Started early Qtr-3;Yr-2013, after he withdrew from his KWSP. At first he wanted to sai-lang everything into stock market (blue chip like Maybank and Public Bank). I told him... relax, man-man lai. No need to rush.

Xuzen.

Public Bank dividend yield is like...worse than FD

Unless u trade it on and off to realise some capital gains

How does it work? You mean you buy a huge amount of units and then you sell off bit by bit every month to get that RM2k? Or you keep buying and selling from various UTs and it works out to about that per month? Sorry, confused a bit.

Give a simple picture
Initial: RM1m
Fund A RM500K
Fund B RM500K

1 month later...
Fund A RM508K
Fund B RM502K

So, u sell 4K of Fund A and RM1K of Fund B and leave the rest to grow

Something like that...

Ohh...I get it now. So the funds are kinda like a "sure grow" to make sure they have units to sell without touching principal. I'd be happy if I could have that kind of returns every month, lol

Don't assume that.

It COULD also be like this:

Initial: RM1m
Fund A RM500K
Fund B RM500K

1 month later...
Fund A RM498K
Fund B RM495K
I.e. net growth only -RM7K in which case u will withdraw lesser, withdraw nothing or even top up

I was just trying to illustrate what xuzen does with his client's account

This post has been edited by Pink Spider: Jun 17 2014, 04:38 PM

Ya, that's what I meant...in order for clients to have something to withraw without touching principal, the funds must be those that keep growing or else no profits to withdraw, lol...

Nothing is 100% sure. If there is something that is "sure grow", it smells like a scam. Either that or a hardup agent trying to sell you something.

Say you invest 1 million (for retirement), at the end of the year, you withdraw 5% or 50k as your annual budget for spending, travel and whatnot for the entire year. Repeat this every year till you konk!

There will be bad years, as well as good years, and hopefully the fund will never goes down to zero, meaning you run out of money before you croak. That's why you only set a low withdrawal percentage each year, while you expects the fund to return (on average) 6% and above.

And to take care of inflation, that's why I mentioned a withdrawal of 4%. And if I expects the portfolio to give an average return of about 8%, the difference is re-invested back into the fund. Thus the fund gets fatter each year, and the withdrawal gets fatter too, even though it remains at 4%.

That's why I said 'truly perpetual' as by the time I croak, the portfolio is still there, and it is adjusted to inflation on its own, it should be more than the initial 1 mill.

There are several ways... switch some units from equity funds to bond or money-market funds each year, and withdraw out of the bond/money-market funds each month... structure the portfolio to have funds that have distribution in various months or quarters of the year... structure a major portion of the portfolio to have cash distributions... structure the portfolio to have more 'dividend' funds... re-balance the portfolio each year by selling some units equally from all funds or a selection of funds... a combination of all these methods.

This is from a normal investor viewpoint. Maybe a licensed adviser would have more tools at his disposal without incurring unnecessary switching and exit fees.

...wow, that's some work there, lol...didn't think of it in that way. Thanks for your input!

A lot of good stuffs coming in these few days. Really appreciate the different views and opinions provided. Esp when different people have different goal and risk tolerance.

Wish there is an easy way to save these posts. Cannot save it Pocket one. Haha. Bookmarking the posts would be untidy. Copy paste into Google Drive + link to post then.

Xuzen, when using Modigliani, which figure do you use for the standard deviation of the benchmark portfolio. Or a more accurate question would be, what should our benchmark portfolio be? Do we track the KLSE? And normally how long is the time frame for period that you select to calculate the ratio?

Is European equity is expensive?

Product manager from Schroders, James Dawson has different view:

AMSCHRODER EUROPEAN EQUITY ALPHA

URL: http://www.fundsupermart.com.my/main/resea...?articleNo=4726

Sta-Dev of benchmark usually not easy to find, however, Pub-Mut, despite my criticism, has a very good internal data that, unfortunately less than 1% of UTC knows or will ever use it.

I get the Benchmark Sta-Dev from their internal data which they update quarterly to calculate Modigliani. It is only given to UTC and I bet if you ask any regular Pub-Mut UTC, they will give you a blank look. Even finding someone who knows what is a Sharpe is difficult. The data supplied by Pub-Mut is 3 years annualised. That is what you get when Pub-Mut decided to do UT biz like MLM style.

At first I wanted to write how I do the pay-out for my client, but I decided not too... called it trade secret, something for me to keep on cari-makan.

Actually it goes along the line of Pink Spider's line of thinking with some minor tweeks here and there.

J.passing.by, it is not so complicated.

Xuzen

Oops, sorry I broke your trade secret!

Pinky

Malaysia market unexciting: HwangIM..Posted on 18 June 2014
Asian stock markets are expected to continue its upward trend in the second half of the year but Malaysia is unexciting due to premium valuations and lacklustre earnings growth, ......
.... but generally other markets will probably do better (than Malaysia) within Asean,...
http://www.thesundaily.my/news/1084984

i am currently 40% Eq m'sia leh..

haha, you do regular tweaks while I'm more 'buy-and-hold' with yearly re-balance. Both can be just as simple or complicate. But I'm not full time following the market.... and also I don't have to analyst any internal or house data, just seeing the stars (from you-know-where)!

Cheers.

quick question: i register the fundsupermart.com

1. if i active my account but not buying or selling anything ( still new, wanna learn/monitor) will i get charge for the account?

This post has been edited by yahiko: Jun 18 2014, 12:45 PM

nope,..but you might missed out the promotion for new accounts holders...
http://www.fundsupermart.com.my/main/resea...?articleNo=1985

why dun you read more and get ready 1st before registering...who knows you might change your mind about UT after reading more

But then again... 450K in an FD in MBSB or BR... is also perpetual, depending on expenditure.

Rm450,000 x 4.5% = Rm1,687 a month. Not too hard to survive either considering, but of course UT is usually more than that, and we always want more profit out of it



This post has been edited by wodenus: Jun 18 2014, 01:34 PM

so your benchmark portfolio is one of pub mutual UT?

I learned about Sharpe ratio from a finance unit that I took. I am using it as another factor when considering different UT, other than their consistency in yearly returns. I am using the straight up Sharpe ratio that is usually given in the fund fact sheet.


If average inflation is around 3% a year. Today's 2k would worth 5.8k when I retire. Crazy.