As an international financial center, Hong Kong market has provided wide selection of a wealth management products to meet individual investor’s requirement. In addition, there are also countless investment vehicles such as stocks, funds, and debt instruments to be chosen by the experienced investors. Hong Kongers are not only property loving investors but are also keen to invest in financial tools. Consequently, they fulfil their strategy to diversify investment risks.
The writer's friend is a general local investor. Indeed, he brought his self-use home and investment properties in the early years, but he still invests in stocks and funds in his spare time. In terms of asset allocation, his financial investments' value represented about 20% of the total asset allocation.
The above-mentioned investor started to buy 
different funds for long-term investment more than 30 years ago. After a few years of his initial buy-in, he found that the rate of return was too low. In his portfolio, one-half of the funds suffered losses. Funds with the profit margin had an annual growth rate of less than 4 to 5%, but these funds' annual management fee is 3%. In profit and loss account, the net cash flow was almost zero. For all those funds with losses, fund's managers still charged the management fees from the stakeholders. If the investment loss is 5%, a cumulative loss plus management fee would rise to 8%. The yield of these funds were much lower than expectation, so my friend finally sold all these funds with losses of more than 20%.
With this failure investment in funds, this investor began to invest in Hong Kong stocks since 2003. In the first five years of investment, he focused on short-term speculation. As a result, he had successfully doubled the investment principal until 2008. In reference to the Buffett's value investment theory, he had changed his strategy to long-term holding afterwards. Initially, most of the investments recorded positive return and then turned into negative lately. Consequently, his stocks investment still recorded losses one year ago.
This investor did record investment losses in funds and stocks. On the contrary, his investments in real estate has earned a lot of capital. He purchased his self-use premises 25 years ago, and capital gained has reached six times so far. Moreover, he also invested in residential properties in China and Canada ten years ago, and the capital acquired in mainland China and Canadian properties were more than tripled so far.
The investor is approaching retirement age today, and he does not want to invest in the financial stock market anymore. Nowadays, he is planning to sell a few overseas properties and continue to hold part of these properties for long-term investment. He said if he didn't focused on investing in property, he will likely have no assets in this old age now.
