Tips on investing your money for your future
by cheong wai quan AND a success concepts life planners consultant
“I INVESTED in a China fund and lost money. No more unit trusts.I’ve been burned!”
“I bought a shop in 2006. During the financial crisisin 2007,BLR (base lendingrate) went double digit and I couldn’t service my loan. I defaulted and lost my shop to the bank.”
“My mother bought shares at IPO and the prices came down. I don’t want to take such risk. Better keep in fixed deposit(FD).” Have you experienced the above?
Investing can be risky. Just like living life. Some risks are small like getting cut when not holding a knife properly.Other risks like racing bikes on the roads are higher.
Spread the risks
Malaysians like property for its ability to appreciate and hedge against inflation. Many deem it an attractive investment and only invest in condos or houses.
Yet, there are others who feel returns from propertyto be slow. Better to invest in shares and make a killing, they argue. Or invest in blue-chip shares and recoup profit at the right time! Yet, without the crystal ball, we never know when the right time is.
Unit trusts in general are suitable for investors who have no time or investment expertise, as funds are invested into a diversified pot of stocks in different sectors and/or regions with some portions in cash equivalents.
Profit from continuous investing
To minimise or cut loss, do not choose to do nothing. Doing nothing makes you LOSE money,eaten up by inflation! Instead, invest in different asset classes.
Research done byGaryP.Brinson (1995), Roger P.Obbotson (2000) and Vanguard Group (2004) has shown having a portfolio of different assets can give you success rates of 70% up to 90%.
Build a portfolio of different assets like deposits, unit trust funds, properties and shares.With the right
guidance and knowledge, a portfolio can also include currencies, wine, paintings, coins and
other investable instruments.
With such a diversified portfolio, every RM1,000 invested can yield a return betterthan what a FD can give you. Given time, your investment will out-pace your personal inflation rate and put you in the positive.
If you have made losses from past investments, you profit from proactive investing into different asset classes.Learn from your losses and move forward. Invest to rebuild your wealth.
