Yup yup - the evil / good interest rate (OPR) controlled by BNM / Feds / Central Bank affects Bonds, Equities (REITs, Properties & "normal" stocks), FD & MM.
Me thinks if one can become an expert in the exact +ve / -ve correlation of interest rate to all these - fatt tatt man (with lowered risks too).

Correct me if i'm mistaken, generally i've found that:

With low interest rate (assuming managing low inflation):
Equities do very well
Bonds do better than FD

With mid interest rate (assuming managing mid inflation):
Equities do better than Bonds
Bonds and FD near equal

With high interest rate (assuming managing high inflation):
Equities does bad except for commodities
Bonds do worse than FD

Sorry but i'm not a gold bug. Personally, it's just another form of $ - i'm more interested in Assets that generate $, thus perhaps it can fit into one of the asset classes (commodities/metals?).


This post has been edited by wongmunkeong: May 21 2011, 06:33 PM

Yup, understand & agreed. It's not 1:1 perfect correlation (-ve / +ve) for interest rate to equities, though Cherroy, 6% to 8% in the early 90's isn't "high" interest rate, IMHO comparatively. If i remember correctly, in the 80's (golden bull run or some may say irrational exuberance) FDs were giving 12% to 13%+ . That was really out of whack - high FD and super stock market bull run.

Please do note that i'm just generalizing, without putting in the equation of systemic and specific risks of each equity - if we go into that, we'll have to add things like sector rotation analysis, cap size, etc. - heavy stuff

Hi WirelessDude - er.. 1997-1998 had 12%-13% FD interest rate meh? Sorry ar - i'm referring to 1980s FD rate, maybe there's a typo somewhere in my previous post

Guys, U may want to check out this little known thing - MBSB owned by EPF (er.. havent checked in a while whether still is or not). Their FDs are usually higher than "normal" banks.
http://www.mbsb.com.my/deposits_fixed.html


History
The origin of Malaysia Building Society Berhad (MBSB) can be traced back to the Federal and Colonial Building Society Limited incorporated in 1950. In 1956, it changed its name to Malaya Borneo Building Society Limited (MBBS), with the Malaysian Government as its major shareholder. MBBS was then listed on the Stock Exchange of Malaysia and Singapore in August 1963.

The company became an incorporation in Malaysia under the Companies Act, 1965 on 17 March 1970, before it was listed on the Kuala Lumpur Stock Exchange now Bursa Malaysia on 14 March 1972. The Employees Provident Fund (EPF) and PermodalanNasionalBerhad (PNB) are currently the major shareholders of MBSB.

MBSB has evolved in its role from being the first property financier to a financial provider that offers a spectrum of innovative products and services throughout its branch network nationwide.

MBSB is 'an Exempt Finance Company'
MBSB is defined as a Scheduled Institution under the Banking and Financial Institution Act 1989 (BAFIA). The status of an Exempt Finance Company was granted to MBSB on 1 March 1972 by the Ministry of Finance and the status has remained since. This allows MBSB to undertake a financing business in the absence of a banking license.

Historical information:

MBSB has been granted with an exemption under Section 7(4) of the Borrowing Companies Act 1969 (BCA)
As a result of the change from BCA to FCA, all references to borrowing business and borrowing company were to be construed respectively as finance business and finance company
The FCA was later repealed by Banking and Financial Institutions Act 1989 (BAFIA). As a result, all finance companies are now under purview of BAFIA
Section 128(2) of BAFIA states that all exemptions and approvals made or given under the repealed acts (FCA) shall be deemed to have been made and given under the relevant corresponding provisions of BAFIA and shall remain in force until revoked, rescinded or replaced by the corresponding provisions of BAFIA.

This post has been edited by wongmunkeong: May 22 2011, 06:37 PM

Bro - different tools for different needs lar. U might as well say ForEx is much higher than FD.

Insurance -
guaranteed returns = x.x%pa?
lock-in period = xx years else ?
guaranteed by gov for $xxxxxx?

newbie but making a statement instead of making an inquiry?
Highly misleading - U by any chance a sales agent?

Maybe the fellow is laddering / staggering his FDs for emergency funds storage, thus having $5K mature every week / 2-weeks / month, thus do not compromise the whole lump sum's % if forced to take out some $ from FD during an emergency
OR
he's just being sarcastic

This post has been edited by wongmunkeong: Aug 24 2011, 04:14 PM

Maybe island mentality (kiasu & kiasi) lor.
Mana cukup, 200 days only. 1 year have 364.25 days wor and want to cover any day can cough up $5K emergency fund leh

For a person to put $1M into FD, he must be a multi-millionaire

Mind U, i'm no multi-millionaire, thus dunno what some multi-millionaire thinks

This post has been edited by wongmunkeong: Aug 24 2011, 04:36 PM