How To Buy Stocks In Hong Kong (Overseas and Local)
These days, saving your money isn't always the best way to secure your future. If you are going to be staying in Hong Kong for a few years and want to make your money work for you, it might be time to think about investing in the stock market. Of course, you need some liquid funds for emergencies, but after that, you should be looking to put your money somewhere where it can grow. It involves a bit of risk, but, as the old saying goes "No risk, no reward". The best place we think that you can put your money to work for you is in the stock market, but how do you do that in Hong Kong exactly?
The simplest way to buy stocks is to open an investment account with your local bank. You can do it with most local banks, and the one that comes recommended most often is HSBC. You will need to go there in person to open an account and, whichever bank you choose, you will need to have a savings/current account with them because that's where they will withdraw/deposit your funds from when you buy/sell stocks. Once all the paperwork is signed, it's a matter of days before you can start buying and selling stocks.
What Do I Need To Know Before Investing In Stocks?
We recommend that you do your research and understand what it is that you are getting into as this is your hard-earned cash we are talking about! There is plenty of material out there for you to devour on the subject and we'd like to recommend a few that we have read ourselves that have provided great insight into the investing world.
Ignoring the goofy name, a great place to start is Investing for Dummies by Eric Tyson. It's a great book to dip your toe in the water of investing and does a fantastic job explaining what investing is. Once you have read that, we'd recommend you check out Thomas. J. Stanley's The Millionaire Next Door. It's all well and good making money, but if you can't keep it, you're doomed. This book does a great job of giving you the mindset of a millionaire. The reason why people stay rich isn't because of their constant spending, but on wise investments that make them money or at the very least, keep the expenses down way low. If you fancy stretching yourself a bit and want to gain real insight into the stock market, you could delve into Common Sense on Mutual Funds by John C. Bogle. This book might have you reaching for the dictionary a few times, but it gives you such peace of mind to read something from someone so educated as John C. bogle. Real insight. If you want a more relaxed take on the stock market, you could check out A Random Walk Down Wall Street by Burton G. Malkiel. This book does an excellent job of educating you on the multiple perspectives of investing and shows you that no one can beat the market. Our last recommendation is a more recent book by Tony Robbins called Unshakeable and distils a lot of the wisdom found in the previous books we have recommended, which, by the way, are all books we have read and loved. If we are completely honest, Common Sense on Mutual Funds took a bit of time for us to love, ha!
*Note - All books listed are non-affiliate links.
Does It Cost Anything To Invest?
There is no cost for opening an account, but banks will undoubtedly be looking to take their slice of the cake, and they do this by imposing fees. Each bank operates slightly differently, but you will be able to find most of the information you are looking for on their website. Using HSBC as an example, they have their fees listed here, so you have a good idea of what buying, selling and keeping stocks is going to cost you. While we aren't financial advisors, we recommend that you look over the fees carefully and call the bank if you don't fully understand all the jargon they use.
Should I Use A Broker?
If you are a little more confident, you could try using a broker if that is more your speed. There are many brokers in Hong Kong that you can use such as Saxo, Charles Schwab and Interactive Brokers, to name a few. If you do decide to use a broker, do your research and make sure they are right for you. People like to use brokers because they typically offer more options. Compared to banks like the HSBC, if you use a broker, you could invest in things like currencies, metals, hedge funds, and so on.
Can I Buy U.S Stocks?
The name of the stock exchange in Hong Kong is The SEHK ( The Stock Exchange of Hong Kong Limited), but some people might want to invest directly in other markets, and the banks here do support some of them. If you don't want to buy stocks traded on the local stock exchange, you can buy ones sold on the U.S stock exchange, and banks have U.S accounts that you can open just for that purpose.
What Are The Alternatives To Investing In The Stock Market?
There are many investment opportunities in Hong Kong that you can take advantage of depending on what it is you want to achieve. Some people invest in the property market, but that is very expensive in Hong Kong, and many professionals consider it a bubble, so be careful. Most people in Hong Kong can't even afford a home, let alone one to rent out to others as a source of income.
You could start your own business if you fancy a bit of hard work and toil to make it all happen. It isn't uncommon for teachers to open centres or go into private teaching, which can be pretty lucrative if done right. There is also the option of selling your worksheets and curricula that you have created on places like Teachers Pay Teachers. If you do want to start up your own business, Startupr.hk has a blog post all about it.
What should I do now?
Well, we think the best course of action is to start reading and learn about what it is that you want to invest in. Being teachers ourselves, We know teachers are resourceful, hard workers, who know how to plan for success. We wish you the very best on your journey and do drop us a comment below to let us know how you are getting on other there in the big, wide world.
Disclaimer* We are not financial professionals offering investment advice, we are simply teachers. Please seek the help of a financial professional to help you cover all your investment needs.