That distribution thing again ah? LOL. No going to waste time reading all the posts; to keep it short, RO Player got it wrong. How good is a fund depends on its consistent returns; it can never be measured by its distribution income.

Distribution income is good when you already have a sizable fund and are depending on the distribution as a regular income. This is when it would be good to switch from growth funds to 'dividend' or 'income' funds that has annual distribution policy.

BTW there was a post that all the non-EPF investments are registered as a pool in a single name under a trustee (assigned by fundsupermart); the distribution income will then re-distributed. I wonder how the trustee handle this re-distribution when there is "distribution equalisation" involved.

This post has been edited by j.passing.by: Jun 14 2014, 05:24 PM

As like Putin, I'm not a judge... and this is not a court!

Just that I stopped reading after coming across this "IMO, higher distribution is better..i.e. more units is given to the holder. No doubt, total amt profit/loss is the same, but once NAV is gaining, your profit is getting fatter & fatter.."

It's not an opinion, it's whether you got it right or not, and you got it wrong.

No matter how many units you have, 1000, 2000 or 100,000, any gain (in terms of percentage) is still the same percentage. More units from distribution do not give any extra gain. So you see, it's a matter of maths, not "opinion".

Distribution as mentioned was for a) marketing (as like Apple splitting their shares) and b) cash distribution, as opposed to re-invested distribution. So distribution can be necessary, and you seems to get it wrong again!

"However, in normal terms where we dont have $100K lump sum every year or three, then DCA, VCA or value hunting makes more sense coz if we just hold and time, bila nak masuk?"

"Nonetheless, DCA is far less nerve-wracking than a lump-sum investment, and if there is a major bear market around the corner, it can really pay off. In some situations, it is an ideal way of controlling both risk and stress."

Agreed with above. But investing yearly, whether it is 10k or 100k, can also be considered DCA if we do it 20-30 years.

And if I read it correctly as in the last part of the post (http://www.bogleheads.org/wiki/Dollar_cost_averaging), lump sum investing is defined as a one-short, once-in-a-lifetime entire investment immediately.

This would means EPF withdrawal at age 50 or 55 for most of us. Might be too late to teach old dogs new tricks... investing is also an emotional game, and even though the market will turn around when there is a down turn, and even when all the financial experts advised against selling, new investors at that age (and at any age too) will tend to pull out...

well, that 'professional' article points out that even dividing the investment into 1/6th or 6 months is DCA. In your case, its 60 years.

Agreed with above; that there is an advantage to invest a big sum of money all at once (lump sum investment) than splitting it (DCA investment).

But I would rather take the option of investing as early as possible while we work, earn, and save without accumulating the sum of money into a big pile.

This lump sum versus DCA is academic! Or maybe not... as there's my EPF.

(That's why I was not too happy with EPF's new basic savings table which is holding back too much.)

I'm aiming for 4%. (If I wanted to have 2k/mth, this means 2k x 12 x 25 = 600k)

Anything above 4% is plough back for inflation. Truly perpetual.

(Keep in touch.)

You misread... the 4% is how much I aim the pool size to be by withdrawing only 4% annually.


This post has been edited by j.passing.by: Jun 16 2014, 11:44 PM

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.

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.

I took some time to reply to your voodoo-maths opinion... and yet you brushed it off. It was like talking to a wall, or a blind and deaf person.

Posted by,
another person who will be ignoring your posts.

I wouldn't care whether someone buys before or after distribution... it is their money and it is their wishes to buy at lower NAV prices and get more units, the choice is entirely theirs.

But spreading stupidity and outright lies to get investors to respond and react is another thing.

Yes, it is more profitable to have more units, and yes, your returns are higher with more units. But these are half-truths. They are correct, since if you invest more money and buy more funds, and hence more units. Invest more, allocate more money into equity funds, and yes, higher returns and profits. (Albeit, higher risks.)

But it is pure nonsense to tie these half-truths to more-units-higher-returns with distributions.

And indirectly leading to stupid thoughts that resulted in Distribution---Gives-More-Units---More-Units-Higher-Returns---Distribution-Gives-Higher-Returns.

It is just as stupid to post that the best time to buy is just after distribution. Note the 'best time' in the sentence - this implies that the time just after distribution will gives a better (if not the best) returns than at any other time.
(Wah, if like this, no need to have analysts or look into market or this forum - all investors just buy after distribution!)

If there is any other newbie asking whether it is the best time to buy after distribution, because their agent said the NAV is lower and will get more units.... "TELL THE AGENT TO FLY KITE!".

Good shooting! But newbie don't know why he kena tembak... maybe he was lead up the tree by clowns who think it is a good time to buy when the NAV price drops. (And everyone knows in advance that the price will drop after distribution, and you will get more units for your money... so is that a good time?)

Straight answer: Only clowns monitor UT prices closely to guess whether it is a good time to invest or not into any funds. And only clowns will try to answer the 2nd part of the question when the 1st part is already wrong.

You have to remember that there are at least 2 distinct types of investors - those starting their accumulation of assets and those with matured nest egg portfolios.

For the former, I wouldn't waste time and wait for a better time to get in. You do DCA for a number of years... in the long run, this could be better than just putting the monthly savings in FD.

For the latter, you could start with a full portfolio - using whatever bond/equity ratio that suits you. The recommended standard is 40% bond (or money market) and 60% equity. And you don't care how's the market because at this stage (retirement) all the distributions are set to "pay out" in cash. Index is lower, of course the total sum of the nest egg (or total value of the porrtfolio) is lower,,, but you don't care because as long as it can give you enough cash distributions to 'survive', then you're okay.

And also at this latter stage (for example withdrawing out of EPF at 55), there is a short post (in the other thread) on the merits of DCA vesus Lump sum investment. I think more people will opt for limited DCA, as what Xuzen mentioned doing with one of his clients.

In other words, trying to time the market is something to do for fun and hobby for folks with nothing much better to do. I'm doing it using only a small percentage of the portfolio...

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

okay, already edited. Good to know some people know the different between 'pay out' and 're-invested'.

This post has been edited by j.passing.by: Jul 14 2014, 03:53 PM

What's your definition of a 'good' fund? You could be getting the wrong 'fishing' method - like advice on how to catch catfish with bare hands, and you use it to catch sharks.

I don't have the means (both knowledge and data) to analyse any funds, so I leave it to the experts... go to the MorningStar website and look at the number of stars, the more stars the better.

Using Wong Sifu take on 'investment portfolio', it is not practical to use any surveyed ratios as a guide... so it will be a futile exercise, and only for the sake of curiosity into what another person have.

UT is a relatively new industry in Malaysia (what am I talking about, relatively the whole country is new). If compare to an older country like USA, folks there seemed to more into UT and most of their older folks seems to holding only annuities, pensions and mutual funds. Hardly any properties for rental income.

Investing into properties for property appreciation and rental income is, IMHO, passe. For the younger folks, it should be all mutual funds.

No, you must know what type of funds you want. The morningstar website has more details on each fund - large cap, small cap, middle of the road, Malaysian, Asian or Global... and they rate the funds with a number of stars.

It's something like Rotten Tomatoes... you know what type of movies you want to see, find out what's screening, then see the ratings to decide whether you want to go see or not.

As a young beginner, choosing funds is actually the easy part, once you have seriously determine why you want to invest into UT. If you are investing for retirement, then I have the following opinions. If you are investing for short term, say to built up savings for buying a house, ask further in this forum for more opinions.

Start with a local and conservative fund which you can really trust and have faith in - meaning it must have a good track record for at least 5 years. Some would prefer at least 10 years. Do monthly 'Dollar-Cost-Averaging' investment as you earn and saves.

Build up a sizeable amount before you diversify into more funds. You should have by then, read up about portfolio. There are portfolio models which you can copy and tweak a little to your own choice of funds.

Also by then, you would have also know more about diversification of a portfolio, stability of a portfolio, and re-balancing of a portfolio.

The difficult part in this learning process using a forum, is there are many opinions and many situations. The many opinions are easy... follow those who sounds logical and rational.

The many situations are the difficult part... you have to determine whether the posts are appropriate solutions to your own situations. For example, if you are doing DCA, posts that say the index is dropping and say sell all, you can ignore them as they are not relevant to your situation.

There are rated aggressive funds like those Indonesia funds... a young beginner could be 'emotional' even if he/she do DCA... when an aggressive fund dropped like 3% in a day, and another 2% the next day, then continue dropping little by little for weeks, he/she can lost faith in the fund and do the wrong thing like 'buying high, selling low'.

And all 100% into equities... and won't even consider fancy bond/equity ratios.

For long term, I'd prefer to go conservative and have 'compounding magic'.

For short term trading, I'd go for these Indo funds.... missed this trade, up 20% YTD.

That's why I only play play with a small percentage for fun.

Human beings are emotional, can't do without it.

BTW I was referring conservative/aggressive to the volatility of the fund. A good conservative fund can have double digits growth within a year in a bull rally.