has not been on fire this year, but nice steady advances, in spite of copper. I have hard time seeing how copper crashes much lower from here, and there is still viable production that would not cause an outright mega shortage. I think we are pretty much at the bottom of the commodity super-cycle in 2016, and 2017 is recovery year. Which, more than likly, means a strong peso will start showing up at some point, in spite of a stronger dollar.

Like always, you got to be selective where you buy real estate. Buy quality properties, in places that will always be in high-demand, and you will do good no matter what the rest of the economy is doing. Due to the quirks of Chilean culture, remember, that if you buy real estate in a highly saught after market, even where a large portion of the country could not afford to live, only the richest of Chile, even in a bad economy, there will always be someone that wants to buy. If the rich get waked, there will be someone trying to climb out of the bottom or the middle class that does have the money (or at least the credit rating to get a mortgage).

Good investments are generally very liquid investments. But, you also want to put your Chilean cultural beer goggles on, and make sure you are not buying investment property through gringo eyes. Chileans will often want very different things than a foreigner. Ideally you buy property that ticks the boxes for both foreign and Chilean tastes in real estate and has demand by both.

I have been hunting hard to buy some properties this year, but simply have not found anything that really blows my hair back. Came really, really, close to pulling the trigger this year on a few, and possibly missed some killer opportunities most likely just by waiting too long, but still a buyer if I find the right one.

Real estate is still my go to, base investment, makes me sleep good at night.
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Re: Investing in International Stock Markets from Chile

Post by admin » Tue Jan 03, 2017 7:53 am

Bloomberg has Chile on a list of top Emerging markets for 2017 investment. Mostly because of rising copper price, and expectation of pro-biz administration out of the next election.

https://www.bloomberg.com/news/articles ... ts-in-2017

Besides Chile however, they also have Mexico listed due to the artificial nature of the beaten up peso. I have been seriously giving Mexico some thought, but have not really settled on a strategy for getting in to that market yet.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

jehturner
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Re: Investing in International Stock Markets from Chile

Post by jehturner » Thu Jan 12, 2017 10:03 am

Just FYI, a TD representative states that "We are not able to accept accounts for US nationals or residents at all". I thought I had read somewhere that they did take American customers but that appears not to be the case now, unfortunately.

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