MUTUAL SUCCESS

Why Read the Mutual Fund Prospectus?

2010-10-04T21:20:00.000-07:00

A mutual fund prospectus is to a mutual fund what an owner’s manual is to a car. If you want to learn more about what’s under the hood of your mutual fund, check out the prospectus.

If you purchase a mutual fund, you’re assured to receive a prospectus. The SEC requires the fund company to provide you with a prospectus upon purchase of the fund. This prospectus can be quite daunting as it is full of legalese, numbers and jargon. But don’t be so fast to toss it out. The mutual fund prospectus is a valuable tool that contains important information.

Key Information in the Prospectus

Investment Objectives -- The goal of the fund is defined in the prospectus. Each mutual fund has a different goal. One fund may have a goal of income with preservation of capital while another fund’s goal might be long-term capital appreciation.

Investment Strategy -- The prospectus details the strategy of the mutual fund. Does the fund invest in stocks and/or bonds? The strategy section will describe if the fund is focused on US investments or international investments or a combination of the two, known as global investments.

Shareholder Information -- The prospectus provides information relating to the purchase and redemption of fund shares. Minimum account balances and tax consequences of buying, selling, holding, or exchanging shares of the fund are listed in this section of the prospectus.

Risks -- The prospectus describes the risks associated with investing in the fund. If the fund invest in equities, for example, prospectus will discuss risks of investing in the stock market. The prospectus will also list risks of investing in the particular strategy of the fund. For example, the prospectus for the US large cap fund Vanguard 500 Index reads: “Large-cap stocks tend to go through cycles of doing better -- or worse -- than the stock market in general. These periods have, in the past, lasted for as long as several years.” You should read about, and understand, the risks of the fund prior to investing.

Performance Information -- You will find performance information sliced in many ways in the prospectus. The total return for various time periods since inception including: calendar year returns, trailing period returns (1 year, 3 year and 5 year, for instance), and both before tax and after tax returns. The performance data is based on formulas set forth by the SEC which allows you to compare performance from one fund to the next with confidence that you are comparing apples to apples. There is probably no reason for me to mention that past performance doesn’t guarantee future performance (but we can hardly discuss performance without the caveat).

Fees and Expenses -- The prospectus lists the shareholder fees and the annual operating expenses of the fund. The shareholder fees consist of sales charges and redemption fees. The operating expenses -- also known as the expense ratio -- include management fees and 12b-1 fees. The prospectus also includes a hypothetical investment and the impact these fees and expenses would have on the hypothetical investment over time. The hypothetical example will allow you to compare the costs of investing in one fund covered by the prospectus versus costs of investing in other mutual funds.

Financial Highlights -- The financial highlights section of the prospectus includes audited data that is derived from the fund’s financial statements. The data is listed in a table and includes a reconciliation of the beginning period net asset value and ending period net asset value (for five calendar years). In other words, what was the fund worth at the beginning of the year, how much did it earn, what were the charges, and how much was the fund worth at the end of the year.

WHY WE SHOULD IN MUTUAL FUND

2010-09-17T00:51:00.000-07:00

Before we plan to buy mutual funds, always take a step to understand the pros of mutual funds. This is to ensure how the investment could benefits us and know how to avoid the pitfalls.

There are many reasons to buy a mutual fund. Here are some of the reasons:-

1. Mutual Funds Offer Diversification
The beauty of a mutual fund is that you can buy a mutual fund and obtain instant access to a hundreds of individual stocks or bonds. Otherwise, in order to diversify your portfolio, you might have to buy individual securities, which exposes you to more potential volatility.

2. Mutual Funds are Professionally Managed
Many investors don’t have the resources or the time to buy individual stocks. Investing in individual securities, such as stocks, not only takes resources, but a considerable amount of time. By contrast, mutual fund managers and analysts wake up each morning dedicating their professional lives to researching and analyzing current and potential holdings for their mutual fund.

3. Mutual Funds Come in Many Varieties
A mutual fund comes in many types and styles. There are stock funds, bond funds, sector funds, target-date mutual funds, money market mutual funds and balanced funds. Mutual funds allow you to invest in the market whether you believe in active portfolio management (actively managed funds) or you prefer to buy a segment of the market with no interference from a manager (passive funds and index mutual funds). The availability of different types of mutual funds allows you to build a diversified portfolio at low cost and without much difficulty.

4. Mutual Funds Have Low Minimums
Many mutual fund companies allow investors to get started in a mutual fund with as little as RM1,000. Investors can add their premiums as low as RM100 monthly depends on their objectives.

5. Systematic Investing and Withdrawals with Mutual Funds
It is simple to invest regularly in a mutual fund. Many mutual fund companies allow investors to invest as little as RM100 per month directly into a mutual fund. Money can be pulled directly from a bank account and invested directly in the mutual fund. On the other hand, money can be regularly withdrawn from a mutual fund and be deposited into a bank account. There are generally no fees for this service.

6. Mutual Funds Offer Automatic Reinvestment
An investor can easily and automatically have capital gains and dividends reinvested into their mutual fund without a sales load or extra fees.

7. Mutual Funds Offer Transparency
Mutual fund holdings are publicly available (with some delays in reporting), which ensures that investors are getting what they pay for.

***Note: Please do contact me at 0126624231 or PM if you need anymore details especially investing in Public Mutual. Thanks

Professional Investment Management

2010-08-11T01:29:00.000-07:00

A unit trust combines the capital of many investors to employ experienced management in purchasing securities of many companies. The management of a unit trust provides diversification of investments and supervision which few investors could individually afford. Investment management is a full time job requiring specialized knowledge and training. It involves the study of a variety of factors.

Some of the factors which have to be examined are,
1. Comparisons of all industries in the economy
2. Relative studies of companies within a promising industry
3. Personal contact with management of promising corporations
4. Evaluating the effect of international events, both monetary and political
5. Determining the results of government policies on each industry

Professional management is also interested in studying less obvious factors such as wage rates, which might affect the economy or the profitability of certain companies or corporations. It requires careful study of individual companies within the industry to determine which of the many companies offer the best prospects for the investors. It requires comparing this company with the best companies in other promising industries. Since all this factors are constantly changing, re-evaluation and study have to be continuous.

Public Bank net profit better than market projection

2010-02-02T23:56:00.000-08:00

KUALA LUMPUR: The country’s third largest bank by assets, Public Bank Bhd, saw net profit rise 3.7% to RM678.23mil for the quarter ended Dec 31 compared with a year ago on higher loans and deposits growth. Revenue for the quarter came in at RM2.49bil.

For the financial year ended Dec 31, 2009 (FY09), net profit was down 2.47% to RM2.51bil on revenue of RM9.71bil, which was 7.47% lower than FY08 after taking into consideration a one-off goodwill income of RM200mil in respect of the bancassurance distribution alliance with ING Asia/Pacific Ltd.

Excluding the one-off income, the bank’s underlying operating pre-tax profit improved by 4.5% for FY09 compared with FY08.

According to analysts, the bank’s net profit was above market expectations. The market had projected a net profit of RM2.41bil but net profit for FY09 came in 4.14% higher.

Earnings per share (EPS) for FY09 stood at 73.3 sen with the EPS for the quarter under review at 19.7 sen, representing a quarter-on-quarter uptrend with net return on equity at 26.1%. The bank also declared a second interim cash dividend of 25 sen less 25% tax and a share dividend to be distributed from treasury shares on the basis of one share for every 68 existing shares held.

OSK Research Sdn Bhd analyst Keith Wee said in a report that restraint in future dividend payout and concerns over the need for additional capital and hence more subdued returns on equity growth would likely cap share price performance in the immediate to medium term.

He said the bank’s management had indicated that future dividend payout ratios could be at a more realistic 50% to 55% (versus the 79.3% payout in FY09) due to the lean core equity capital and potential increase in new regulatory requirements under Basel III.

According to chairman Tan Sri Teh Hong Piow, whose note on the financial results was read by managing director Tan Sri Tay Ah Lek at a media briefing yesterday, the bank’s improved profit was attributable to continued strong growth in net interest and financing income, up10.2% to RM4.71bil.

Teh said this was despite the negative impact on net interest margins arising from the reduction in the overnight policy rate on three occasions between November 2008 and February 2009.

He added that loans grew by 14.4% to RM137.6bil supported by domestic loans and advances, which expanded strongly by 16.8% driven mainly by residential property, passenger car and commercial financing to small medium enterprises (SMEs), making up 78% of the loan portfolio as at the end of 2009.

Teh said domestic loan approvals and loan applications for the year advanced 21.9% and 26.3% respectively compared with FY08. “Housing loan approvals were particularly strong, recording an increase of 39.3% in 2009,” he said.
Meanwhile, Tay said there were no immediate plans to acquire any banks despite the current spate of news on mergers and acquisitions in the local banking scene.

“We plan to open new branches in 2010, with two more in Hong Kong, one in Shenzhen, five in Cambodia, two in Vietnam and one in Laos,” he said, adding that overseas operations contributed 7.2% to pre-tax profit last year.

Tay said there were plans to increase overseas contributions to 15% over a three- to five-year period. “Overall, the bank is targeting loans growth and advances of 14% to 15% or RM20bil for 2010 with contributions from residential property, passenger car and SME financing remaining the main sources of growth,” he said.

Tay said net interest margins were expected to remain stable due to a stable interest rate environment, steady demand for loans and ample liquidity in the system. “We expect the overnight policy rate to remain low as inflation is low and there is a need to support the economic recovery,” he said.

Public Mutual: Malaysian equity market fairly valued

2010-02-02T23:44:00.000-08:00

MALAYSIA'S stock market valuations look stretched but builders and exporters may shine, helped by a recovering economy at home and abroad, said Malaysian fund manager Public Mutual.

The country's biggest private fund management firm, with RM34.3 billion in assets under management, is bullish about equities in China, Australia and Singapore, said chief executive officer Yeoh Kim Hong.

"In terms of valuations, the local market is fairly valued," said Yeoh.
Malaysia was one of the worst-performing stock markets in Asia last year, ranked fourth from the bottom. The country's benchmark share index is trading near its 10-year average price-to-earnings ratio of 16.7 times, Yeoh said in an e-mail interview.
Public Equity Fund, which invested mainly in Malaysian stocks, outperformed the FTSE Bursa Malaysia KLCI index over the past 12 months, with a total return of 59.4 per cent, compared with the index's 48.4 percent return during the same period, data on Public Mutual's website showed.

For 2010, investment themes are expected to be centred around the country's economic performance, said Yeoh."Investment themes in Malaysia include beneficiaries of the pick-up in construction activities, resources stocks as a hedge against inflation and selected export driven stocks on the back of a recovery in global demand," said Yeoh.

Trade-dependent Malaysia may see its gross domestic product (GDP) expand by 5 per cent in 2010 after shrinking by an estimated 3 per cent in 2009, a Reuters poll on 15 economists showed this month. Public Mutual holds 30 million shares in palm oil exporter IOI Corp on the Malaysian stock exchange, Thomson Reuters data showed.

It also owns 8.6 million shares in IJM Corp, the country's largest construction company by assets. Elsewhere in Asia, Yeoh said her firm likes China, Australia and Singapore. "Despite the Chinese government's recent tightening measures to slow credit growth, we are optimistic about the long term prospects for Chinese stocks," said Yeoh. "We are also positive about the outlook for Australia and Singapore which are positioned to benefit from the anticipated global economic recovery," she said.

In terms of sectors, Public Mutual prefers consumer, infrastructure and natural resources stocks in the region, she said. Yeoh said her firm will be selective in investing in Asia's telecommunications sector, which had underperformed in emerging as well as developed markets in the past year. "Broadly, the growth prospects for telecommunications companies are constrained as penetration rates are
generally high in most major markets," she said. "Telecommunications stocks tend to be perceived as yield plays and laggards during an economic recovery," she added.
Public Mutual has about 60 million shares in Malaysia's Axiata, which owns telecommunications assets in many fast-growing markets such as Sri Lanka, Indonesia and India.

The fund manager also owns 5.96 million shares in DiGi.com, the smallest mobile provider in Malaysia. -Reuters

NOTE:Copyright © The New Straits Times Press (Malaysia) Berhad, Balai Berita 31, Jalan Riong, 59100 Kuala Lumpur, Malaysia.

Selecting The Right Unit Trust - How Do I Find A Unit Trust That Fits My Objective?

2009-12-07T17:05:00.001-08:00

It used to be simple selecting a unit trust. Today, there are a multitude of different unit trust funds available in the market that making that choice is no longer easy. Perhaps a simpler way is to first identify your investment objectives. If you want your money to grow a larger sum in the future to pay for an objective and your risk tolerance is higher, you may choose a growth fund to do the job. On the other hand, if you need an ongoing income stream to pay for expenses and your risk tolerance is low, a better choice would be a bond fund. You may have different investment objectives, risk tolerance and time horizons at any one time, which warrants owning a mixture of different unit trust funds for different investment purposes.

Why Should I Start Investing Today?

2009-12-07T16:58:00.000-08:00

Today's decision should depend on tomorrow's needs. There is a direct relationship between the amount of money you need to accumulate and the number of years you have to do it.

For example, if you plan to have a RM120,000 education fund within 20 years and expects an annual rate of return of 12 percent, you have to invest only a little over RM120 a month. Wait another 5 years, you will need over RM240 a month. Procrastinate another 10 years, you will have to put in almost RM1,470 each month!

Time can be a real asset when planning for a child's education or our retirement. The more time we have to save, the fewer ringgit we need now. Do not let time slip away.

Benefits investing in Balanced Fund

2009-10-08T18:17:00.000-07:00

Main benefit investing in Balanced Fund:-

1) More Stable Return
The overall portfolio risk of balanced fund is reduced because the returns of the equity and bond investments are generally not positively correlated. The potentionally higher but more volatile returns from equity investments are moderated by the fund's investment in bonds. As a reult, the returns of a balanced fund should be less volatile than a conventional equity fund.

2. Rebalancing
Another benefit of balanced fund is that in times of rising markets these funds 'automatically' rebalance the portfolio by taking profits on equity investments which have appreciated and rebalancing the portfolio to its original equity; bond asset allocation of 60:40. Thanks to this rebalancing process, the unit trust investor need not worry about when to take profits on their investments.

3. Capital Growth
A balanced fund will allow the investor to participate in the long term capital growth of equity markets because a sizable portion up to 60% of the fundis invested in equities.

In conclusion, balanced funds are suitable for medium to long term investors with conservative to moderate risk reward temperament with a preference for receiving income and a respectable measure of capital growth. Investing in a balanced fund helps unit trust investors stay focused on achieving their long term investment goals wiyhout requiring them to evaluate the prevailing market structure.

How to Invest in Mutual Funds

2009-09-28T18:33:00.000-07:00

If you do not have the time devote to an active stock investment, but would still like to take advantage of the portfolio diversification benefits of owning stocks, then investment in mutual funds is the vehicle for you.

Below is a how-to-guide for investment in mutual funds. Evaluate your list according to the following: accessibility, customer service, exit strategies, rate of return, and management integrity.
1. Shop around. Ask your bank if they have mutual funds products. Whether they do or
don’t, ask for recommendations. Your bank knows a lot of other banks and
financial institutions which offer the same product.

2. Compare and contrast the choices. Analyze the relative performance of the banks
and mutual funds companies in your list. The following can be used as criteria.
• Accessibility of their product – how much is the minimum investment
requirement? How much is the minimum additional funds to the account?
• Levels of customer service – how fast do client concerns are addressed? Is
there a team dedicated to answering investment questions? Do they provide
investment advice to small investors?
• Exit options – what are the restrictions for fund withdrawals? How much are
the charges? Can funds be withdrawn anytime?
• Rate of return – what s the historical rate of return to-date? Last year? 2
years? 5 years? Are the returns consistent with or above the industry?
• Integrity of managers – are the fund managers trustworthy? Is the investment
composition of the fund aligned with its objectives and conditions?

First, eliminate the mutual funds that have very high initial investment requirement. Say Mutual Fund X has an initial investment requirement of $100,000 while you only plan to make an initial investment of $1,000. Second, you would want to be in a company that you can afford, but still feel valued no matter what your net worth is – after all, this is an investment in mutual funds not private banking. Then, your next criterion is whether the fund allows you to take out your money anytime. No matter how accessible the fund is and how accommodating the staff is, if you can not withdraw your money when you need it, then it is not a good choice.
After paring down your choices to the most accessible friendly funds, then you have to evaluate the rates of return. Choose the funds that will give you most value given your preferences. After which, check management integrity – although a fund may report a high return, if its management team is less than exemplary, then its reported return is suspect.

Mutual Fund Investing with Style

2009-09-28T07:55:00.000-07:00

When deciding to invest in a mutual fund (or any other investment), it is generally accepted that a diversified portfolio reduces risk over the long term. The readers would have also come across findings and assertions along the lines that stocks do better than bonds over the long term, small cap stocks can be more rewarding than large cap stocks, junk bonds are riskier than treasuries, etc. What do all these terms mean? In this article, we will review the concept of a mutual fund style that can help visually illustrate these concepts and aid in developing a diversification strategy.

There are two basic style that we need to understand. One is for the stocks and the other is for the bonds. The key attributes that a stock stylebox reflects is the size of the stocks (in the fund) and the valuation of the stocks (in the fund). The bond (or fixed income) stylebox on the other hand reflects the credit quality of the bond and the duration of the bond (maturity).

Here are The Top 10 Reasons for Mutual Funds

2009-09-10T19:26:00.000-07:00

1. Selection. You can select from thousands of funds to suit your needs and you can get information on them easily. Most credit unions have information, and your local library is a goldmine? The Internet…

2. You Can Start Small. Most mutual funds will let you start with less than RM1000, and if you set it up for automatic deposits, some helps in saving of RM100 monthly I’ve spent more than that in a restaurant! There is NO reason not to consider this!

3. Simplicity. You deposit 10% of your income every month. Just pay yourself first, then pay the mortgage, then pay everyone else.

4. Professional management. I don’t always have time to research, select, and monitor individual stocks. So, I pay a professional a small fee to do it for me. A good fund manager will make you rich!

5. Compound interest. Depending on what index you pick, the Malaysian stock market showing good improvement and growing for the past 10 years. The market fluxuates (volatile) but the beauty of this is, you don’t care! Over 10, 20, or 30 years, the system works every time!

6. Dollar-cost-averaging. The details are complicated, but by investing every single month, whether the market is up or down, you get a tremendous boost from the mathematics. Your average cost will always be less than the average price you paid! And that is money in your pocket!

7. Diversification. A broad-based growth fund typically invests in dozens of companies in different industries, sometimes even in different countries around the world. If one stock goes down, hopefully dozens of others will go up. There is excellent protection and sound risk management built-in to these funds.

8. Specialization. If you prefer, and if you do the research, there are funds that invest in only a very small number of companies. If you can accept the additional risk, you can invest in one particular industry, or one country, or in companies of a certain size or that are environmentally responsible. This specialization offers the potential for even greater profits, but it can also bring greater potential risk. Study before you invest!

9. Fund Families. Most mutual funds are offered by management companies that sponsor several different funds, with different objectives. They make it easy to move your money between funds, so as your goals change, you can adjust your investments with a quick phone call, or on the Internet.

10. Momentum. Once you get started, your enthusiasm builds. Once you have money in the market, you’ll track it, manage it, and in all probability, your desire to save will increase. If you’ve had difficulty saving in the past; START! Those monthly statements will be positive reminders to do even more. Yes, you should invest in tax-sheltered retirement plans first, and yes, there are other investment possibilities. And yes, there is some risk, because the market can go down. But to retire wealthy, pick a great, long-term growth fund, invest regularly, and let the system work for you!

The key, as always is: GET STARTED!

Mutual Fund Investing with Style

2009-09-10T19:19:00.000-07:00

When deciding to invest in a mutual fund (or any other investment), it is generally accepted that a diversified portfolio reduces risk over the long term. The readers would have also come across findings and assertions along the lines that stocks do better than bonds over the long term, small cap stocks can be more rewarding than large cap stocks, junk bonds are riskier than treasuries, etc. What do all these terms mean? In this article, we will review the concept of a mutual fund style that can help visually illustrate these concepts and aid in developing a diversification strategy.

There are two basic style that we need to understand. One is for the stocks or Equity and the other is for the bonds. The key attributes that a stock stylebox reflects is the size of the stocks (in the fund) and the valuation of the stocks (in the fund). The bond (or fixed income) stylebox on the other hand reflects the credit quality of the bond and the duration of the bond (maturity).

Review of Current Market

2008-11-24T19:38:00.000-08:00

Hi All,

Here are some information on world market reviews:-

The DJIA closed +396.97 points after US government’s plan to bailout the Citigroup.The fluctuation of mkts have stabilized without the mad swings and crashes before this. US President has formed his economic team with NY Federal Reserve President Tim Geithner as Treasury Secretary to help US to recover in his 2 years stimulus package.

Europe markets closed within 5-10% positively.

Malaysian economy situation now compares to 1997/2001 is a lot better with 2.5% NPL and 75% loan ratio. Band Negara has lowered the overnight lending rate to 3.25% after 5 years. Well-timed as the economy slows down and in line with others. This will lower the cost of fund to the bank and cost of borrowing to the consumers. Certain sectors that export to US are affected like Seagate but Banks 3rd quarter reports still profitable.

In recent FMUTM annual Convention, it was pointed that Asia is not decoupled from US but actually we are more integrated than before. However, from 2004 to 2008 when US decelerated, Asia accelerated. With 3% US growth (optimistic) and Asia’s 7% growth (conservative), for every USD1 US is spending, Asia is spending 93cents. In 2010, Asia will catch up USD1 to USD1 (not in 15-20 years’ time as thought earlier). Conclusion is:- Same Train but Asia will be the Locomotive to drive the world growth in future.

What do you all think forward?

1. Invest in Unit Trust investment fund
2. For existing investors, you may choose either (1) investing a portion into existing funds and balance on monthly instruction (RII/DDI) or (2) one lump sum now.

For new investors, they are lucky to invest their funds in current market valuations which are below historical averages. Investment put in now will have higher growth than earlier investment. When markets recover, the existing investment will go back to around 8% pa CAGR and new ones may see 12-13% pa growth, say in 3-5 years time.

Some Advices for Investors on How to Behave Now

2008-10-23T19:24:00.000-07:00

Times are tough. During these chaotic times, the principals of proper portfolio management are crucial:

1. Don't sell into fear
2. Rebalance your portfolio to buy equity
3. Continue dollar cost averaging
4. Inject cash if you have it

***********************************************

The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So ... I've been buying American stocks. This is my personal account I'm talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

Why?

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation's many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Let me be clear on one point: I can't predict the short-term movements of the stock market. I haven't the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor's best friend. It lets you buy a slice of America 's future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

Today people who hold cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts. |

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky's advice: "I skate to where the puck is going to be, not to where it has been."

I don't like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I'll follow the lead of a restaurant that opened in an empty bank building and then advertised: "Put your mouth where your money was." Today my money and my mouth both say equities.

Source: Warren Buffet, "Buy America. I Am.", New York Times, 17th October.

Mutual Funds as a Long Term Investment

2008-10-07T22:41:00.000-07:00

Mutual Fund is actually meant for a long term investment. the duration could in the range of 3-25 years depends on investors objectives.

Mutual fund is a collection of stocks, bonds or money market securities, which have been bundled together in one offering based on not only the goal, but the past performance of the individual components. They are taken as a whole, and as such, when some of the holdings in a fund rise, others may be falling, so the growth potential is not as extreme as, say, just one stock or bond. Over time though, mutual funds, can grow up to 8-9% a year, while the stock markets can gain anywhere from 10-11%.

There are a variety of mutual funds that an investor can invest;Equity Funds, Balanced Funds, Money Market and Bond Funds.

There are some terms associated with Mutual Funds that the investor should be aware of. The first is the Net Asset Value, or NAV, for short. The NAV is a calculation that takes the Funds total assets and minuses the total liabilities. This calculation is done daily, at the end of trading, to reflect the true value of the Fund.

Another term is liquidity, which is used to describe the amount of time it takes to convert the investment to its cash equivalent with the minimal amount of fees or price discount. Mutual Funds are not known for being liquid, that's why we started out saying that they are a long term investment.

One of the most important factors in dealing with Mutual Funds is the Prospectus. The prospectus is a legal document that contains information about the Mutual Fund, such as what holdings are invested in, what the goal of the fund is, what the past performance of the fund, listing of fees, the manager of the fund, the risks of the fund, and the strategy to achieve the optimal investing balance. Anytime you have a question about a Mutual Fund, you can always refer to the Prospectus, and you can always have one mailed to you, or made available to you through download, when searching for a Mutual Fund to invest in.

Advantages Of Mutual Fund Investing

2008-10-07T22:32:00.000-07:00

Mutual funds are growing dramatically over the years to the point where it's harder to find an investor who is not using mutual funds. The popularity of mutual funds is no surprise when you consider that they are one of the easiest investments to use and require very little knowledge of the financial markets. There are few advantages that mutual funds can offer every single investor:-

1st
Mutual funds offer professional management of your investment dollars. Mutual funds are run by fund managers, who are essentially watching over your investment daily. There is almost no other place where you get that kind of investment management without paying huge management fees.

2nd
Mutual funds are extremely liquid. Any investor can sell his shares in a mutual fund any day that the stock market is open. Compare that to investing in real estate, CDs or even stocks that have low trading volume which can takes weeks to months to liquidate your stake. The liquidity of mutual funds gives any investor the ability to get out of the investment quickly if needed.

3rd
Mutual funds offering diversification. Mutual funds invest in tens or even hundreds of different stocks, bonds or money markets. Trying to duplicate this type of diversification in your own portfolio would result in very high trading fees, not to mention huge headaches from tying to monitor hundreds of stock positions. This leads us into the fourth advantage of mutual funds, lower fees.

4th
Mutual funds have very low fees due to their ability to take advantage of economies of scale. Since mutual funds are pooling the investment dollars of so many investors they can buy stocks in larger quantities which leads to lower fees for mutual funds investors.

The Three Rules Of Investing

2008-09-15T22:32:00.000-07:00

There are only three basic elements:

1. Understand what we buy
2. Buy value at a reasonable price
3. Be patient

Make sure you understand what fund you have choosed and what to buy. It is vital to understand your investment - the good, the bad, the risks and the rewards. Fully comprehending the objective of any investment will help you be more comfortable.
Value buying demands both research and discipline. A stock may be judged undervalued for various reasons. If an industry is out of favor, the market value of the stocks within the industry might go lower but, if the fundamentals are still positive, it is an opportunity for the investor to buy selectively as it is still a good value stock.
Patience is a vital ingredient of value investing. It could take several years for the value of your investment to materialize. This waiting period demands both patience and confidence. Most successful investors know it takes time for their investment to double, triple, and so forth. Professional managers generally agree that 5 years is reasonable.

Selecting The Right Unit Trust

2008-09-15T22:26:00.000-07:00

It's used to be a simple in selecting a unit trust but which one really fit your objective. Today, there are a multitude of different unit trust funds competing for investment ringgit. Perhaps a simpler way is to first identify your investment objectives. If you want your money to grow a larger sum in the future to pay for an objective and your risk tolerance is higher, you may choose a growth fund to do the job. On the other hand, if you need an ongoing income stream to pay for expenses and your risk tolerance is low, a better choice may be a bond fund. You may have different investment objectives, risk tolerance and time horizons at any one time, which warrants owning a mixture of different unit trust funds for different investment purposes.

Why Should I Invest Today?

2008-09-15T22:01:00.000-07:00

Everyday is a good day for investment but do not wait till the last minute. WHY? Today's decision should consider tomorrow's needs. There is a direct relationship between the amount of money you need to accumulate and the number of years you have to do it.

For example:-

Let say, you plan to have a RM 400,000.00 to purchase your own house and you have 10 years to do it. Basically you need 10% for the down-payment which is RM 40,000.00.

You may just start your regular investment; let say start from RM 5,000.00 and monthly RM 300.00 on regular basis. Assume the annual rate of the return of the fund 10%. Over 10 years you already made RM 45,100.00 which is enough for your to make your down-payment.

Time is the real asset for your planning for your future; it can be for your education, child's education or even for your retirement. The more time we have to save, the fewer ringgit we need now. Do not let time slip away. ACT NOW!!!

The Best Way to invest in a Unit Trust

2008-09-15T21:32:00.000-07:00

Commonly, there are ways to invest in unit trust:-

A) LUMP-SUM

The minimum lump sum investment in a unit trust is normally RM 1,000. There is no limit on how much you can save and invest in a unit trust. This way method only emphasizing investor to invest for the initial date and can be top-up whenever they want to (not regular basis). Investment using EPF (1st account) also consider as lump-sum method but depend how regular investor investing their fund. Each investor eligible to invest using their EPF for every 3 months EPF as long there is sufficient amount of funds available and follows standards conditions.
Even though,if you are making a very large investment, it is usually advisable to spread your holdings among different funds. Diversify your funds. If you are worried that the stock market could fall back from a peak just as you invest your lump sum, you could consider investing it gradually through a regular savings plan

B) REGULAR SAVING PLAN

This is most popular way chosen by the investors. Regular savings plan allows investors to put in a set amount monthly to the unit trust of their choice. Usually the minimum initial amount is RM 1,000.00 . The investor able to top-up the fund on monthly basis. The minimum monthly additional investments usually start from RM 100.00; there are 2 ways for this top-up which can be done either manually or auto-deduct from bank account (SI).
The regular savings plan is also flexible since they are not tied to a particular period of time. This can enhance the returns from unit trust that performs reasonably well over a long period. An advantage of the regular savings plan is that they even out fluctuations in unit price. The same investment each month will buy more units when the price is lower and fewer when the prices are high. The effect of ringgit cost averaging, as it is called, is to make the overall cost of units slightly cheaper. Of course, another advantage is that you can cash in the whole lot or part of it without penalty on any business day. Regular savings plan can improve returns significantly in the long run.

Maximize your EPF growth

2008-09-10T19:47:00.000-07:00

HI everyone,

It is a good news to share that everyone can use EPF (Employees Provident Fund) to start their investment as long the fund is sufficient and follows the rules. Do you know how to maximize your EPF fund beyond saving scheme?

Lets focus on the objective for this investment scheme; which is to enhance members' retirement savings for future financial needs. I believe we are aware that inflation is rising up from time to time and we afraid that our EPF retirements savings might not be enough to support our future needs. According to a research conducted by EPF, almost 80% of the Malaysian will fully spent their EPF money within 3 years after they retired. I'm sure everyone wanted the money to be spent longer than 3 years moreover the living cost rocking up as well.

So, the only solution is to maximize the fund growth by investing in correct fund. Public Mutual has tremendous fund which been showing the proven record benefited the investors. Make a wise move, do not wait till last minute.

Feel free to ask me via e-mail or phone for appointments.

This is the Best Time to Invest

2008-09-08T22:01:00.000-07:00

Hi my dear friends,

Do you agree with the title saying that " This is the best time to invest"... Of course, YES!!! Maybe some of you disagree with me; OK let me ask another question: If you wanted to buy a branded shirt or cloths; will you buy during sales or during the peak time? Ahaa... definitely during the sales right.
This is exactly same method applied to investment strategy...buy when the market down and sell when it goes up. Anyway, a detail investigation and significant background check on the fund to be invested certainly needed. Make sure read the policy and the fund's portfolio.
Always ask for the help if there is any doubt; clarify at beginning stage. Since we know most of the market now actually at the down side but it will go up some-how based on the researches that being conducted. Make a right choice to choose a correct fund and invest smartly.

DO YOU KNOW ...WHAT IS A UNIT TRUST?

2008-09-02T21:22:00.000-07:00

A unit trust is a financial vehicle through which individuals may invest their money; in other word pools the savings of a number of investors who share a common financial goal. The idea behind unit trust is better investment through collective investing. That is to say that pooling the investments of many investors, individuals and institutions. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them.

Advantages of investing in a unit trust:-

a. Professional management at a very low cost
b. Diversification - DCAP
c. Liquidity
d. Ease of transaction
e. Capital appreciation/income stream

The operation of a unit trust may be best explained by outlining its similarities with the operation of a bank, with which most individuals are familiar.
Many individuals deposit money in the banks, for which they receive interest. These individuals expect complete liquidity where they must be able to withdraw their deposits in cash at any time. The banks employ professional managers to look after the deposits. The deposits are invested. These managers lend the deposits to other individuals requiring funds and a host of other profit generating facilities of the banks.

Similarly, unit trust holders wish to put their money to generate higher returns. The goal of all investments is to make money more productive, either through producing income or growth. Unit trust holders have liquidity because their units can be readily converted into cash at any time. By investing in unit trusts, it allows them to engage professional fund managers at a low cost to the individual investors. These managers diversify the investible funds in many different securities and other approved channels to spread the risk.

The unit trust is constituted through a document known as a deed which brings together and binds the various parties to the deed:

a) The trustee - holds the assets of the trusts on behalf of the unit holders.
b) The manager - the promoter of the scheme and provides investment and
administrative expertise and markets units to the public
c)The unitholders - provide the funds for investment and expect to receive the
benefits derived from the investment.

The effect of dividing the beneficiaries' interest in the trust into units is that their interest is quantified into discrete portions.

For more detail; call or mail me at: ryanbaros@gmail.com

Introduction

2008-08-28T18:41:00.000-07:00

Hi everyone,

I'm Ryan here with intention to create and provide you with some effective information in investing in Malaysia. Although the current market is volatile and not that impressive; I would say this will be good time to invest.

Why???

It's simple!! When market down, you may purchase unit or stock with lower price and sell it when market going up.

The market seems showing some improvement which positive grow.

I will provide some details especially on mutual fund in order to educate you to maximize your weealth.

The secret of success:-

a) Right Attitude
b) Belief
c) Action

Thanks.