I have been observing Bhutan Stock Exchange and overall landscapes of investing in Bhutan. It seems people are now realizing the importance of investing.

We can now come across Bhutanese who want to invest and make their money work for them. Our stock market is growing.

Bhutan investment market is quite small. Yet it is equally difficult to come up with a definitive answer as to which is the best investment or what must be in an investment portfolio.

There will never be one-size-fits-all investment in the world. All investors won’t have same objectives and principles. So is the case with investing in Bhutan.

Therefore, I am sharing how I’ll invest my Nu.100,000 in Bhutan, not that it’s the best but because maybe it could be another perspective you can consider while investing Nu.100,000 in Bhutan.

Things I must Do Before Investing the Money

When I have Nu.100,000 at my hand I won’t invest that immediately – it’s not advisable. When I invest, I am letting it away to be locked for at least 5 years or so for possible long-term gains.

This means I must ensure I don’t need that money for quite a foreseeable future. To make sure I’ll not need it, I must have a solid emergency fund and also all debts cleared.

Emergency Fund

It is your savings kept aside to be used only in contingencies – expenses out of unexpected situations which otherwise will dent your finance.

It’s when your car broke down, your parents fell sick and you need to look after them or conduct rimdros, and to put food on table if you lose your job.

It’s kind of an insurance. You shouldn’t care much about its returns. The main objective of it isn’t building wealth.

It just must be ready and easily accessible whenever you need it, that’s all.

So many personal finance bloggers recommend keeping three times of your household monthly expenses.

But personally I feel that isn’t a rock solid. I won’t feel secured with that much. I keep 8 times of monthly household expenses.

Only you can decide for yourself. If it’s too high, you may miss possible investment growth. If it’s too little, you may run out of money when you need the most.

No Unpaid Debt

You shouldn’t have uncleared debts prior to investing. If you have unpaid personal loans, credit card debts, car loan, staff welfare fund loan etc, your investing won’t make any sense.

I read that investing with an unpaid debt is like running a marathon with your legs tied together. Makes sense. Right?

It goes same with investing using a loan or borrowings. My friend took a loan during share auction last year. When he needed the money later, he sold at a loss. You shouldn’t be like him.

Some Possible Investment Options in Bhutan

Nu.100,000 is too less to invest in properties like buildings and land. It’s too risky to lend to my friend or start a partnership business. There is no P2P lending in Bhutan.

Though I can invest in a business, it won’t be of much difference. This means I can invest my Nu.100K only in some of the following:

1. Shares of public companies
2. Bonds of corporate Bodies.
3. Sovereign Bonds of Govt.
4. Precious metals like Silvers.
5. Bank Fixed/Flexible Deposit

You Must Consider Your Investment Goals

We got a list of investment to put my Nu.100,000 in Bhutan. Now let me categorize them based on the investment goals.

Growth Investment

This is an investment class which has a better potential to grow in value and then give you capital profits.

If your investment goal is for value growth, you can invest in this kind of investment class.

But most of the growth investments come with higher risk. They might grow 10X or become zero.

In above list, shares especially that of new or startup companies will be the growth investment.

In Bhutan Stock Market, shares of Sherza Ventures Ltd will be a growth investment. It has potential to 10x but also a risk of going zero.

All investments have certain risks. If you’re investing in Bhutan, do it in a Bhutan Stock Index Fund model to reduce the risk.

Income Investment

The Income Investment is intended to provide regular income with lower degree of downside risk as well as upside growth.

This class of investment is for people who need regular income, cannot take risk, or retirees who don’t have time to ride over the investment market volatilities.

Since risk is comparatively lower in this class of investment, it won’t give much return. But your money will be safer.

Certificate of Fixed deposits (CFDs), shares of matured companies, and bonds are some examples of income investment.

How to Pick Which Investment Class to Invest

I have already mentioned that there is no best investment. It depends on you – the investor.

How Much I Have

I’ll have limited choice of investment if my investable fund is less. Think of someone who has Nu.100 million investable funds. He can invest in properties, stock, bonds, and even in cryptos.

Investable fund less than 500K: Bank deposits, shares, business…

Investable fund is above 500K: Properties, stock, bonds, cryptos…

Investment Goals

This answers the question of why you invest in the first place. We have looked into two broad investment goals. Let us consider more specific situations:

• Fund to purchase an apartment in Thimphu.
• Financial security for your retirement years.
• Education expense for your child in 8 years.
• An extra regular income to live in Thimphu.

You might want any or all of the above. Some invest just to preserve the capital and keep it ready for unexpected opportunities.

Investment Time

Investment time here means the duration within which you can keep your money invested. Time horizon is very important for investment.

Therefore, they encourage investing when you are young because young investor will have a longer time horizon. Compound interest will be in his favour.

Investment time or age of the investor is inversely proportional to his or her ability to take risk as shown below:

A young investor can afford to take risk as he will have time to learn and grow in the market.

Someone living a retirement life cannot invest in cryptos like a teenager investor can do.

Risk Tolerance

Investors can be risk takers or risk averse. Risk takers will invest in things that have huge upside potential but with higher risk.

Capital growth is important for risk takers.

But in another hand, risk averse people will invest in safer things like bank deposits, bonds or shares of matured companies.

Capital safety is important for risk averse.

However, just because you are risk taker doesn’t mean you can afford to take risk and vice-versa.

A young investor can afford to take risk even if he is risk averse. Similarly, a retired person cannot afford to take risk even if he’s a risk taker.

Passive or Active

It’s whether you have to give your constant attention for the investment. If you’re into stock investing and trading, you have to remain updated about sock market, economic policies, company policies, reports etc.

But if you keep in bank deposit and bonds, it is locked and in most of the cases you don’t have to do anything until the maturity.

People who have time to spare can invest where constant attention and monitoring are required. ETFs and passively managed index funds are passive investments. Bhutan doesn’t have one yet.

Conclusion: My Nu.100K Investment Sample

I am 33 years. This means I can adequately stomach market volatilities and also afford to be aggressive on growth investment.

Since I don’t need regular extra income, I shouldn’t be conservative and invest all in income investments like bank deposit, bonds or shares of matured companies.

Bhutan doesn’t have avenues to invest in cryptos. So, the farthest I can go for growth is investing in new and small companies of Bhutan.

I will divide my investable fund Nu.100,000 among above six companies in the ratios of their market values in the total capitalization. It’s as shown it below:

Every month I’ll add Nu.5,000 in the same ratios. I will invest unexpected income like bonus, DSA, LTC etc in some of the matured companies as with age, I shouldn’t keep all in the growth investment.

My aim is to have fund from this portfolio enough to construct a house back at home.

I’ll keep them untouched as far as none of the individual stock changes more than 10% like in Bhutan Stock Index model of investing.

This is how I’ll invest Nu.100,000 in Bhutan. The rationale can be same even if the fund is 200K or 900K. Do you have a different idea? 

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