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Investment (Local and International), Everything About Investment
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Singh_Kalan
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 Nov 7 2006, 05:01 PM
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QUOTE(Darkmage12 @ Nov 6 2006, 12:38 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  1 think i would like to highlight here is most people on this forum has a wrong idea on calculating annual return. Eg quoted above, 1996-2006 (10 years) give u a return of 300%. Assume RM10,000 initial investment, after 10 years become RM30,000. Most of u calculate the annual return by just dividing it by 10, turn out to be 30% p.a which is totally misleading. From this figure, i guess most of u will have a thought...WOW 30%, that is 10 times better than fixed deposit at 3%.  . WRONG. In fact fixed deposit and other type of saving give a compounded interest, not average interest. If u do a compounded interest calculation, wat u get from the example above is only 11.6% p.a and not 30% p.a. Hope this can give u all a clearer picture on investment.  |
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Singh_Kalan
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Nov 7 2006, 06:14 PM
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QUOTE(cherroy @ Nov 7 2006, 05:43 PM) Just for example, as Dreamer said, PBB offer good dividen yield while stock is pretty stable to the upside so average return rate is about 7-10% (dividen + appreciation of share price) based on RM6.80 calculation. But a better timing buying during 98 (once I bought) is 0.88 cents only! So you make RM6 with Rm0.88 capital only in 8 years time which bring you about 600% capital gain turn out to be 75% per annum (not yet calculated the dividen gave out every year). just as i mention above, here comes another calculation. FYI 0.88->6.00 (in 8 years), the average compounding interest is only 27% p.a, not 75%. Really bo lat liau ah.  . This post has been edited by Singh_Kalan: Nov 7 2006, 06:16 PM |
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Singh_Kalan
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Nov 7 2006, 07:12 PM
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QUOTE(cherroy @ Nov 7 2006, 06:24 PM) sorry about the calculation, I don't look into it since I just simplified it since the what I stressed at that statement is that the importance of timing besides other factors. I just simplified with Rm6.80-Rm0.88 = RM6 gain in 8 years and RM6/0.88 = 680% gain in 8 years, I know the calculation is flaw, just simply gave 75% which, since I am not using any calculator to calculate it, just a simple mind thought of it. with simple annual rate. I know it is wrong but the calculation part is not my statement intention. Sorry about the misleading part. ok..i understand your intention. But the reason why i want to stress for use of compounding interest is bcoz most investment r based on this calculation. Average interest give a wrong concept to novice and its not fair to the bank that provide product such as fixed deposit, saving acc, loans etc which is based on compounding interest. Most novice will then compare this compounding interest with average interest and make a wrong decision in investment. Wat cha think?  |
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Singh_Kalan
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Nov 14 2006, 05:21 PM
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How bout property investment??  Suggest to move the Property Investment Tread at http://forum.lowyat.net/index.php?showtopic=346639 to here also.  |
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Singh_Kalan
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 Nov 15 2006, 03:29 PM
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QUOTE(ky_khor @ Nov 15 2006, 12:13 PM) OK...i just buy up this domain. If lowyat interested can buy from me.  |
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