Here are some brief pointers to think about:

1. I would get out of an investment if there is possibility that the investment will fail. I would also diversify and spread the invested money into different financial tools if I am not sure which financial tool gives the better returns.

But if I knew that financial tool A is the best tool and I am satisfy in having only this financial tool, it is plain silly to diversify just for the sake of diversifying and having several financial tools.

2. EPF can be regarded as a unit trust company. It is the biggest and with nearly 700 billion in assets and investments. If it can fail, so can other smaller fund companies. And other financial institutions such as banks won’t be safe too. Then, the only safe place to put your money would be under your bed.

3. Both bond and equity funds don’t have any guarantee that its performance is the same every year. Bond funds too can have negative growth just like equity funds. Past years performance are history, it can be used to project and extrapolate the performance in the next few years but it is indication, not a guarantee the extrapolation will be true.

4. Don’t look at the dividends or distributions of any fund without noting its total returns for the year. The total return is more important. A fund may distribute more than its annual growth. Say, it started at 104%, and in a year’s time, gained 4%... the income distribution can be 6%, and its net asset value after distribution is 102%.

5. BTW if the fund is under EPF, the distribution option is re-invested.

6. As said in the previous reply, stick to the original investment strategy. If the plan was good (which is to complement EPF’s investment and diversify some money into a non-local fund ie. Greater China or Asia Pacific), and the selected fund was chosen carefully… when the market had deteriorated, it is not reasonable to abandon the fund and buy something else.

7. When the market had deteriorated, it is the right time to investment even more… since the investment is not for the next week or month, but years in the future. (Aside from DCA, there is VA. Google it.)

8. If there was an intention to have a certain invested amount and allocation in region A, region B, etc… don’t let “current market condition” or “market noise” determines the purchases. If you got cold feet at the ‘unfavourable’ region and jumps to the ‘favourable’ region currently giving positive growth, you are doing it wrong.

9. EPF dividend is as good as any bond funds, and without any added risk. If you think you have enough money in equity funds, an alternate option is do nothing and don’t withdraw out of EPF for bond funds. No point in taking more risk without having any higher potential returns.

10. It is possible to park temporary the withdrawn money in a bond or money-market fund, and later switch to an equity fund. Usually the funds must be within the same fund company. Try to seek and confirm the details.

(See also yesterday's replies in previous page.)

Hi,

Thanks for the points above.

1. If u know fund A & B where performance is about the same, would u put in single fund only or both?

2. Refer to your point no 4, yes i agree this for variable price UT. but if this refers to AHB (fix price UT) i think the solely performance is refers to dividend.

3. When market go down, i think its not advisable also to go for more investment without seeing first where it go. Otherwise, we may go to early n finish the capital while market going down for more.

4. If bond and equity under same fund house its possible. But i just use recommended fund for this purpose so its quite hard to have equity n bond under same fund house.

does AHB means AFFIN HWANG BOND FUND?
this fund is fix price ut.....

1. 50/50. Or toss a coin. If from different fund companies, stick to your preferred fund company.

2. Fixed-price fund is as good as, if not better than, bond fund. Yes, they are 'dividend' and represent its annual growth.

3. Not if you define DCA as spreading the purchases through out the entire investement duration. Don't mistake lump sum investment when splitted several times as DCA.

4. Both the funds switched to and switched from must be EPF approved funds under the EPF-UT scheme. If cannot park temporary, then withdraw every 3 months... also it is not a must to withdraw the max allowable amount if it is not necessary to do so.


This post has been edited by j.passing.by: Jun 22 2018, 05:33 PM

- Google 'managed portfolios' or check the FSM website.

- It is the minimal amount to start a fund. RM1000 to start a UT fund, RM10,000 to start a managed port, RM100 for RSP.

================

Regarding "opportunity cost"....

Opportunity cost existed when there are more than one chose to select. Let’s say there are 2 different machines to choose… they have different prices, different speed and performance, different maintenance cost, etc. If we choose on the prices and cost of maintenance to keep the overall cost low, and forego the machine with the higher speed, we could be forgoing the opportunity cost of productivity and may be missing some extra sales when there are higher orders in near future.

When there is only one chose or option, there is no opportunity cost to speak of. It is redundant and a waste of time to say we should have done this or done that or taken another option instead.

For example, if someone does not know or heard of UT funds, and kept his money in FD. There is no opportunity cost in not investing money (or in other words, un-invested funds) in UT funds.

If that person was presented with options to put his money into FD or UT funds, only then there is opportunity cost in making the decision to select which option.

Now, let’s move back to the previous post on not wait and wait for the right time to invest, but instead invest as soon as possible when there is spare money to invest, and not let the savings to accumulate too much.

If you already knew about UT funds (and been hanging out in this thread for sometime) and lucky enough to know about UT funds before there too much “un-invested” money sitting around and have already practiced ‘work – earned – savings – invest’ regularly, there is either no opportunity cost or lesser opportunity cost of “un-invested funds”.

If UT funds was never an option, either because you never heard of it or you now suddenly inherited a large sum of money or you had just withdrawn a large sum of money out of EPF at age 50, 55 or 60… there is NO opportunity cost to speak of in the “un-invested fund” if you now decided to spread out the purchases and slowly invest it bit by bit.

Spreading out the purchases over a long period of time would miss out ‘compounding growth’ in a market uptrend. If you are a new investor and a bit nervous on handling a big sum of money, spreading out and invest it bit by bit will take away any stress and nervousness in the investment and continuing the investment.

How much to invest at each purchase? It is up to each individual and how comfortable he is with the sum of money to invest each time. (Some are more kiasi, some are more kiasu... )

I would suggest not to follow your heart and emotion, but to use a bit of maths and common sense.

Let’s say you somehow realized you have or inherited a large sum of money, and now have 60k in your hands. You wish to keep and invest it into UT funds for 5 years before touching it.

Total amount to achieve: 60,000
Investment duration: 60 months
Investment budget each month: 1,000.

Instead of letting the 60k to gather dust while you DCA the purchases, you could put it into a money-market fund and switch out 1k into the selected UT fund each month.

For this short duration of 5 years and the targeted amount to achieve is also known, you could use VA strategy instead of DCA.

Note: Whether you readily have the whole 60k at hand or the investment budget is out of your monthly salary, the above DCA/VA investment strategy works the same.

========

PS. If you have just joined the work force, investing into UT would be easy if you don’t let the un-invested money accumulate too much. It is a bit more headache for those middle age guys with accumulated savings and un-invested money.

Are they really running out of time to slowly invest? Or are they feeling pressured to invest the entire large sum of un-invested money as soon as possible?

Fund agent: “Don’t know what to do? Come, come, let me show you managed portfolio.”

Where does any source tells you the exactly that you must spread out weekly to do DCA or for that matter monthly to reduce the chances of us buying at the peak. DCA just tells us to spread our investments, no? Ofc the more spread out the purcahse of UT the better but investors have to weigh practicality vs the benefits of DCA. Another thing is that if the period is too short, the price differences may not be significant enough.

https://www.investopedia.com/terms/d/dollarcostaveraging.asp

It also doesn't mean DCA must be RSP.

This post has been edited by ChessRook: Jun 23 2018, 12:10 AM

One thing our epf is really Malaysia boleh. it is one of the best balanced funds in the world with low volatility (guaranteed min 2.5%). Why would you want to go for AHB? One reason EPF is able to do so well, is because it owns certain favourable assets eg Plus highway and is well managed.

Dont worry about EPF, our Finance minister has revealed all the big corrupt cases. Is there any bad news on epf?

This post has been edited by ChessRook: Jun 23 2018, 12:17 AM

I disagree with the article on lump sum approach. The benefit of DCA is when there is a downward trend or when there is high volatility. One reduce the risk of buying at the peak. One good example is now. Imagine if i had the lump sum and bought UT in early feb when the price is at its peak. I would be very sad 😭.

Best is to split and spread the lump sum and buy periodically. One can still put it in money market funds and earn that 3.45% while DCA away at investing at UT.

Exactly my thoughts too

3. ya but by using epf, the best DCA can achieve is 4x a year. need to play around with this limitation.


i siphoned out not due to the recent drop - as u said, only small portion can be siphoned out. i did this since 2 yrs back into equity funds. the question i asked initially is due to the time for me to be able to siphoned out again from epf is coming, but with current market situation, im asking any better place to siphoned out - as putting it into equity now will make it worse than keeping in epf itself.

no. its Amanah Hartanah Bumiputera.

yeah but now not sure how boleh is boleh. things has change. i still think epf will be the best funds as it is but just want to reduce the exposure and looking for other alternative.

on separate note, i dont agree on the FM himself revealing the case to begin with. to much impact to the market. we have investigation body who should reveal it, not MOF. and he should focus to other things too. be yang dipertua SPRM if he so excited to reveal.

i think this best summarized it.....
"if the investor is primarily concerned with reducing short-term downside risk and the potential for regret, then DCA may be a better alternative."

"If an investor is uncomfortable with the risks associated with a given market entry strategy, it may imply a low willingness to take risk in general, and if so, we recommend revisiting the target asset allocation to ensure that it appropriately addresses risk tolerance levels and investing goals."

https://personal.vanguard.com/pdf/s315.pdf

This post has been edited by T231H: Jun 23 2018, 10:18 AM

When did I say 'MUST'?
Read the message thoroughly before start flaming dude.
We are all here to discuss, not to argue.

DCA means instead of investing in a lumpsum, try spread it out, that's it.
What is there to even argue about?

I see this see-saw up down volatility in the market and I attribute it to one person, namely the current sitting POTUS: Mr D. Trump.

Everytime he opens his mouth, the market reacts. And I am sure he knows that very well.

We all know that he is extremely rich.

Now, suppose he knows that very well, and suppose he purposely open his mouth, says so SH1T and the market goes down.

What is going to stop him from grabbing those oversold equities with his vast horde of cash?

Then later he goes and says something positive, the market reacts again.

What then, is going to stop him from selling those equities that he got cheap?

You see the trend? The morale hazard?

If you notice, he has a trend of saying some SH1T against China or NK, then make up with China and NK and the cycle repeats ad infinitum.

Is it just me, or anyone else notice a trend?

Xuzen


NB: If I am in his position, with the authority and cash at my disposal, why not do it? What is going to stop me from doing this? That is the question I am asking myself.

This post has been edited by xuzen: Jun 25 2018, 11:06 AM

I am agree with your point of view. the global market is not monopolized by him

noticed that too. but suprisingly the summit doesn't do anything to the market.
I suppose 2018 recession is him.

and see saw market is not good for DCA IMO. FD could easily beat the total return from 12 17 to 06 18.

er.. isn't this what DCA or VCA is for?
IF no up/down OR see saw market as U call it - might as well go all in, right?

felt similar with you.

If this guy keep doing this, the whole world will turn against him see what happen at europe, japan, india even its neighbour canada are reacting oppose to him recently.

is Trump doing this for his own wealth or saving bullets for his next coming US election.......

What we can do is see what will turn out the market be in 1 month.

Nevertheless, since market see saw is cause by nonsense mouth, actually the fundamental value of apac still remain healthy except if the trade war become reality and getting worse,
we should keep holding apac funds for now.

I will sell some of my emerging and us holding inversely, while keeping apac now for the moment.

This post has been edited by ehwee: Jun 25 2018, 06:10 PM

if normal see saw no problem DCA.

lately punya. crazy. up 2 down 1. down 3 up 1.

better stay in FI at the mean time. at least stable abit.

after market no so crazy only ok.

buy now $1
sell later $1
absolutely stable but good for investing?

when is good enough or not crazy enough up/down?
again, isnt that what programmatic OR no fear/ no greed DCA or VCA is for?

oh - wanna time market ka?
not process oriented but opportunistic? then it's called value investing, not DCA / VCA i think