... no need to re-balance when it is 100% in equities.

I think there is too much talk in this thread on 'asset allocation'. Is it asset allocation meaning allocation on various sectors and/or countries, or is it bond/equity ratio?

In the former, there is a school of thoughts that one should let it be ie. no rebalancing since you don't pull money out of a better growth sector to another lesser growth sector.

In the later, yes since you are maintaining the bond/equity ratio which is a conservative/aggressive risk ratio.
And the trimming is from equity to bond/money market funds... and not from equity to equity (and its reason is same as above.)

And when it is a long term investment ... why not 100% in equities? Unless of course you want to trade... putting some into bond/money market for some switching in the next several months.

But if we can forecast that within the next several months or within a year, that there will be a market crash or pullback, why not pull out all and put 100% in bond/money market fund now? Which we don't do, not because a market crash/pullback is not unexpected, but because the investment is a long term investment.

If the long term investment is for retirement, and retirement is 15/20 years away, why the lesser than 100% in equities? Because you don't have complete faith in some of the funds you are holding? But that's the reason why asset allocation among various market sectors... and doing some thinking/analysis/research on what funds to have before purchasing them...

very insightful...but I made a quick assumption....
let say....using your example for discussion about the 80:20 thing
invested with RM 100 000 at 80:20 (RM 80 000 : RM 20 000)
4 Fund houses ( assuming not all FH has the EQ fund that I liked (regions/global exposure/performance, etc) and also to have a diversification among FHs)
therefore each about RM 20 000 EQ and RM 5000 FI per Fund house
if EQ made 10% = RM 2000 profit....will shift out to bond
why limit one self to only that fund house when the Sales charges of RM 2000 @ 2% = RM 40 ?

  uuumph....even if invested RM 80 000 EQ and RM 20 000 Bond with 1 FH...
if EQ profit is 10% = RM 8000...if switch this RM 8000 to other FH at 2%SC ...the SC is RM 160

why would I be tie down to only 1 FH and having 1 FH (enhances my RM 100 000 risks) for RM 160?

that is only if invested with RM 100 000

hopefully my calculation is correct ....

if really want to "save*"...try UTs not.......the RM 100 000 AUM at 2% Mgmt + Misc fees is about RM 2000 per annum "rain or shine" even though we don't get to "see" it ....
(* like reducing leakages, making invested monies more efficient in making monies, etc)

Hi, I am referring to asset allocation in terms of bond/equity ratio. It is tempting to put 100% of our investment in equity funds since in the long run it will provide better returns as compared to bond funds. Yes, we can do that.

But what happens if there is a market correction or if the market crash? Some of us here were unlucky enough to have gone through the Asian Financial Crisis of 1997 and the global economic crisis of 2008. It was no picnic investing during that time.

Imagine if you have invested RM100K in 100% equity funds. In one year or less, you can lose 20K. In the 2nd year, you can lose another RM10K. Do you have the stomach to run the risk for the 3rd year?

Surveys show that investors think they have a greater risks tolerance than they think. But in actual fact, most of us are only conservative or moderate investors. Therefore having bond funds of at least 20% in our portfolio helps to minimise the losses.

Happy Investing everyone.

P/S: If you are only investing a small amount, then by all means please go ahead and invest 100% in equity funds since it may be difficult to do asset allocation and the losses would not be huge.

Well, if we follow the principles of John Bogle, the founder of Vanguard, costs is an important consideration when we invest in mutual funds or unit trusts. For example assuming we save the SC of RM160 and invest it in a unit trust with a return of 10% per annum. After 20 years, the principal sum and compound interest will amount to RM1076.40. Of course we may not get a 10% return every year and the inflation rate has not been taken into account, But I am sure you understand where I am going with this. Multiple the sales fee of RM160 by 10 times to RM1600 and we are looking at RM10,764.00 profit after 20 years.

I don't understand your statement ":hmm: why would I be tie down to only 1 FH and having 1 FH (enhances my RM 100 000 risks) for RM 160?"

We are not investing RM100K in one fund house, e.g. KGF, but diversifying it into different global funds, asia funds, Malaysian funds, REITs and bond funds. So the risk is minimised.

If you are referring to the risks of investing RM100K in one FH, i.e. Fundsupermart, then I believe this issue has been covered previously by other members in this forum.

Happy Investing!

Agree with you.    I'm maintain current 65:35 equity and bond fund not including with my CMF.
try this to text with fear/greed index per day FYI.
http://money.cnn.com/data/fear-and-greed/

Fundsupermart isn't a fund house. It's tesco combine with mydin with its offspring that looks like giant. In short, its just a third part who has a platform to sell other fh's funds.

Malaysia’s falling international reserves in the last four months may lead to financial crisis if Bank Negara Malaysia (BNM) does not implement adequate measures, according to think tank Institut Rakyat.

Malaysia Foreign Exchange Reserves

Foreign Exchange Reserves in Malaysia decreased to 111679.90 USD Million in January of 2015 from 116978.20 USD Million in December of 2014. Foreign Exchange Reserves in Malaysia averaged 81698.29 USD Million from 1997 until 2015, reaching an all time high of 155165.30 USD Million in August of 2011 and a record low of 20234.20 USD Million in August of 1998. Foreign Exchange Reserves in Malaysia is reported by the Central Bank of Malaysia.

http://www.tradingeconomics.com/malaysia/f...change-reserves

what is the implication of a falling foreign exchange reserves?
why suddenly fell so steep?
interest rate to rise/fall?
mkt to go up/down?

I don't understand your statement ":hmm: why would I be tie down to only 1 FH and having 1 FH (enhances my RM 100 000 risks) for RM 160?"

We are not investing RM100K in one fund house, e.g. KGF, but diversifying it into different global funds, asia funds, Malaysian funds, REITs and bond funds. So the risk is minimised.

Well, if we follow the principles of John Bogle, the founder of Vanguard, costs is an important consideration when we invest in mutual funds or unit trusts. For example assuming we save the SC of RM160 and invest it in a unit trust with a return of 10% per annum. After 20 years, the principal sum and compound interest will amount to RM1076.40. Of course we may not get a 10% return every year and the inflation rate has not been taken into account, But I am sure you understand where I am going with this. Multiple the sales fee of RM160 by 10 times to RM1600 and we are looking at RM10,764.00 profit after 20 years.

Happy Investing!

"We are not investing RM100K in one fund house, e.g. KGF, but diversifying it into different global funds, asia funds, Malaysian funds, REITs and bond funds. So the risk is minimized".
to diversify into different global funds, asia funds, Malaysian funds, REITs and bond funds.....cannot have 1 fund house that have all these funds that suit each individual and also even if the fund house has all these funds,...their performance may not be on par with others....(some are good at Big cap, some are good at Small Cap) .....example...if RHB has a GOOD asean fund...but you won't buy it BECAUSE RHB bond fund has redemption fees if sell < 12 months....so you let go of this RHB Asean fund to go into another 2nd choice fund because of RM 160?
(OOPS RM 40 only because IF have to get into 4 FHs)

why tie down to only I FH...is if I have RM 100 000 to invest in UT,..why have to let this RM 160 to limits oneself from getting into more FHs to get more choices of funds, more diversification of portfolio, more risk diversion...

Allocate the percentage of regional diversification, select the best fund for each region ... simple no?

Fyi, eunittrust finally updated KGF distribution holdings today. Took them almost a month  So slow 

It's all about the US interest rate hike. Just ltook at Q4 2014, one hint that US fed might raise interest rates... It global sell off happened.it took us months to recover, got worse becoz of oil prices.

Imagine what if US fed decide to raise interest rate for real? I think it will be a massacre. my funds have been performing but slightly below expectation.

maybe your funds had been performing but slightly below expectation because the FED had been hinting about it for the past 1 year and the mkts had been expecting it and thus the prices had been reflecting it too?
Noticed many FHs had been heavy holding cash.....if they are allowed by the mandate.
IF, Pulling back now can provide peace of mind....then it is a right move...

Happy fishing in July...

haha happy fishing in July = happy timing the market ? 

may the one and only xuzen's crystal ball be in his favor 

Morning... Anybody topping up for this Lipper promotion thingy?

Morning... Anybody topping up for this Lipper promotion thingy?

  nope.... read post #616,...I was referring the July fishing appointment back to him.