There are few methods to invest, but what I advise is to apply the Tactical Fund Management, you can reduce the risk of losses and protect your gain.
1. lump-sum investment (not so recommended)
2. Ringgit Cost Averaging (strongly recommended)
3. Asset Allocation
Lump-sum investment refers to invest one shot fund at the price,wait the fund price rises or distribution of dividend. You will very happy while the price appreciate or distribution of dividend. The bad situation is while the price drop below the price you purchase, you only have 2 option: 1st is wait the price go up, 2nd choice top up while the price is lower,because it will average your price. Remember don't panic and sell your fund if you are not urgent for the money. You MUST always remember whenever market crash ,it will come back.
Riggit Cost Averaging(RCA) is suitable for fresh starter.Start with initial RM1,000, after that every month top up RM100, at the end of that, you will purchase at different price with fixed amount of RM100. That means you also will average your price of purchase, when the market boom, you will gain it. When market drop, you also use RM100 to buy, but you may grab more units while. Be in your mind, market sure come to us, you just have to save enough bullet to grab the profit. Unit Trust is long term investment tools.
Asset allocation is to diversify your investment into low risk,moderate,aggresive fund.
Eg. you have RM100k, based on your own risk characteristic, you can put 50% into bond fund, 50% to the equity fund. Because bond fund can provide you low risk(low return) ,and the equity provide you high risk(high return),whenever your equity fund drop, the bond fund still can cover your losses with the gain.
Tuesday, January 17, 2012
unit Trust is a great tools to create wealth over long term
1. You start working,earn some money, and you will try to make use of your hard earned money.Then you will thinking about investment.
2. Saving? Is not a investment, interest is so tiny and is just a place for you to store your money.
3. FD?good and steady, a year around 3.15 % p.a. If your put RM100k, you will get RM3150. But the truth is, inflation is more than your FD rate. That means your are still losing money if you put money in bank.
4. Better solution?stock market? Higher risk bear with high potential return. You can make 20x more than FD or lose 90% of your money in one week. Plus you have to study which stock you want to buy, and you need to buy a few kinds of stock to diversify your risk,maybe one lsoe money,the rest might earn money still can let you earn net profit.
5. Property? Not suitable for fresh starter working people. Property is a good way because the value appreciate after years, usually many times much higher than FD,EPF.
6. I will just talk about what should you know about unit trust, not going to touch too much on the inside(who manage the money, who approve, etc, i am not too sure)
7. Some people(agents) said it is just like FD, you put in money, lump sum or monthly(you want weekly also can), and you earn interest. The concept is somewhat similar but actually there are differences(of course).
8. Services charges apply(one time charge),annual fee charges. Reason"they are not doing charity.
9. UT have risk, doesn't mean you sure get double or triple of EPF interest everytime, you might also lose money in short term. But, usually(note, usually only, not always), you earn more with UT in long term. So, if any agent tell you that garentee got so and so return(eg, garentee 300% return in 15months
) you tell him go back eat oat. Remember, no such thing is easy peasy speedy money.10. Company hired expert to manage your fund, you dont have to go study the stock,listen to the first hand news. They will worry this for you, which stock/bond/equity to invest. And you, just have a peace of mind, put in money and wait, just like FD/ Diversify risk also fund manager will worry for you. Remember, diversify doesn't mean no risk, is minimum risk. You wont lose like you lose in stock market,UT is very slow, you lose money also slowly lose.
11. You can start invest in UT as low as RM1000, you get all the benefit of UT, like diversify risk(what else you can diversify with RM1000 and you can't even buy 1 lot in stock).You can top up as low as RM100.This is very good point, you don't have to work for 10 years to save enough money to invest.
12. UT is a liquid asset. That means you can get it when you need money. Not like property, you have to sell it to get cash.
Unit Trust investor should know before invest!
1. unit trust is not something u can earn quick money, it is a slow but steady investment tool for long term. Not something u can treat it as a gamble.
2. If u don't understand the economy, chances are you are more likely to make a mistake in unit trust investment, which is buying when everyone is pushing the prices high and scared to buy when the market is low. Instead sell when the price is low and suffered huge losses. Don't blindly talk about investment based on your feeling if u don't even understand the economy.
3. When u lost money in unit trust in 1 or 2 or even 3 years, please don't make a conclusion first, u must apply the ringgit cost averaging strategy which means u buy when the market is in the declining or dropping trend.
4. If u apply all the strategy and advice above, you still lost money, then what you should blame is the fund or company itself. Maybe u choose wrong fund in the first place that does not suitable to your investment risk profile.
5. Don't base on your judgement on what u feel, but based on the facts.
6. Don't invest in company or financial products which u don't understand.
7. Treat unit trust investment as a savings but not gamble.
8. Please do read more about investment and financial section in newspaper, because you are the one who make decision in every investment. We Unit Trust Consultant only advise you but don't decide for you.
9. Have confidence in executing your decision. Knowing what should do won't help you to make money, it is the action.
10. Last but not least, be greedy when others are fearful, and be fearful when others are greedy. It always works in shares or unit trust investment and history will repeat itself.
2. If u don't understand the economy, chances are you are more likely to make a mistake in unit trust investment, which is buying when everyone is pushing the prices high and scared to buy when the market is low. Instead sell when the price is low and suffered huge losses. Don't blindly talk about investment based on your feeling if u don't even understand the economy.
3. When u lost money in unit trust in 1 or 2 or even 3 years, please don't make a conclusion first, u must apply the ringgit cost averaging strategy which means u buy when the market is in the declining or dropping trend.
4. If u apply all the strategy and advice above, you still lost money, then what you should blame is the fund or company itself. Maybe u choose wrong fund in the first place that does not suitable to your investment risk profile.
5. Don't base on your judgement on what u feel, but based on the facts.
6. Don't invest in company or financial products which u don't understand.
7. Treat unit trust investment as a savings but not gamble.
8. Please do read more about investment and financial section in newspaper, because you are the one who make decision in every investment. We Unit Trust Consultant only advise you but don't decide for you.
9. Have confidence in executing your decision. Knowing what should do won't help you to make money, it is the action.
10. Last but not least, be greedy when others are fearful, and be fearful when others are greedy. It always works in shares or unit trust investment and history will repeat itself.
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