Yay, at last we have some numbers to play around:

i) I prefer option 2 because Profit/sale x 100 = Profit margin. Hence 10/11 x 100 = 90.90% profit margin versus you little puny tiny 90.00% margin. LOL at you.

Not very financial literate are we?

Young padawan, too one dimensional one is, more knowledge one acquire should.

Xuzen

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Added on August 16, 2012, 11:23 amSwitch lump sum from China funds to cut loss first, thereafter DDI to the better fund to reduce volatility.

DDI does not reduces the payback period (aka Break-even), it only reduces the volatility (aka investment risk).

Look after the risk yourself and let the return take care of itself - quote from some investment guru I read somewhere, not sure who, could be W. Buffet.

Xuzen

This post has been edited by xuzen: Aug 16 2012, 11:23 AM

Thank You sir! I will do the necessary....

for the current market situation, its very hard to break even in the short term in any funds. assuming u already planed to exit from UT after the break even....

my suggestion,
switch all the funds to bond funds now...... stop DDI..... wait for GE....... market may/will drop (but dont know how may/low will be).... switch back to local equity funds, those focus to local marlet 100% after the GE.

u may get break even faster. (but dont know how the faster).

take note... china market is abt to recover from bottom. and also expected local funds will be uptrend until GE, (assuming no external factor wil affect local market)

sharing only.

param not optimistic about foreign equities?

Thanks for ur advice bro.

Actually u got it right bro. I am somehow planning to exit UT once i got the break even.

Based on ur advice, which Bond fund that you would recommend? I also heard my agent said the China fund is going to recover but they remain as aggressive fund. So i am not too sure as i really know nuts about UT

Below is my reply to my agent after advice here and at the same time now waiting for her advice as well.

1. Leave my PIADF at it is now.
2. Switch all my China fund and PFEDF to PFEPRF
3. If have a budget of RM 500 per month for DDI, which fund would you recommend (PIADF or PFEPRF)

So based on ur advice, don't DDI anymore, then it's hard to shorten the time to recover for my case right?

need to wait another cycle like 2008-loh....

for local, next cycle coult be comng GE. the most late next yr before april.

take note indonesia select fund doing well too.

I predict will be nov the cycle.. Hehe

If ur intention is to continue with UT, my suggestion will be diff.

It’s not a good idea to top up anymore if u plan to exit? If u want to continue, u can do DDI.

Starting DDI, never shorten the time. may be lump sum top up will do if the price recovered to original price in short time.


Let say if u invested rm50k, If u bougth the unit at rm1. If the price 0.50 now. U need to invest another rm25k. assuming the fund is recovering, the price is need to back to rm1 to recover old lost. How abt ur additional rm25K? so, the price shud at least to go up to rm1.25 for the break even for RM75k. (ur total investment) this is by applying lump sump only.

Rm50k
Unit price =rm1
Total units = 50k

Rm25k
Unit price = rm0.50
Total units = 50k

Cost per unit = rm75k/100k
= rm1.25



Do you think by DDI, u can achieve it in short time to recover the lost?. I don’t think so for current market condition.

DDI is for buy less unit for higher price and more units for cheaper price. Every units u buy need to work for u to give profits. Its will take some time. The longer u hold/DDI, the higher the rewards. Of course, the fund shud perform well the time u exit with profits. Ur cost per units shud be cheaper than market price.

My suggestion is to avoid any more top up and recover from wat u hv now. Switch all to bond funds now. My suggestion to public sukuk fund. Switch back to local equity funds when the time is favorable for u.

U can ask other forumers abt forign funds, I’m a local funds lover.

Maybe ur agent can guides you better.

Wat is the investment in ur mind now?
Why u want to exit? Is it u lost ur money?

This is investment which comes with profits and lost. U shud study the fund(or any investment) first.

sharing only. no right no wrong.

rm75k/100k = rm1.25

fail maths

alamak my mistake malu-nya saya.



rm75k/100k = rm0.75

the price shud back to rm0.75 for the breakeven.

Let say if u invested rm50k, If u bougth the unit at rm1. If the price 0.50 now. U need to invest another rm25k. assuming the fund is recovering, the market price is need to reach back to rm0.75 to recover old lost.

RM50k
Unit price =rm1
Total units = 50k
cost per unit = rm1

RM25k
Unit price = rm0.50
Total units = 50k
cost per unit = rm0.50

average cost per unit = rm75k/100k
= rm0.75

so now the maths is clear, when to top up or DDI is different, right?

my reply which i was about to post: "As to the last Q, I would prefer to register into the online service and do additional investments myself, and as the minimum additional investment is RM100, maybe take on both funds or either one depending on which fund's price goes lower."

Reason: Buy low, sell high.

---------------------
The longer version which I have typed and about to post:

I got hit almost as bad as you by PCSF and a large percentage of my total funds is also in china and far east funds. My PCSF lost ranges from 41-49%. (got to put up a brave front and smile!) The plus point is that the calculated lost is included the service charge. But fortunately, some other funds were making gains, so they lessen the blow. Anyway, it is paper lost as the game is still on and not over yet until we quit.

No matter how we fine tune and balance the funds we're holding, it will take some time to recover; it takes 5 years to come to the present situation... so maybe 2.5 years at the earliest to breakeven?

So at least with a certain time frame in mind, we can try to plan and not act too rashly in switching and balancing the funds when things don't seem to be moving or improving; and also in making new investments, especially in lump sums, to chase profits. The market can change directions in an instant, no one can be too sure.

As to the last Q, I would prefer to register into the online service and do additional investments myself, and as the minimum additional investment is RM100, maybe take on both funds or either one depending on which fund's price goes lower.

Cheers. Happy Investing.
And Selamat Hari Raya to all our muslim friends.

I am just starting to see my pittikal out of the red zone this week. Pain lesson chasing the high ride almost 2 yrs ago.

Ah, good catch.

Try this then:

(1) Sale=100. Cost=10. Profit=100-10=90
(2) Sale=9. Cost=1. Profit=9-1=8

Does your financial literacy based on low cost still apply?

lucky you!

KLCI will hit 1660 anytime, and maybe can reach 1700, it's never too late to chase.

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

PCSF

If not mistaken, the fund size of PCSF in its early years was over 0.5 billion... and since i last checked, it was about 300 million ringgit. From various posts in several other forums, it seemed that the advice is usually to cut lost and get out. This fund had seriously under-performed its benchmark, and with each withdrawal that will force the fund manager to liquidate at the wrong moment, it is hard to imagine the fund will perform any better in the near future.

It’s just my newbie/amateur opinion, what do you guys/gals think?

Anyone willing to put fresh money into it?
NAV is currently 0.1458; 37% gain if it goes up to 0.20.
71% if it goes back to initial 0.25.
If that's not attractive enough, its peak was above 0.28.

This post has been edited by j.passing.by: Aug 16 2012, 09:44 PM

Anything that shows a pattern of underperforming the benchmark is a serious candidate for cutting loss. Even just tracking the benchmark is not good enough.

got extra $$
consider to invest in new fund, which fund is better?
currently already invest in PRSF.....

Thanks bro for ur clear explanation. The reason why i decided to quit is because i started my investment 5 years ago and now i am still making lost. I have to admit that during these 5 years, i never put in my own efforts to learn the rules of investment in PMF and i just blindly put my money there by hoping that i will get some returns but after 5 years, i am still making lost and i just felt that it's time to make something right now. Even i put in FD is also better than that IMO but of course i knew my thinking is wrong.

And lastly, I think i should play the games where i know where my strength is. Share market and unit trust is not my strength but i might be more interested to learn on the share market where i got a closed friend that i can discuss face to face more easily.

I think at least now i know low risk fund would be more suitable for me. Learn from mistake i guess?

I don mind to wait another 2.5 years to recover/breakeven but during that time, i will be even more sad because i have invested the money there for 7.5 years and i just got back what i have invested and not even gain anything. That's why i really need some advice to make good use of that money and i don mind to even top up some money to make the situation better.

Investment in share market and unit trust really need a lot of knowledge like u guys here bro. All the guru-guru here ... Sigh ...

If you have moderate risk appetite, go for PIDF.

If you high risk appetitie, go for PFSF.

PRSF was a good performing fund, but the above two has out-perform PRSF.

The above are the funds under my radar currently.

Xuzen

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Added on August 17, 2012, 12:35 pmOh Howzat, you are darn good ...... at shifting the goal-post to skew your argument eh, brudder/sistah! You have a bright future as a sleazy politician.

OK, let'e put more realistic case under scrutiny:

Lets say two imaginary funds called Howzat's Sangat Shiok Fund and Xuzen Tahan Lama fund.

i) Sangat Shiok fund have a AER of 1.5% p.a. and guarantee a minimum return of 10%, and anything above that the fund manager will take a 20% performance fee. (Very typical of hedge fund)

ii) Tahan Lama fund is an idex fund with a AER of 0.1% and will market perform, and its objective is not to out-perform the benchmark.

Lets say both fund start of on 1-1-2012 with RM 100Million and on 31-12-2012 (one year later) Sangat shiok has a NAV of RM 120M (20% return) and Tahan Lama has RM 107M (7% return)

For ease of calculation, lets calculate the AER as on 31-12-2012.

Sangat Shiok AER will be RM 120M x 1.5% plus (RM120M-110M) x 20% = RM 1.8M + RM 2.0M = RM 3.80M

Tahan Lama AER will be RM 1.07M x 0.1% = RM 0.107K.

So the actual return net of fees for Sangat Shiok is RM 120M - 3.8M - 100M = RM16.2M

For Tahan Lama actual return net of fee is RM 107M - 0.107 - 100M = RM 6.893M

The profit margin for Sangat shiok is 16.2/120 x 100 = 13.5%

The profit margin for Tahan Lama is 6.893/107 x 100 = 6.44%
--------------------------------------------------------------------------------------------------------------------

Now lets see how the funds turn out when the market down-turn.

Sangat shiok, dropped 20% and the NAV at end of one year is RM 80M.

Tahan lama dropped 7% to RM 93M

AER for Sangat shiok = RM 80 x 1.5% = RM 1.2M;

AER for Tahan Lama = RM93M x 0.1% = RM 0.093M

Hence the loss margin for Sangat shiok = RM (80M-1.2M-100M)/100M x 100 = negative 21.2%

As for Tahan Lama = RM (93-0.093-100)/100 x 100 = negative 7.09%

--------------------------------------------------------------------------------------------------------------------

So we can conclude that if you do not care about AER and only profit, you will have champange, song and women during the boom time. But when it is bearish environment, you will have none of these.

But if you keep and eye on AER, your capital is greater protected.

Xuzen

This post has been edited by xuzen: Aug 17 2012, 12:35 PM

You are bringing in a whole bunch of different factors that investors should consider before investing, and I'm not disputing any of that.

My initial response was to this question "How does 0.1% annual management fee sound to you? Still want to pay 1.5% AMF?"

My response was: "Yes, I would happily pay 1.5% AMF (and more) if the Fund Manager can return profits more than anyone else".

Note my conditional "IF the Fund Manager can return profits more than anyone else"?

In other words, I don't just look at the AMF alone by itself, I also consider the potential returns (profits), and what I believe the fund manager to be capable of. IF I don't believe the fund manager can return those profits in accordance with my risk profile, I wouldn't even be investing with them in the first place.

No problem Howzat,

We are here to share experiences and opinions. Should it does not benefit you, I wish other silence reader may benefit from the information presented.

I wish to comment a little on your bolded and red-coloured statement:

The uncertainty of IF can be greatly mitigated when a prudent investor has datas such as AER, the fund volatility, knowing one's risk appetite, the benchmark one is measuring against.

Put them into established equation, and compute it. Then compare amongst its peers and select the best risk-adjusted performing funds.

By doing so, it allows the prudent investor to beat the market consistently over time.

Xuzen