Investment options for Expats

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namekevaste
Posts: 34
Joined: Fri May 05, 2017 6:12 pm

Investment options for Expats

Post by namekevaste » Wed Oct 04, 2017 7:46 pm

Are there unique investment options that are only available to US citizens living abroad? Do any expats on this board have examples to share? Please indicate what features (diversification, return, safety, tax benefit etc) you found attractive.

Stryker
Posts: 373
Joined: Tue Nov 24, 2009 6:13 am
Location: Canada

Re: Investment options for Expats

Post by Stryker » Thu Oct 05, 2017 4:08 am

You may want to check out Andrew Hallam's blog. He's the author of "The Global Expatriate’s Guide To Investing" and "Millionaire Teacher".

https://andrewhallam.com/

AlohaJoe
Posts: 2424
Joined: Mon Nov 26, 2007 2:00 pm
Location: Saigon, Vietnam

Re: Investment options for Expats

Post by AlohaJoe » Thu Oct 05, 2017 4:58 am

namekevaste wrote:
Wed Oct 04, 2017 7:46 pm
Are there unique investment options that are only available to US citizens living abroad? Do any expats on this board have examples to share? Please indicate what features (diversification, return, safety, tax benefit etc) you found attractive.
I can easily invest in term deposits in countries that have higher interest rates than the US.

That's about it. Oh, and I guess that buying local bonds (government & corporate) is usually difficult/impossible even with full-featured US brokers. (For instance, I'm not sure how I'd go about buying UK Inflation-Linked Gilts.)

Honestly, it is almost entirely downsides when it comes to a US citizen living abroad and wanting to invest. US tax law -- foreign tax credit not being applicable to NIIT, more likely to hit AMT issues, PFIC, tax treaties that change, IRS rulings about whether foreign pensions are equivalent -- and foreign tax law -- things like HSA or Roth 401(k)s are unlikely to have any formal decision about how they are treated -- just bring headaches.

Virtually every investment option I've found overseas, I could also access through a good brokerage like Interactive Brokers. The ones that I can't access....aren't really things that Bogleheads would be thinking about anyway.

As a point of comparison, the recommended portfolio for an American expat in The Global Expatriate's Guide to Investing (which another poster mentioned) is:

- 40% US short-term bonds (Schwab's SCHO)
- 30% US stocks (SCHB)
- 25% international stocks (SCHF)
- 5% emerging stocks (SCHE)

That's the same kind of portfolio you'll find in virtually every other Bogleheads-approved kind of book; there's nothing "I'm an expat" about it, really.

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