Here's another good article from MarketWatch by Paul Merriman: "How to invest like a rich guy."
http://www.marketwatch.com/story/rich-inve...18?pagenumber=1

The gist of the article: Economic background and financial means during our childhood growth and upbringing can influence our pessimist or optimist outlook into the future. And our pessimist or optimist outlook can shape our attitude towards different types of investment tools.

Take time to read the comments at the end of the article, some good info and banter there.

Cheers. Happy investing.

1 more week before the half way point of the year. This is how the bond funds are doing:

YTD as at 20th June.
PB SUKUK FUND 0.71%
PB INFRASTRUCTURE BOND FUND 0.79%
PB ISLAMIC BOND FUND 0.83%
PUBLIC ISLAMIC BOND FUND 0.91%
PUBLIC SUKUK FUND 0.96%
PUBLIC ENTERPRISES BOND FUND 0.99%
PB BOND FUND 1.01%
PUBLIC ISLAMIC INCOME FUND 1.02%
PUBLIC ISLAMIC INFRASTRUCTURE BOND FUND 1.07%
PUBLIC ISLAMIC STRATEGIC BOND FUND 1.11%
PB AIMAN SUKUK FUND 1.11%
PUBLIC ISLAMIC SELECT BOND FUND 1.16%
PUBLIC SELECT BOND FUND 1.20%
PUBLIC STRATEGIC BOND FUND 1.21%
PUBLIC BOND FUND 1.45%
PUBLIC ENHANCED BOND FUND 1.54%
PUBLIC ISLAMIC ENHANCED BOND FUND 1.66%
PUBLIC INSTITUTIONAL BOND FUND 1.81%

PB ISLAMIC CASH MANAGEMENT FUND 1.35%
PB CASH MANAGEMENT FUND 1.37%
PUBLIC ISLAMIC MONEY MARKET FUND 1.38%
PUBLIC MONEY MARKET FUND 1.38%

(Please note some of the funds are closed. So don't be too shiok to pin down a fund to select and then finding that it is closed.)

- almost all of them giving below FD rate of 3% (YTD 1.4%).
- only 4 of them doing better than the money-market funds.
- MM better than bonds? Maybe, since we can only speculate what can happen in the next 6 months; but one thing for sure is that switching from equity to MM is free while it cost $25 to switch into bonds.

Just something to think about if there is intention to re-balance your portfolio mid-year...

Cheers.

YTD performance of some selected small cap funds:

PUBLIC ISLAMIC OPPORTUNITIES FUND 4.95%
PUBLIC ISLAMIC SELECT TREASURES FUND 2.02%
PUBLIC ISLAMIC TREASURES GROWTH FUND 4.10%
PUBLIC SMALLCAP FUND 8.00%
PUBLIC STRATEGIC SMALLCAP FUND 7.40%

Benchmark for PISTF and PIOF 15.57%

Some selected comparisons (sourced from Morningstar site):
Eastspring Investments Small-cap 24.05%
AMB Small Cap Trust 16.67%
RHB-OSK Sm Cap Opp UT 13.79%

Comment: Nothing much to add; saying more is redundant; and sometimes being silence gets the message across!

YTD performance of some Malaysia equity funds:
PUBLIC DIVIDEND SELECT FUND 1.52%
PUBLIC FOCUS SELECT FUND 4.87%
PUBLIC GROWTH FUND 1.38%
PUBLIC ISLAMIC DIVIDEND FUND 0.99%
PUBLIC ISLAMIC OPTIMAL GROWTH FUND 2.28%
PUBLIC ISLAMIC SELECT ENTERPRISES FUND 2.14%
PUBLIC ITTIKAL FUND 3.48%
PUBLIC OPTIMAL GROWTH FUND 3.21%
PUBLIC REGULAR SAVINGS FUND 1.86%

Selected comparisons:
Kenanga Growth Fund 12.40%
AMB Unit Trust 9.83%
Hwang Select Dividend Fund 8.07%
Manulife Equity Plus Fund 6.77%
Pacific Dividend 4.90%
Hong Leong Dividend Fund 2.96%
TA Growth 2.34%
RHB-OSK KLCI Tracker Fund 2.22%

If it is your 2nd fund, maybe go for a large/mid cap fund. Below are 3 funds, which are also components of my portfolio model (look it up in this thread), and rated 4 stars by Morningstar.

Public Optimal Growth Fund
Public Islamic Select Enterprises Fund
Public Regular Savings Fund

Cheers.

yeah, thanks for the reminder.

Keeping in mind which funds are EPF-approved funds can saves a bundle in service charges if using both cash and EPF investments. Reserves the cash investment for non-EPF funds... which are mainly the small-cap funds, and foreign funds.

Do monthly DDI (Direct Debit Instructions) have its merits?

There was a short discussion on DCA (Dollar Cost Averaging) versus Lump-Sum investment in another thread in this forum. Which got me thinking about the merits of DCA when you average out the investment too fine. And DDI is essentially a monthly DCA.

Mind you, lump-sum investment has nothing to do with the size or how large is the investment; not to be mistaken lump-sum for large-sum. Both methods (DCA and Lump-sum) is regarding timing. The former is spread out the investment over a period of time, while the timing of the latter is more immediate.

In other words, if you buy $100k of a variable-priced Fund A today, and then another $100k next month into the same fund, this is DCA. You have spread and "average" your investment into 2 lots. (You can get an average from a minimum of 2 numbers.)

Say, if you have $100k to invest, and you invest 20k into Fund A today, 20k into Fund B next month, 20k into Fund C in August, and so on, it is lump-sum investment. Each investment into each fund is NOT split and NOT average.

With the definitions cleared, let's go back to their merits.

Lump-sum was considered more favourable to DCA since it is immediate and there is no time wastage. In the long term of years or decades, the short term market trend of either going up or down in the next few days or weeks or next couple of months would faded into relatively an insignificant percentage whether it was up or down in the short term, while it is generally a long term uptrend.

DCA was considered more favourable since investors can be new to the game, and can be emotional when the market dips, and then pull out at the lows. This is going against the mantra "buy low, sell high". DCA allows these investors to maintain and hold the fund, by having consistent investments whether the trend is up or down.

Now back to the main question: Is there any merits to DDI or monthly DCA over a number of years?

It is good to have a monthly budget for regular investments as it can helps to develop a saving habit. And adhering to the 'don't waste time' opinion, monthly DCA has it merits when you are fresh into you career and starting to save as you earn.

Other than this, IMHO, I don't see any merits of DDI. Monthly DCA over a number of years could be over-averaging the splits. Either lump-sum or limited DCA over several months would be a better option.

Cheers.

PS. As usual, what you read in forums, are 'opinions'; and above is mine. And I take all opinions with a grain of salt even from long term resident posters and experts and sifus. Would recommend that you do the same.

===============
Another advantage of DDI is that when the fund is closed (like Public SmallCap), you still can add in new investments with DDI. But you can also develop tunnel-vision and obscure you from considering another fund.

What happened in the past had already past; you may use it to project into the future, but it is still a projection. Every projections into the future is speculation. Your own opinion and speculation into the future is as good as any financial or economy experts.

(And this is mutual funds we talking about... the fund manager can change its underlying stock holdings anytime, and any report of its holdings is already dated by the time it is published. Any deep insight you have in any particular share does not help...)

I would look into the bigger picture on the total financial plan (if any) and how the entire portfolio should be before arriving at a decision.

In the 1st place, I would not invest too much into any fund that I, will later on, feel the pressure to down-size it. Much had been said on building a portfolio in this thread and elsewhere... look them up.

If there is a fund that is consistently ranked number one year in year out, then go for the champion. Unfortunately, (from my amateur observations), funds in the same asset category tend to be ranked differently each year. Some years they performed better; other years, they underperformed.

Me, I buy both! I was restructuring the portfolio to have more local funds this year... switched some into PISEF in early Feb after it dipped in Jan, currently gaining 6.6%.... switched some into PIDF early this month after it dipped in May, now up 0.99% in less than a month. Yeah, enjoying some short-term fun... long term, who knows?

Cheers.

1st of all, you must get the lingo or some important words correct. "Switch" and "Sell and buy" are 2 different meanings.

A) In "Switching" from one fund to another fund, there is a switching fee, which is RM25.

B) "Sell" or "Cashing out" of a fund and then "buy" another fund, means that you are getting out of a fund, selling all the units and having the money by cheque or debit directly into your savings account. Then use the money to purchase another fund. This means you are paying the service charge again when purchasing the new fund. This is alright if the service charge is zero. But this is Public Mutual, and the service charge is as high as 5.5%.

So please note the difference between (A) and (B).

Secondly, you must get the names of the fund correct. There is no fund such as "Public Asean Dividend Fund". They are either "Public South-East Asia Select Fund" or "PB Asean Dividend Fund".

"Public" and "PB" are 2 separate series of funds. You may "switch" from a "Public" fund to another "Public" fund, but NOT from a Public fund to a PB fund.

To transfer from a Public fund to a PB fund, you will need to "Sell and Buy" (as in method B), and pay the service charge again. This I would not recommend; as it is, paying the service charge once is already costly enough, to repeatedly pay the service charge again and again is idiotic!

Yes, Public Bond Fund is closed; new investment is no longer accepted.

As in previous posts, recommendation on whether to hold or switch into another fund would depends on your overall financial plan and how you want to build the portfolio.

This post has been edited by j.passing.by: Jun 22 2014, 08:02 PM

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I'll take that those units in the bond fund are low-load units (paying service charge of 0.25%), so it's not paying high service charge again...

One question I often wonder myself is what is short term? How long is a long term? Short term is 3 years, and 5 years is long term?

Another question some of you might be wondering is why I am still here in public mutual?
Simple reasons: a) I'm already here, and had paid the service charges; a long time ago. b) I'm in for the long term, and long term meaning 'forever'.

Think about this 'forever' long term.

If you are investing correctly into mutual funds, and getting good returns, do you want to exit and put your money back into a savings account or FD? Or do you mean you intend to cash out and invest into another investment tool like a condo or house or commercial property and get regular rental income? When you are older and in retirement, with less brain cells and maybe getting a bit senile? Not me. A bird in the hand is worth 2 in the bush.

Recommendation: See above excellent advices. Otherwise tell us what's so special about this Asean fund that you have to have that you don't mind paying 5.5%.

Cheers.

PS. Please note that what is expected from any fund in the near future is a speculation. If the fund goes up 11%, it can also go down 11%. ok, every thing is fine and dandy when it goes up. If goes flat (which is not the worse case scenario), there's the opportunity cost for the 5 years, and 5.5% down in the pocket.

IMHO, short-term play is trading... go to a less costly place to trade, and emerge with bigger winnings.

RM25.

If the fund is less than 90 days old, there is a penalty of 0.75% or a minimum of RM50.

Registered for Public Mutual Online, and do the switches online at your convenience... do it before 4.00 pm for same day NAV pricing.

This post has been edited by j.passing.by: Jun 22 2014, 09:37 PM

I think you miss my point that anything that is not forever is short-term.

5 years, 7 years, 10 or 20 years, is not forever. And not 'long' term.

Laggard


What it is:

Laggard describes a stock that fails to perform as well as the overall market or a group of peers.

How it works/Example:

In a broad sense, the term laggard connotes resistance to progress and a persistent pattern of falling behind. In a financial sense, a laggard may be a stock or other market-traded security that has historically underperformed on a consistent basis. For example, if biotechnology stock ABC consistently posts annual returns of only 2% when other stocks in the industry post average returns of 5%, stock ABC would be considered a laggard.

Why it Matters:

If you hold them in your portfolio, laggards are generally the first candidates for selling. In the example above, holding a stock that returns 2% instead of one that returns 5% costs you 3% each year. Unless there is some solid reason to believe that a catalyst will lift shares of a stock that has historically lagged its competition, continuing to hold the laggard costs you money.

(copy & paste from http://www.investinganswers.com/financial-...t/laggard-3534)

Sorry, guys... I need to challenge your views...

1. Please do not assume all funds are the same. And in direct connection to its underlying index or benchmark.

2. He was talking about a specify fund, and whether China has potential or not, that relationship is secondary. This was how he got into trouble in the first place. I know, since I was in his situation before, and that's how I got there. Too readily buying into the sales pitch "China has big potential".

3. Just a quick look at the "Fund Performance" Chart for this fund, and flick through 3 years, 5 years, and since fund commencement will shows that this fund really, really underperformed its benchmark.

4. In the 1-year range, it has increased 17.14% (benchmark 18.03%). Still under performing, but keeping up with its benchmark. But note it is a volatile fund, can drop 10% in a matter of weeks as shown in the chart, dropping from about 17% to 7%. How will it fare in the near future? We can only speculate.

5. Whether to drop the fund, fully or partially... as mentioned too often, depends on how the structure of the portfolio should be. And at what stage is the portfolio.... if still at the beginning stage, then continue DCA to average down the costs of the units (if the fund is a permanent part of portfolio).

If the fund is too large (and too volatile to you) , then trim it by switching a portion of it to a more conservative fund (but foreign), or into a local fund.

6. Me? I don't have the patience... I dropped it like a hot potato 2 years ago, and it went up 24% since then. Regret? NO! I'm now having a much better portfolio (which suit my needs) and had more than recovered what I lost. (See the small caps YTD performance in the previous post... all better than PCSF's 0.39%.)

"It will be price that will be calculated at end of day today (unknown yet)." It's correct term is "Forward Pricing".

"... at end of the day today..." can be half correct - if the fund has some (significant) foreign shares, and that foreign market is a holiday or closed (for example Thailand is closed today), today's transaction (even though it was before 4pm) can be priced to tomorrow's NAV price.

For example, SEA Select Fund, if it has significant enough shares in the Thailand market, it will not be calculated and priced today, 1st July. Instead the transaction will be based on 2nd July's NAV price.

"(Forward Pricing - A Securities and Exchange Commission regulation that requires that investment companies price all of their buy and sell orders of fund shares according to the next net asset value (NAV)." from investopedia.com.

==================

Yeah, it can be confusing at times. We have to be careful to look at the dates too, not just the NAV prices. For example reading the unit trusts prices in today's newspapers do not means that all the prices are today's prices, or even yesterday's prices.

Another example, the fund prices in public mutual website will have a mixture of funds having yesterday's NAV and today's NAV from about 7.30pm till 11am. This is because some of the local funds will be updated later at night after the local stock market closes, while the foreign funds will be updated tomorrow morning around 11am.

==============

LOL... long winded post... I've too much time...


This post has been edited by j.passing.by: Jul 1 2014, 05:17 PM

Switched out of bond into MM today... and added some into a small cap.

... just following a sifu... and also the portfolio... now at almost 50/50.

All markets went up yesterday.... portfolio managed to regain last year's peak... yeah, the portfolio had more aggressive funds last year, went up quick, went down also just as quick.

That's relatively fast since Hong Kong market was closed 1st July, and it could only be processed from 3rd July after the 2nd July's NAV price was known.

There are other factors and issues involved too, as mentioned by V-zero... it's like buying a car - if you want to base solely the buying criteria to speed, that's your choice and preference.

Check out my previous post - The RM25 Hotel... to recap:
1. There is zero fee. (Previously a long time ago, it was RM25.) So make as many switches as you like. Another tactic is to switch from 2 or more equity funds and consolidate them into one MM fund, then switch again from the MM fund. Switching from MM has no 90 days restriction.

2. A flat RM25 per switch, regardless of 90 days or not.

3. Don't know. Had only bought directly into bond/income funds, which now cost 1% (previously was 0.25%.)

4. Switching from low-load units to loaded units (ie. equity fund): it is consider a "purchase" and it will be based on the normal service charge, and no switching fee. The service charge is less the service charge already paid on the low-load units. For example, 5.5% minus the service charge already paid - which can be either 0%, 0.25% or 1%.


============
To expand on the tactic mentioned in (1)... say if you have 3 foreign equity funds (all of them more than 90 days old), and wanted to switch all three into one or two local equity funds:

Option A: the usual method would be making 3 switches, costing RM75.

Option B: Make 3 free switches into a MM fund. Wait at least 2 days for the transactions to be updated. Then switch out from the MM fund to the target funds. You would save at least RM25 or more.

Option B also allows to pool the funds together, and divide the total sum into the target funds at any desired proportions without extra costs.


IMPORTANT NOTE: Don't mistake MM funds with bond/income/sukuk funds. Switching into the latter funds, will cost you RM25 per switch, and switching out, if less than 90 days, will be at least RM50 or 0.25% on the value of the switch.


This post has been edited by j.passing.by: Jul 10 2014, 10:24 PM