Defensive Approach in Unit Trust Investment, Switching & Asset Allocation Pilihan

[PerWaris]

Salam

Saya adalah PerwaRis di Carigold dan Putera.com dan amirul_nazri di forum cari. Tujuan saya open 1 new thread adalah kerana my approach dlm handling investment pelabur mungkin ada sedkit beza dpd apa yg korang biasa dengar dan baca dpd UTC lain

Unit Trust is bukan semata2 ekuity fund

Unit Trust juga ada fixed income fund (bond dan money market) yg offer capital preservation dan bg steadier income espescially during volatile environment. My point is, for those yg plan to buy investment in moderate-huge amount espescially by $$, pelabur should consider certain portion to park into fixed income fund, espescially bond.

Fixed income funds are usually invested in bonds and interest-bearing instruments and are generally steadier and offer capital preservation. The expected return for a bond fund should be two to three percentage points above the fixed deposit rate. The risks are significantly lower with bond funds when compared
with equity funds and you should consider them as an alternative to your fixed deposits.

Everyone should invest into bond fund kerana bond fund bg some liquidity in case pelabur need cash on urgent basis.

Unit Trust bukan hanya semata-mata dollar cost averaging (monthly topup)

Practise dollar cost averaging, which allows pelabur to average down by buying more units when prices are low and less when they are high. If pelabur had invested during the market high in 1997 and practised dollar cost averaging, mereka would probably be in the black by now. However, DCA it is not the only way to maximize return dan minimumkan loss...

Unit Trust have switching, as a tool to maximize return dan reduce loss also. Sebelum itu, pelabur kena faham ttg one [1] very2 common trend iaitu apabila ekuity fund turun, maka bond akan naik..ekuity fund naik, bond akan turun.

The strategy is, do switching as on when necessary based on index market movement. In general, when pelaburan ada generate untung, switch all your capital + unrealized profit from ekuity to bond fund (to lock profit), when market drop, re-switch balik to ekuity fund, di mana ur initial investment then would be capital + profit.

Kerja switching nie sebnrnya agent yg kena buat but it your responsibility to remind them as well. Please alert them, get the update on regular basis.The cost involved pula would be minimum as RM 25 (switching fee) and service charge. But fyi, service charge is nothing to loose as the return generated from bond helps to compensate the switching fee. For mutual gold (investment > 100K)...switching is free.


Saya stongly suggest kepada bakal pelabur agar buat asset allocation juga spt di bawah (sumber dpd Public Mutual dan Fundsupermart)

Conservative
Bond 50%
Equity 50%
Rate of Return: 5.6%

Moderate
Bond 45%
Equit 55%
Rate of Return: 6.6%

Agressive
Bond 30%
Equity 70%
Rate of Return: 7.4%

Assuming annualized return of Bond = 6% & Equity = 9%...Annualized return is Effective rate of return, minus tax dan inflation.

saya mengalukan2 feedback ttg post saya nie. Boleh kita berbincang sbb maybe agent lain tak sependapat ngan saya..ttg sesapa nak tahu dgn jelas ttg camna saya gunapakai switching utk dapatkan keuntungan semaksima yg boleh dan reduce loss seminimum yg mungkin,bole email saya di nazri.amirul@gmail.com.insyaallah saya akan show sample akaun clients saya

APa yg saya quote di atas is based on my 3 1/2 years experience jd agent. Difference consultant, different style, difference return..

[PerWaris]

Start Buying Now. Seriously.

iFAST Corporation co-founder and executive director Moh Hon Meng says it’s time to go back into equity markets.


So have investment legends like Warren Buffett, who bought in October, John Bogle, who said in this month that equity markets are too low and Bill Miller, who recently said that he sees great value in equities. (I am nowhere near an investment legend, but I am following their lead).

This is opposed to the doomsayers who say that the worst is yet to come. These doomsayers are … who are they again?
It’s interesting for me that there are always “investment experts” who criticise Warren Buffett. They say he was irrelevant to the new economy in 1999, when he refused to buy technology shares. They say he didn’t understand the situation when he said that financial derivatives were “financial weapons of mass destruction” back in 2002. And now they say that he is simply trying to talk up his own investments, when he said recently to “Buy America”. These things they say of the world’s most successful investor, the world’s richest man. Nobody remembers these “they”, but Warren Buffet continues to make loads of money from his investments.

Let’s look at the reasons why “they” say things will get worse.

“This time it’s different”

You’ve heard this one. “They” say this time it’s different because it’s an unprecedented global economic slowdown not seen since the Great Depression. To this I have two responses:

It’s always different. If it wasn’t different, no one would panic, and no one would sell their shares, and stock markets wouldn’t fall. For example, if a plane slams into a major building somewhere tomorrow, (it would be a tragedy, but) world stock markets would not crash the way it did in the aftermath of September 11th. The Asian financial crisis, tech bubble bursting, Iraq and Afghanistan wars, SARS, sub-prime crisis, they were all different.



It’s never different. What doesn’t change is that the human race has always been able to find solutions to these problems and emerge stronger. This is a unique trait that human beings have. If we did not have this trait, we wouldn’t have evolved as a species. This is one of the reasons world stock markets grow over the long term; we always grow and thrive as a species, and we always find solutions to problems.

“We don’t have clear signs yet that a recovery is in sight”
This is what many analysts say. Again, I have two responses:

If we had clear signs, the stock markets would have gone up a lot, and you would have missed the opportunity to make inordinate profits. Stock markets always anticipate economic recoveries. By the time the analysts are able to report clear signs, we would be more than halfway to the top.



We do have some clear signs of action. We know that these actions are being taken.
Monetary policy actions: We have seen governments across the globe cut interest rates and increase money supply. In recent weeks, we have announcements coming out of the U.S., the E.U., the U.K, Australia, China, Korea and others. These are extremely expansionary.



Fiscal policy actions: More and more governments are injecting billions into their economies. Usually they will do this by funding infrastructure projects, reducing taxes, and so on. This will increase overall demand and stimulate the economy.

In a short time, the global economy will feel the effects of these actions. So yes, we do have a recession. But a lot of smart people at governments all over the world are working frantically to address it.
The fiscal policy actions are easy to understand, but if you always wondered why interest rates have such a big impact, the reason is this: private companies always have expansion plans. They may be reluctant to borrow funds to expand if borrowing costs are high. They will be particularly cautious in a recessionary environment. But when rates decline, many will start borrowing, start hiring and start expanding.

“The recession will extend for another 3 quarters”

This seems to be the consensus economic forecasts. But let’s say this is true. Three quarters means the last quarter of 08 and the first two quarters of 09. Let’s budget another quarter and say it goes on till the end of 3Q 09.
I don’t want to forecast when the economy or the stock markets will recover. But I can say this: the stock markets always recover before the economy does.

Conclusion

Has the market reached a bottom? I feel strongly that either:

We have passed it. October could have been the bottom.
We are very near it. A lot of the bad news has been priced in. Given the very low valuations now, there’s not much downside, which makes the upside over the next two years very interesting.


Do not “punt”. Make sure you invest with money you can set aside for at least three years. This is because:

You don’t want to be caught having to sell at the wrong time.
You need time for the markets to realise its full recovery potential.

This is the time to invest profitably. Seriously.