A manager who manage equity fund only can invest the money into equity, not bond or anything else which is bound by trustee and its objective. So can totally blame them since they have nothing to choose from.

The main issue why local equity fund mostly suffer losses because of poor performance of KLSE. Although CI manage to hit 1000 today but what is the meaning for the whole market? Nothing, even when CI reached 1000, the counters loss still more than gain one with 400 to 300 ratio.
Also with high management fee and entry fee, it left not much from unit trust holder to gain. eg. a fund manage to make profit of 10%, sound quite good, but after deduct the entry fee of 5% and 1.5% management fee, it left 3.5% for the unit trust holder only. Still think the charges or fee are quite expensive in Malaysia.

The index can go up is much due to some push up by EPF and PNB with few selective buying which can be done easily since liquidity are low as well as volume so a few ten million of buying will easily push the index up few point which is peanut for EPF board or PNB who manage asset of billion. While other than index link heavy weight still like dead and buried state.

The scenario is like they are having large chunks of share in those heavy weight like TNB, MISC, Maybank so push up these stock will make them good profit on paper as well as having good report card so pushing up these stock won't do any harm. That's why you see the index keep on climbing although without much participant from foreign fund.

A lot of listed company are already become GLCs, it is almost impossible to find a heavyweight in the market that EPF or gov investment arm don't have more than 20-30% of share of it.


This post has been edited by cherroy: Nov 3 2006, 06:32 PM

nah....the 1000.6 is just a false break.
It managed to went up there,but lasted for only 1 minute LOL.

Not to mention,the 1000 level ISNT the true resistance,its merely a psychological resistance,due to the price dwelling in the 800-900 levels for nearly a year.The true resistance lies within the 1021 level,and the "major" one is located at the 1200s.The FKLI didnt even went up to the 1k level today.

To be honest,i'm quite skeptical about CI right now.Some of the trend indicators are already in the state of overbought,and there are bearish patterns forming.

Pidah,

If his calculation is wrong, show your calculation and tell us where he did wrong.

Dreamer

I think I have corrected the calculation at post #1461. It should be 7.797% return per annum. For sure, we assume there is no switching activities in this case, as not many people are free to monitor the market always and switch the funds. In my opinion, people who invest in mutual funds are mostly busy people and don't know about market performance. So, most of the mutual funds owners will not switch their funds. Dividend distribution is not value added, so we do not take this into profit calculation.

In fact, I admit that switching is a good activities to maximize the profit. I bought a fund two years ago, but lossing money. So, I switch half the funds to Index funds, when at that time KLCI is only 860++. So, now I do not loss money, but earn a little bit from this investment. The objective I invest mutual funds is, I know I can learn about investment faster when I really put money into it. Is it silly?

This post has been edited by leekk8: Nov 3 2006, 09:58 PM

It is quite true also, you can have tons of theory behind you but can't match a few real experience.

Investment is like planting a fruit tree. You won't be able to see the fruit in short term. Good performing mutual funds (unit trusts) need at least 3 years to see positive returns and you may break even by the first year.

Wrong calculation pidah.
Correction. No fee is imposed on selling. So you shouldnt have deducted 8637 when you sell.

123391 = 100,000 * (A)^3
A = 1.073

7.3% compounded ROI for 3 years.
Much better than FD.

This post has been edited by luqmanz: Nov 4 2006, 10:11 AM

Erm..something popped into my mind. Why not we invest in those ah longs who needs money to borrow money out? Then we also can have nice interest.... my friend does that I think it's 1.5% per month... so means by 3 months it matches the interest rate of any bank FD

Ah Long is illegal in Malaysia, you might be sued if doing this...
It's not an investment if we do something illegal...

actually it's illegal to even loan ur fren money.... according to the law only those with license can do that

I think it's legal as long you do not charge interest. That's all... License means u can charge interest.

Yes, it's legal if you didn't charge any interest on your loan. If you lend money or even give money to your friends without charge any fees, it's legal...
You can give your money to anybody...right???

Yeah, from what I heard have to be friends with those "tai kos" big brother so we can invest in it Anybody ah longs?

even if you dun charge interest it's still illegal.... but then nobody cares about it cos no 1 even knows it's illegal

David83,

Let me play devil advocate here and ask why?? Why I cannot buy an investment that pays me immediately and pay me every year?? It is my choice and if it is NOT a good deal, I do not have to buy!!! I can keep my money in the FD until I find a good deal. This is my strategy for my money in Malaysia.

In 2005, I buy the best managed Malaysian Bank stock at RM6.80 (including commission). It pays $0.55 commission last year. This give me yield of 8%. This year I get dividend of $0.40. This gives me yield of 5.9%. Looks like this will be the yield going forward. I am NOT even looking at appreciation.

What is the risk?? Yes, it is higher than FD. But, this bank survived the last recession and if this bank goes to hell, you can forget about the whole KLSE too. It is about the same risk as the KLSE index. Until foreign bank can come in, all local banks enjoy a margin of 3% to 4% ( difference between loan and FD rate). The banks will make a lot of money.

So, please tell me why am I buying unit trust?? Where I lose a few percents when I buy and a few percents every year?? For foreign exposure, why not buying mutual fund from US companies like Vanguard?? There is no load and annual maintenance of less than one percent??

ASB may make sense if I am a bumi. But, other than that why??

Dreamer

P.S.:

1) The lot size is 1,000 shares. I can save my money in FD until I have enough money. Since the dividend is around $0.40, I can wait until the share price is low enough and yield is attractive to me. I make money when I buy.

2) This is part of my portfolio of FD, real estate, and banking stock. I have enough cash for 2 years of expenses in FD. So, I have enough money for a normal recession.

This post has been edited by dreamer101: Nov 5 2006, 11:38 PM

How long have you been holding on to PB? if you had it since 1996 it would have given you a return of around 300% which turns out to be 30% per annum which is very good.....while it is still consistently given dividends of at least 7% every year.... bear in mind it's dividends only while if there are capital appreciation you get more

<<it's dividends only while if there are capital appreciation you get more>>

Darkmage12,

You only get capital appreciation if you SELL the stock. The goal/strategy here is to buy stock that pay you good dividend every year. You make money every year without selling the stock. So, your statement of 30% per annum is ONLY REAL when you sell the stock. I only bought PB at 2005.

For some people that bought PB at RM3, their dividend yield is around 13%. Why should they ever sell the stock??

Dreamer

Yes, if the stock has dividend yield around 13%, we no need to sell the stock and get the dividend every year...it's not easy to get some investment give you high return every year...

<<it's not easy to get some investment give you high return every year...>>

Leekk8,

Yes and no. You have a choice. You do not have to buy anything until it is a good deal aka on sale. You can keep your money on FD until you find a good deal. You can be patience and wait. Meanwhile, you need to learn how to calculate and spot a good deal. For example, PB is probably paying RM0.40 dividend for a while. You could wait until market panic and PB goes down to a level where it is a bargain before you buy. Market always goes in cycle. Ditto for real estate and so on.

But, you NEED to know how to calculate and spot a bargain. Know when something is a good deal or not.

Please comment and criticize my proposal.

Dreamer

P.S.: There are many things wrong in "Rich Dad, Poor Dad"'s books but this is something that I learnt from those books.

This post has been edited by dreamer101: Nov 7 2006, 01:31 AM

I know BUY low SELL high is the concept of investment, there are some companies having high dividend yield, so we can wait for the price become low or reasonable, then we can buy it. I believe that there are always some companies worth to buy. I'm a newbie in investment, and I never buy stock before. I'm learning and will start trading in stock market maybe next year. For me, I will allocate 70% of the funds that I have into some high dividend yield stock, but the rest will be put into some potential companies, which may be growing rapidly.

I not dare to say RICH DAD POOR DAD is right or wrong, in fact, I learn quite a lot from that book. Some of the things might not same as Malaysia, as the author is an American. However, the idea of the book is, we need to change our thinking and perception. Things are changing all the time, so our mind also must be changing. Before I read the book, I didn't realize the importance of investment and financial planning, but after I read, I realize the importance and it's worthy to try to do own business...