Even if an investment is capital guaranteed, your capital is practically not guaranteed due to inflation.
Normally capital guaranteed investment has lock-in period, for example 3 years.
If you have put your investment in FD for 3 years, it's 3 X 3.7% = 11.1% gain but if you put in capital guaranteed investment, you practically lose this 'guaranteed' return of 11.1% from FD, and worse still, you lose your money value through inflation as well (although same to FD).

But of coz, you might gain higher than FD if the investment works well.

So it's up to you to take the risk!

Define bargain price.

Well, I guess sometimes "bargain price" will be interpreted differently by every person. To me, bargain price means that the price has drop substantial enuf that it is now more attractive to purchase it than before.

Take PCSF as example, it went up highest at 0.292, even when it drops till about 0.275 i still dun consider that as too attractive, but when it drops below 0.25 or around 0.25, then it is really bargain price, as it went back almost near the initial offer price, and my cost/unit is lower rather than i buy at 0.275.

Well, everyone have their own target "bargain price" so, it is up to you how you look/define it

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same concept, buy low, sell high...

This post has been edited by kingkong81: Dec 27 2007, 11:14 PM

Received this PDF from my friend yesterday titled:

Top 10 Mutual Funds for 2008

Isn't funds more about holding it long term instead of constantly selling/buying?

True...though it is long term, does not mean if the fund price is high, the projection of growth is not much with unfavourable market condition...will you still go n buy??

We are trying to buy at a lower cost so that it can maximise the return...

When the fund reached its peak (or your target profit), you can sell it off to lock-in your profit, (sell high)...then when the fund went back down again, u can go in again. Holding it alone for long period of time will also give u substantial return, but u can maximise your return by knowing when to sell & when to buy. And surely, this kind of sellling & buying cannot be done too frequently...if not, you r only going to incur losses through irrational buying & selling.

Agree, I am also doing this for my UT investment... However, when is the peak and when the lowest is anybody guess. However, with some discipline and knowledge of investing, you can certain maximise the gain and manage losses rather then just hold for long term.

Long term is something of the past I believe.. talk about mid term few years, say 3-5 years or short term, say 1 year.. I remember those great days when stock rally, UT also rally, however the Technology UT to date, has yet to recover ot its previous high in those gloriuous day... its already been some >10 years, and still it is... What happened? Analysts in SG is advice people differently for those who understand a little more of what they invest and the risk involved to adopt such strategy... I do practice this...

If you are happy with the fund manager and the performance of the fund - no problem.

And some managers/funds are good, and some are not. Which means that if you have got a not-good one, you might have to consider cutting your loses...

Given that almost all funds charge at least 6% total fees and inflation is at around 5%, to get 20% back the fund will have to perform at least 30% growth.

If the fund's growth average 15% then it's just a 4% return after deducting the fees and inflation.

You might not even get that. My point is - if the fund has been underperforming, you may have to consider whether there's any point in hanging on to it for long term. Sure selling it now may mean lower profits or even a loss, but is it going to get any better long term?

That's the 800 pound gorilla no one likes to talk about.

When will a big loss recover itself? No one knows.

yep..so how ar? if u're in that situation, do u keep waiting? or sell out at loss?

I have been in this situation before with one of my funds.
I saw better potential in another fund, so I switched it out.
Clearly I could see the huge difference that made.
So, even if your fund is underperforming, there are still other better funds to look at. Switch to those better funds when you found one that is better than your current fund.

It is not easy for fund to get a 30% each year. Bare in mind recent last 2-3 years of magnificent performance is very difficult (although not impossible) to be repeatable in the future. Equities market won't have 20-30% rise each year if one studies back the historical data of equities market. Long term average return for market is about in mid-teen number which considered quite good already.

That's why sometims high initial service charge ruin the picture and attractiveness of UT. If one fund charges initial charge of 5.5% added up with annual management charges of 1.5%. 7% are gone in the first year.

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Added on December 30, 2007, 9:38 amThen it is your decision in the first place, you bare the consequences.

There is not sure gain in investment, you want the higher return you bare the risk if something goes wrong.

That's why sometimes personally find a bit irritating for agents to tell customers when ask why fund goes down, they will tell you that UT is about long term one, or after long term will gain one, don't worry.
Yes, no doubt about it as UT is about long term investing but it doesn't mean long term must gain one which may somehow misleading. No offence to agents out there as there are lot of good agents out there also.
Just telling UT customers that UT will surely gain over long term is not that right although generally equities market do rise over long term. But it doesn't means it is a must or guaranteed. Even UT is gaining if it is only on par with the return rate of FD interest, it is considered poor already.
I would prefer agents or bankers tell the customers properly and explain the nature of risk if UT rather than a simple word of UT is long term investing so short term losses is unavoidable (this reason is widely common used when being asked by customers when fund making losses time) or over long term must gain one.

If you entering UT at the market bubble or peak time, then your fund will be struggling to find a return. If one invested in Japanese fund (back 1980's when Nikkei approaching 30k mark) or technology fund during 1999-2000 before dotcom bubble bursting time, until now they are struggling to breakeven after 7 years or 15 years for Japanese stock. How much is the return rate for those fund? Breakeven already an achievement for those funds already.

This post has been edited by cherroy: Dec 30 2007, 09:38 AM

Precisely, even in SG, many just tell the nice side of the story.. My AIA agent, a responsible guy I must say, even he himself lack certain knowledge when he sold UT to me... After one year of making 20% lost, I decide to sell on my own UT with AIA online.. much to his surprise because he was remanded by his boss as he had no idea I had sold it online, and he told me the same story... long term... long term.. Now he dare not sell me any more UT as even I can proivde better UT advise than himself. Many other questions, agents could not answer me when they try to sell me... In fact, I purposely post them those issues... to test them. I have never had any intention to buy from them since I can do it myself online in SG and the sales charges is much cheaper... 1.5% mostly and at times 2.%

Recently, I met my wife's classmate in Mid Valley while on a trip to KL. She told me she had just got her licence to sell UT and I cited the sales charge issue and reduction in commission. She told me, she will only make half of the commission, the other half goes to the company. If the sales commission is reduced, it will eats into their sales income, because the company will still take their stake.

This post has been edited by bbmars: Dec 30 2007, 11:53 PM

Hi,

Been reading the thread and is wondering whether there are any links that can let us see charts and graphs about the UTs performance?

Business Times Online does not provide charts.

Thanks

You can get the performance at UT's website, example www.publicmutual.com.my to see the Public Mutual funds, and www.oskuob.com.my to see the OSKUOB funds, etc...

Thanks. Got it.

I have another question, based on my reading I understand that there are different types of funds. One such example is an income/dividend fund which aims to provide steady recurring income to investors. How does this type of fund work compared to growth fund(emphasizes on capital growth)? Someone care to explain?

Question:

For EPF Investors in Unit Trust, there are now gazetted funds that are "EPF Compliant". Now, I have in the past before the new EPF ruling came about invested in funds like Public Industry Fund and Public Aggressive Growth Fund. Now they are deemed non compliant due to their foreign exposure.

I have also found out that we cannot switch these funds to other "non compliant" fund but we can switch to "compliant fund" but can no longer switch it back out to "non compliant fund."

My question is: Is it wise to give up the growth in these two funds by switching it to a bond fund and later back to an equity based fund which is comparatively second tier in terms of performance compared to PAGF or PIF? Of course the "compliant" funds that I am looking at are PRSF, PIDF, PIX and PSSF. Please advise if there are "better" performing funds than these few. Or should I keep it in these two funds even when market is barelling downwards just because their upward potential is greater than other funds?

The difference will be in the stock selection. The income/dividend fund will mainly go into high dividend yielding stocks, blue chips...mostly stocks which r more stable and have good record of giving dividend.


If you have confident in the fund to grow more in the future, might as well keep it.
But EPF really make things a bit complicated by disallowing the old scheme (EP1) fund to switch between them, but instead only allows it to be switch into new scheme (EP2) or the "compliant fund".

You should oso look into the "compliant fund", whether any funds in it will provide you with a better growth potential than the current non-compliant funds you are having?

But if you are thinking to secure your capital & profit, you can consider switching into compliant bond fund.