The Young, the Old and the Restless

The Restless Investor

This is the 3rd and final instalment on the topic of the beginner, intermediate and fully retired investors and what methods they could used in investing into mutual funds.

A brief recap first: the beginner and young investor could use DCA method; the 4-box method would help the older and nearly or already retired investor in determining how much he should have in equity funds, bond funds, or money-market funds. The DCA method with regular buys in the long term, and a one-time purchase that the older investor could use are both buy-and-hold methods.

The “Restless” investor is in a transition stage from the Young investor to the Older Investor. He is not only in the intermediate stage in terms of age, but also in terms of the amount of money he has.

“Restless” because he is not getting any younger and running out of time and patience to slowly accumulate his savings and investments. “Restless” because he has started late in mutual funds and anxious to know how the funds would perform. “Restless” because he has a bigger amount of money to invest in a shorter time period than a younger investor. “Restless” because he wants a fast and quick and sizeable profit before he is fully retired.

And most of all, “Restless” because he is unsure whether he is doing the right thing. Should he follow the crowd when the market is doing exceptionally well? Should he buy or sell? Should he allocate more of his funds to this sector or that region? Should he diversified, and how diversified should the funds be? What ‘asset allocation’ they were talking about in forums, and should he follow or not follow?

In short, what should a middle age investor with a sizeable amount of money do? I don’t think I have any ready answer. All investors are different, with different needs and wants, with different financial objectives, and different risk profiles and different educational backgrounds and understandings on financial matters.

This is the reason why I said the young investor who is earning-saving-investing regularly is having it easy. No worry on having a big sizeable amount of money, and don’t have to figure out how and when to invest the big sum. The importance of DCA is too often over-looked and ignored by new investors to mutual funds.

When the market is doing exceptionally well, every speculator is a hero. One would even ponder whether a one-time purchase will do better than a spread out regular purchases. Yet, when the market is “unwell”; again the same thoughts of whether we should continue the regular purchases or is it the time and opportunity to do a one-time-big-sum purchase?

As it was often said, the market doesn’t care what you do. If it was on a down trend for the past recent days or weeks, should it recognised and acknowledged that you made a new purchase and changed direction the next day or month? But speculators do think they can move the market, or rather the market will follow them like a puppy.

And the problem is that they don’t think they are ‘speculators”. They are financial analysts with methodical financial tools. And they are the experts in their fields... on a subject matter that anyone with an opinion can make an equal claim to be an expert.

So what would this “expert” recommend that the Restless Investor should do? (Bearing in mind that this ‘expert’ is also among the no-so-young and restless.)

1. Try out any options and methods as we see fit. We should have the confidence to venture forward as we are our own experts.

2. Have the patience to wait out the market and be bold in make bigger purchases. Wait for the index to go below the 200-day moving average...

3. See the right and appropriate index that the fund is benchmarked to. If the fund is on the China market via the Hong Kong exchange, don’t look into the wrong index...

4. Always remember that the Restless Investor is in transition to that of the Old Investor. Don't overload the risk in pursuing profits.

If you have any suggestions or thoughts or opinions to the Restless Investor, please write.

Cheers. Keep investing.

hi guys, in dilemma and need some help. I fall under the young one (as in the article above) .

I have some funds in PRSF and topping up monthly the minimum amount via SI.

1. I am thinking of adding some funds into it, but I think I would want to add in the same fund (PRSF) so that it would be easier to track. Is that a good or bad idea?

2. Is it a good/bad time to buy now since our currency is at record low. If you say it depends on the fund type, pls advice the best fund to purchase to take chance of the low currency value.

Thanks.

1. I see the mutual funds as part of personal money management and as a long term savings that were expected to give better returns than FD. So it depends on how much you are able, and committed, to put aside each month. If you are looking to put aside more, then it is not a bad idea to add in a new fund. I would continue with the SI on PRSF, and begin another new fund - especially when the index is way below its 200-day moving average, and a good timing to begin another fund. Would also suggest Ittikal Sequel Fund.

Take a look at their performance - http://www.publicmutual.com.my/application...formancenw.aspx
Both are performing better than their benchmarks.

2. There is no currency exchange or currency risk in the local funds (if your paycheck is in ringgit). Both the above funds are local funds. With the cheap ringgit, I feel a bit reluctant to purchase any foreign funds at the moment, and the feeling is similar to going to Singapore for the weekends when the Sing dollar is now RM3.

It is a good time to accumulate local funds if you are working abroad...

should i let it go or continue ? now value at -2k plus.... total investment 32k become 30k..... sifu advice pls..... thanks

Its getting lower. How low? not sure. But expect to grow up, if not 1 year, 5 years, if not, 10 years.

Thank you very much for the explanation. What about RHB-OSK ASIAN INCOME FUND ? This is a Asean ex Japan fund.

Sorry, I don't monitor all funds in the market and have them at my fingertips. Maybe you can try a top-down approach in selecting funds by asking yourself a series of questions, why, when, what, how, etc. etc. on each of the following:

1. The investment and its objective.
2. The selected fund company.
3. The selected fund category.
4. The selected fund.

The fund comes last, and it is usually the top and most popular fund offered by that company in that particular category.

Good lord just realised I have over 5k in PSF and it has gone down by 2.61% today.. Not sure how much it went down yesterday and the day before.. Shall I pull the plug now?

oh my goodness! Sukuk and bond funds went down -0.34% to -0.41% today. One of the better bond funds went down, this month, a total of -1.27%.

(Glad to pull all out 2 weeks ago after getting hit several days in a row. )

For EPF, is it better to pull off now and invest later when the price is at the lowest ?

But my agent keep saying this is not a right way. Any sifu pls advice.

The quality of the question attracts the answers' quality..

BCTeh - will any human know "when something's price is at the lowest"?
Thus, how to answer your Q properly / value add, since it's a "loaded Q"?

IF your agent keep saying this is not the right way, what is "the better way" your agent suggested?
note - there is usually no absolutes (right/wrong) in life & investing, other than death & taxes

I predicting market going down till next year. No point keep my money in the fund as value decreasing, I'm willing to sacrifice little bit of service charge.
I plan to buy again when the economy is totally crashed.


My agent suggest me to stay on my investment, and giving me idea that my funds will have more value even market crash ... which I don't understand. LOL

This post has been edited by bcteh: Aug 27 2015, 12:07 PM

can you share your agent reasoning for that?
are you investing in "Gold" billion?

This post has been edited by MUM: Aug 27 2015, 12:42 PM

Ok, good - some info / thoughts forthcoming.

I hope U don't mind me asking Qs to probe your thoughts - it will be self-evident why i'm asking the Qs eventually

My Q to U, on your game plan, is then:
AFTER U cashing-out
1. IF the markets keeps being range-bound for 1yr, 3yrs, 5yrs:
ie does NOT fall or go up any more than +/-6%
What will your response / actions be?

2. IF the markets keeps going up bit by bit for 1yr, 3yrs, 5yrs:
ie sneaking up bit by bit +/- 6%pa
What will your response / actions be?

3. IF the market "totally crashed" - when is "totally crashed"?
what is "totally crashed"?
what amount will U go in with?
what will U buy?
what if it keeps going down after 3 to 6 months? eg 1997 crashed to 600-700, paused & recovered a bit, then 1998 all the way down to 200+ points

Please note - economy <> financial markets.
There can be a disconnect
AND er.. some folks (traders & investors) do think that financial markets are AHEAD of real economy by a few months, not the other way round.
Of course, there are others that says it's economy leading the market.
i have no idea which is truer
Thus, i have my own game plans for "normal" + "opportunistic", structured in a big-picture asset allocation parameter.

No.. this is PB Mutual Fund thread. Im talking about my investment withdrawed from EPF.

This post has been edited by bcteh: Aug 27 2015, 01:47 PM

interested in this too, as posted by MUM..."can you share your agent reasoning for that?"

I think my agent's reasoning is similar to Warren Buffet's technique of investing.

If market is bear, Warren Buffet seldom sell, instead he will buy more. Correct me if I'm wrong.

This post has been edited by bcteh: Aug 27 2015, 01:58 PM

if one were to believe this "that my funds will have more value even market crash"
he/she no need to wait-lor...

My agent is talking about long term 10 yrs to 20 yrs because my money is from EPF.
If long term...she could be right.

But I just want to take advantage to gain more money in short term.

good choice....
also wondering how many EPF approved PM funds can constantly beat EPF rate of the past 8 ~ 10 years or so...?
is the agent selection in there?