Aiyeah I am not Jeffrey Gan ! Before this, I was very curious about UT, couldn't get any reliable nor easily understandable books. After reading this, I felt like turning into a new leaf . Thus, hoping to share this with everyone .

This post has been edited by countdown: Nov 24 2006, 09:31 PM

No... that one is really a CiFu. I'm still reading that thread now. Still not reaching the page he mentioned. I'm just in page 19 of total pages of 78...


Mate do have points here. Personally I'm still very new to Funds. I would take your advice seriously here. As some of my money is really there. Would consider switching when I got enough knowledge on when to switch, what to switch. In actual fact, I'm learning... Thank you very much.

Back to discussion, for some people. They won't get much money every month. And the way they invest also different. Your way for sure is quite dynamic, as you got experiences. However, some people are not. Their case might not be the same as yours. They treat it as a type of saving plan only with higher risk than Fixed term deposit. Thus, higher return in their book. True that, monthly investment got charges. But for some people, they are really doing it.

For your information,
One is 16.74% and another one is 14.78% now... Should I take out the money now? Both also in one year. What is your recommendation... ? mate...


edited: post #59 in this thread very attractive to me. Think I got to see some newspaper report or validated news. Then, would make decision on that...



cheers,



Thank you so much for the tip. Would try to see if can buy this book for reference.

This post has been edited by edifgrto: Nov 24 2006, 08:57 PM

respect respect
anyway, im noob here. will start revise....Haha.....
learn the concept of making money using money...

Do you mean that we should not invest in mutual funds every month? I think the agents always recommend us to do this, can't really remember the name, something like Cost Averaging something....It is initial investment some amount, then every month put in same amount of money to the funds.

Can anybody discuss about the pros and cons of this strategy.

i hope to know the right way to invest too....any1 mind to elaborate?

Unit trust its all about units.

Fluctuating Market

Average unit Cost for Unitholder A - RM6.40 (RM32000 / 5000)
Average unit Cost for Unitholder B - RM4.72 (RM30000 / 6350) ->DCA

pros
1. solve timing problem (when is the right time to invest - lumpsump investment)
2. earn more units at lower price
3. average cost of investment wil be lower in the long run, in order to maximise its benefits

cons
1.dollar cost averaging concept helps (but does not guarantee) an investor obtain favourable long-term investment results where the trend in unit prices is upwards. (unit price keep on increasing la never come down or does not fluctuate)

The rationale for investing in this way is that it is dificult, if not impossible, to invest at the bottom of the market, and most investors (particularly small investors) are likely to be better off investing on a regular basis throughout all stages of a market cycle rather than investing all their capital at one time.

By using the concept, it is said that investors can turn fluctuating prices to their advantage; especially if prices are moving down, they can purchase more units and reduce the average cost of their entire investment portfolio. By buying more units when prices are low and fewer when they are high, investors give themselves an advantage over other investors who try to time their investment decision - and get it wrong!

GIven that most investors in a UTS invest for the long term, the concept of dollar cost averaging works well - although there are no guarantees of investment performance! Its real value lies in a commitment to regular investment, irrespective fo market fluctuations. It avoids the need to decide to invest when the market appears to be too high, or to be hitting new lows. Investors buy more units at market lows when fear is greatest. As the market recovers, such purchases will prove timely.


my 1% of u.trust knowledge.... if you got more.. mind to share with us.

cheers

Actually, monthly contibution to buy UT is sometimes not worth but it depends on market situation.

Example,
Recently, market is on the way up for last 3 years, so UT price (equity) become higher and higher, so if you apply monthly contribution then your buying price become higher and your average cost become expensive. If market plunged then high probably your UT will suffer loses unless market keep on rising non-stop for years, is it possible? No one knows. If you believe it will, might as well throw whole lump sum together at the first place.

However, if the market is on bearish mode, become lower and lower each day, then monthly strategy might be good to bring down your average price since no one can guess correctly when is the lowest point.

Don't blindly believe the aganets sometimes, monthly contribution mean that monthly steady income for them only. Sometimes I feel those agents (but not all) are irresponsinble and what they are more concern is their commission rather than assist customer in investing.

Buying equity UT is almost as same as share since you are indirectly buying shares also, so the most important is timing. If buying at a too high price when stock market is bubbling then your UT might struggle to give your a good return, worst still might as well losing money.
But one doesn't need to buy the lowest point and sell at highest point since it is almost impossible to do so. Just when it is low then it might be a good opportunity to buy and when market is unreasonably high then it is time to sell. If after you sell then it goes higher, (often happen) let it be, at least it has generated you handsome return rate already. When market is expensive, it can't stay long, it will correct itself, after all valuation of stock market can't run away its most fundamental factor.

Bare in mind, buying equity UT is same as buying share! Just indirectly, there is no guanrantee return!

This post has been edited by cherroy: Nov 26 2006, 10:32 AM

10x for the explaination. But last time when i ask the agents, they tell me cant have cash either for dividen or sell off. They give another value(i forget already). Then he say if want to convert to cash will have some charges and he advise us not to withdraw. wat is he saying actually?

I think he/she probably said regard the divided/distribution. By default, the dividen/ cash distribution if any (normally got) is reinvest back mean that the dividen money given is taken to repurchase the unit at current price (the time dividen given out not your original bought price). So your total unit become more but you can also opt to take as cash which you have to mention it when you bought the UT at the first place, there is a section in the form for you to choose but I know some agents/banks has tick the section for you (they said by default) to repurchase without asking at all. With repruchase, agents/banks will earn commission from it, if you take cash then they gain nothing.

But if the UT declare as unit distribution then you can't take cash but if they declare as cash dividen then by law you have 2 options to choose.

Ic then. If bout the selling unit then got any charges? I remember that say i planned to sell it later then he tell me after sell, if earn not much at 1st, probably loss more than earn coz got charges.... So how is the charges actually? He not mention that part to me...

correct, u will suffer a loss if u sell it before the price rise a minimum of 6% (assuming the comiss stands at 5%)

example. if listed (per unit)
buying price at RM1
selling price at RM1.05

it means that when u buy, you are buying each unit RM1.05.
when u selling, u are selling back each unit at RM1.00. Therefore you are making a loss of muinimum RM0.05 per unit excluding any other service charges.

side note: i dont feel like particular interested investing now (i got no account yet), price are way up up. hoping to jump in after a technical correction in the market.

side side note : can any pb unit trust send me an application form? pm me and i'll pm u the address.

This post has been edited by ante5k: Nov 26 2006, 08:29 PM

ante5k is right. According to the Malaysia Securities Commision, the charges for the unit trust transaction fee is between 5-7% depending on different finance institution.
Unit Trust is medium to long term investment vehicle, because the initial service charge is 5-7% and need some time to break even.
Use the (Selling Price - Buying Price)/ Buying Price, you will get the initial service charge for the particular fund.

the charges u mention here is mean the loss if sell the unit that lower than ur price when i buy?

How bout if i buy RM1 per unit. After 6 month it become RM1.20. Then if i sell now mean i earn 20cents per unit. How bout the charges then if i sell it and withdraw it as cash? 5% - 7% bank charges?

question bac to you, the RM 1.20 is their selling price or buying price?

nowadays, majority using forward pricing. they charge the 5-7% fee when you sell.
assuming its 6%
case 1 (buying price at RM1.20)
then you earn RM0.20 per unit - any other service charges

case 2 (selling price at RM1.20)
buying price = 1.2/1.06 = 1.132
therefore u earn RM0.132 per unit - any other charges


side note,
buying price - the price they buy from you = the price you sell back you units
selling price - they price they sell to you


side side note : do correct me if i'm wrong

This post has been edited by ante5k: Nov 26 2006, 10:08 PM

Yes, there are selling price and buying price, as well as NAV (net asset value). Selling price is the price you buy unit from banks. Buying price is the price you sell the unit to the banks. NAV is the real asset value of the funds. 5-7% service charge is transparent to investors, as this is the difference between buying price and selling price. Normally, buying price is same as NAV, but some of the funds may have repurchase charge, which means, you will be charged when you sell the unit back to banks. In this case, you will see the buying price is lower than the NAV, and the difference is the charge. Please read the info of the funds. Different funds may have different kind of charges.

~~5ive~~, it works like this. When you buy the UT for RM1 per unit, that's the selling price (RM1). The buying price will be lower by 5-7%, which is the value of your UT when you sell it.

If the initial charge is 5%, that means the buying price is RM0.95. If you buy it and sell it at the same day, you will suffer 5% loss.

NORMALLY, the finance institutions charge for the initial service charge and annual management fee (lesss than 1.5% of Net Asset Value[NAV]). There wont be any charges when you SELL. (* Depends on different finance institution policy.)

This post has been edited by shih: Nov 26 2006, 11:40 PM

Ur case 2 is juz an example right? since the buying price may be 5-7%.
Ya, i understand all this. Well i juz dun understand the other charges like bank charges or service charges is around how much?

They do not charge you when you sell. Its just that you sell at NAV while you buy at Selling Price. That alone is a hindrance for you to make a quick buck on Unit Trust.

This is a long term game and as I see it, its ideal for EPF funds if you are looking for something more than the pathetic 4.5% that EPF is giving. But judging by the boom, I suppose EPF may give us 6% this year but all said, Trust funds provide way more than 6%.

If you have money to spare, its best to move it into blue chip counters where you can get dividend income and capital appreciation. Moreover with their stable prices, you can liquidate your positions easily for cash without losing much in commission.

If you buy it and sell it at the same day, you will suffer 5% loss.

Most of the funds have cooling-off period, around 7 days. If you buy and sell within this period, you will not be charged.

Not all the funds do not charge you when you sell. In my case, you can refer to OSK UOB KLCI Tracker Fund. The selling price, buying price and NAV are all different. So, the charge is depending on the funds. Different funds have different charges. It's not neccessary you must sell your unit at NAV price.