which thype of fund is most prifit with low risk?

No need to think, I calculated for you. The annualised return is 2.91% per annum, if you left the money in EPF you would have made more than double the return.

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Wah, how can CS do that to our lowyat no.1 PM fans?

I hate to repeat this, but what is the compelling reason that you are still a loyal customer to them? I know you also buy from FSM and all, is PM attractive in its own way? Sincerely want to know

Some random thoughts…

Cut Lost.

Recently, Warren Buffett said in an interview on CNBC that some folks are not meant to own stocks, because they sell the stocks at lower prices than the prices they had bought.

He could very well be saying about some folks who have bought unit trust funds. Some seems to withdraw and sell at lower value than their invested value.

Why do they withdraw and sell at a lost?

- They had jumped onto the bandwagon when they heard that folks were making easy money from unit trust funds when the markets were on the rise.

- The invested money is short term, and would be needed later in the near future. So, when the money is needed, they had to withdraw even at a lost.

- They can’t take risk and can’t withstand seeing that their invested money is giving negative returns even when they are quite sure that the UT fund will regain its lost. Maybe they were used to ‘fixed-price’ UT funds and comparing the comforts they used to have with ‘fixed-price’ UT funds. They thought they can take and bear the risk, but in reality, they can’t.


Possible ways they could done the investment more correctly?

- UT funds are longer term investments. The longer they are held, the downside risk will be lower. More importantly, the longer they are held, it is less likely to have a forced withdrawal when the invested money is needed. Don’t use ‘short-term’ money to invest in UT funds. Use savings that are set aside for the longer term.

- Think longer term and don’t invest for ‘fast returns’ in UT funds. For fast money and fast returns, indulging directly in the stock market as a retail investor would give better rewards. The daily volatility of UT funds could be in the region of +/- 0.1% to +/- 2%.  While in an individual stock, it could be up to +/- 5% and even be up to +/- 10% or more. You can get faster results with the limited capital in the stock market as oppose to UT funds, which is a pool of many, many stocks and they averages and lower the volatility of all the individual stocks. Also the stocks are picked by the fund manager who, hopefully, has more financial and pricing knowlege than the individual retail investor.

- Don’t do a one-time investment or ‘sailang’ as in ‘all-in’ in a poker game. This is also called a ‘lump-sum investment’. UT fund is a longer term investment, so do long term regular purchases. Whether the regular purchases are at a fixed amount (DCA method) or in variable amount (VA method), it is not that important. Or whether the purchases are done at monthly or quarterly intervals. They are not that important. More importantly, don’t do lump sum or one time investment.

- Don’t cut lost. “Cut lost” is a misguided phrase borrowed from the stock market. It does not apply to UT funds when the investment is for the longer term. As said, UT fund is a pool of many, many shares – maybe up to 80 stocks and more with about 0.2% to 2% in each listed stock. As a retail stock investor, you may have to cut your lost if it is a distress stock with more impending bad news. In a market ‘sell-off’, it is normal market behaviour, it goes up, and it goes down.

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Please also note that taking profit or trimming profit is different from cut lost. Selling a fund when it drops 10% off its peak, could be taking profit since the fund had gone up maybe 40-50% since the initial investment.
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There are 2 possible reasons for doing a lump-sum investment.

1) It is a short term investment with a limited time-frame, with the exit date already known and planned at the entry of the investment.

2) It is a full-blown portfolio of funds for passive income. Say, a retiree at age 55 or 60, may have sold a property and pool the money together with other savings and buy a portfolio of UT funds to generate a passive income for retirement.

Other than these 2 reasons, the investment method is generally regular purchases. Work -> Earn -> Monthly Salary -> Monthly Savings -> Use part of the savings to invest into a longer term savings vehicle.

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Buy the dip!

To access the annual report, you now need an Access Code? What Access Code?

https://www.publicmutual.com.my/Menu/About-...ds/Funds-Report