Review of Current Market

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

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

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

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

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

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?

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

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

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

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?

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

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.