When to take profit?

When to enter?

Perennial questions that bother UTF investors.

Rather than worry about it and remain clueless and continue to worry because you have no plan.

Rather, have a plan and remain wise and composed and hence less worry!

Try this method:

Let's say you have RM 100K to invest and you have determined to be a moderate risk taker (assuming you have done the risk profile questionnaire that is available from most UT Companies).

So you have decided to split 50% Libra Asnita Bond, 25% Kenanga Growth Fund and 25% Manulife US Equity Fund.

That will be:

Asnita = RM 50K
KGF    = RM 25K
US      = RM 25K

One year later:

Your portfolio looks something like this

Asnita =  RM 52,500.00 (gain 5%)
KGF    =  RM 22,500.00 (loss 10%)
US      =  RM 28,750.00 (gain 15%)
              =======
Portfolio= RM 103,750.00 (gain of 3.75%)

When you rebalance you will try to make them back to the same % that is:

Rebalanced:

Asnita =  RM 51,875.00 (50%)
KGF    =  RM 25,937.50 (25%)
US      =  RM 25,937.50 (25%)
                  ======
Portfolio =RM 103,750.00
From this you will realized that you are selling US Fund & a little of the Asnita Bond (or taking profit) and putting them into KGF (topping up) because KGF has seen a sell down.

In this way, a savvy investor have a system that will prompt them to sell or top up the funds in a systematic way.

This method is called "asset allocation model" method. It is scientific, it is unemotional, it can take away your fear and greed. You do not have to rely on external noises anymore!

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