What is not true? And how is a simple statement on compounding returns not true?

No doubt, the nav price will may be moving up and down daily, but if its net weekly growth maybe positive. It maybe negative growth for this week, and it could be net positive by the end of the month. It maybe negative for the month, and still be net positive for the year...

So say, the profit is trimed this month, and the fund's performance continues to grow next month... there is no compounded growth since the 'profit', that was already taken out, did not 'grow'.

Initially, the difference may not be significant , but compounded it 50 or 100 times over... Don't you remember what you qouted a few pages back on an example on what compounding can do on a smaller sum of invested money? (The smaller sum invested due to service charges.)

BTW. Why just trim profit? If you think the market will be bad in near future, might as well take all out. Just trimming the weekly or monthly or yearly profit of several percent is not going to help mitigate the negative growth on the remaining 100%.

By your thoughts of "skim profit and pump back when it is low", this shows that you have yet to begin any regular UT investments. Still a student depending on monthly allowance from parents?

This post has been edited by j.passing.by: Feb 14 2017, 10:46 AM

The difference is that you could start a fund with RM100 instead of the usual 1k. Then, in a DCA regular investment, it is more 'average' and not too lopsided if the monthly amount is very small, say RM100.

This lopside skew to lower returns would happened if there is an immediate drop after you put in the initial 1000. Then the monthly RM100 fresh purchases will be hard to catch up and skew the returns to a higher effective rate of return.

You will be like, after 3-5 months, thinking: damp this fund no good as it is barely breaking even... if only if I had put it into FD...

And if it happens to be a sharp growth after you dump in the 1k, you would be like very pleased with yourself... thinking why so stingy when I should pump in more!



Your initial plan - 1k, followed by 150-200 every month, is good. Take one fund at a time. You don't have to immediately start off with several funds.

The time to consider to have another fund or a few more funds to 'diversify' the investment is when you have reach about half of your targeted sum of money you want to have.*

Anyway, always keep in mind the objective of the investment. Know what you want to do, make a plan, and stick to the plan.

Repeat: Know what you want to do, make a plan, and stick to the plan.

Don't be like don't know what to do next in the middle of your investment plan, and asking what to do: trim profit or switch to another fund... or whatever that freak you out and cause you to panic...

It is a given fact that equity fund can be volatile, and will be volatile and is expected to be volatile. So no reasons to make any changes to the plan once you started it.

Stick to the plan!

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

* This about half of the targeted total amount of money to have is based on my own opinion. Not based on any stats or numbers or articles read. If you are more conservative and not willing to ride 100% on one fund, then 'diversify' earlier.

Try not to 'diversify' too early, especially when the amount of money invested is relatively small to whatever asset you have outside of UT fund.

Take the risk - and more risk - when you are still young and have the time to do so.

I don't know both funds... and just by basing the choice on their names.

I'll pick the Asia fund... cause Global tech sounds heavy on USA and tech companies... and all the indices, Dow, S&P, Russell 2000 and Nasdac are at record high at the moment. Apple stock is at all time record high.

If still undecided and don't trust my 'analitycal' pick, then flip a coin.

If the investment period is long enough, there may not be much difference between them in the long run... maybe 10-20% difference - which is sap sap sui when the total returns is 300% or more.

Like I would be very, very upset to get only 290% ROI instead of 310%...

==========

"very, very" - 2017's popular phrase.

Please la, don't write like you are sharing anything when you are just repeating your own perception and opinions of things you read from discussions in forums.

"School of thoughts"... walao eh, so well established and defined, so academic!

Already talk kok too much in a previous post, calling out Ramjade's "school of thoughts".

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

Ramjade,
Talk kok, sing song, chat, call it whatever you what, fine with me - as long as others know what it is.

Just don't say it is "school of thoughts" to impress people that what you wrote is well thought out.

"Monitor the market like a hawk." Really?

"If you want proof I can provide proof who use method 1, 2, 3"

Why do I want proof? Talk kok also needs proof ah? Go troll on your own time.

yup, they are entertaining kopitiam posts.

Keep on defending... no travel cost involved lar, since going to Sing anyway. That's what folks used to say: "Did not fall down, just bending down to pick some sand.

It is a 0.05% per quarter fee and it is calculated daily. Can earn back in 2-3 days as a bond fund could easily have a daily increment of 0.02%.

Also the platform fee was implemented as they took away the service charge of about 1%... it was a cost reduction, and it is appropriate for those investors with very, very short term objectives.

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

Kiasu mentality

Kiasu literally means 'scared to lose'. But it actually means scared to lose to another party.

A kiasu person will have difficulties in forming partnerships or joint-ventures unless he has the lion share, as he is more concerned about the benefits the other party would gained rather than the benefits he could gained in the business partnership or in any other business transactions.

He is more worried of being taken advantage of by the other party even though the business transaction is beneficial to both parties.

The kiasu person would rather bypass the net benefits he would get and not let the other party gain anything if he perceives that the other party is gaining it at his expense.

LOL. Now you are trying to pretend you learned nothing after lepak so long in this forum...

You were the one who give advices to newbies that you learned a lot from forums and don't have to read books...

So what is it? You still newbie or a OKU moron with learning disability?

I think you better stick to those fix-price funds with zero anything fees.

===========

BTW to the other students and yet-to-join-the-rat-race in this forum, why PRS ???

ok, noted.

Still trying to be witty and smart... already said non-working students (which means without income) - tax relief... so smart la.

Oh, now posting and asking on behalf of other investors with long term, is it? You can answer your own question or go on trolling at your own time.

Cannot wor... takes a few days to transfer, will lose the daily gains.

U see, i monitor the funds very close, must mirco-manage and transfer at the right time.

Well, always read the fine lines - get all the details first before signing anything.

Another way to reduce income tax is by reducing the income. LOL.

Serious, you can reduce the income by structuring your pay, such that your employer is paying higher than the normal 12% EPF contribution. Employer's contribution into EPF is non-income and not taxable.

So, if you manage to join a company with higher than normal EPF contributions, you are way ahead of your peers when you reach retirement age. Don't have to worry too much about long term retirement savings. With what you have at hand, you can take more risk... bond and mm funds should be what they are for a youngster - temporary parking.

Cheers.

PS. Get to know what is VA (Value averaging) investment... and use it for short term objectives.

I'm afraid it was my own spiel. If it was a copy & paste job, I would give the link to that webpage.

I don't think Feng said anything about any guarantees. The 'instant return' was from the tax relief - which could be about 20%, more or less, depending on your tax bracket.

He was just pointing out that if there is still 20-30 years before reaching 55 to withdraw without any penalties... then the upfront benefit will be amortised down to less than 1% per year.

His query was: Given the poor choice of limited PRS funds to invest, is it worthwhile to go PRS instead of a normal UT fund for such a long term investment?

Well, if one is already having some UT funds, maybe choose the PRS fund that piggy-back feeding into the UT fund you already have.

If the tax relief is not high, then maybe it is not worthwhile to have 2 separate accounts on the same fund...

Anyway, I would still advocates VA or DCA... regular purchases, instead of plugging in 3k just before the Dec 31st deadline when the markets are on Xmas rally.

future's so bright i gotta wear shade

All markets jumped high today... those not in equities, so lugi lor.

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

Btw the above phrase comes from a song... about a grim future of nuclear holocaust, but young students in the 80's took it as their anthem - a bright future after graduation.

The Fed raised its benchmark lending rate a quarter point and continued to project two more increases this year. U.S. equities extended gains as Chair Janet Yellen said in a press conference that the “simple message is the economy is doing well.”

The simple message is: The economy is doing well.

https://www.bloomberg.com/news/articles/201...ls-markets-wrap

future's so bright i gotta wear shade

To those who likes to do "trading" on their UT funds... this hedge fund says it is a sound strategy and lots to gain than buy-and-hold as "predicting volatility (in the) long term is completely random".

“We trade with a one-day horizon as predicting volatility long term is completely random,” Rune Madsen, founder and portfolio manager of the $17 million fund, said in an interview on Monday.

https://www.bloomberg.com/news/articles/201...orrow-literally

Go in, go out... every fortnight 1 or 2 percent gain... by the end of the year...

Why not? What has trading got to do with "lag time".

Don't you know anything about free switchings with zero switching fees?

Go in... go out... take profti now... top up this month, skim profit next... all part of doing timing and trading... isn't it what most of the discussions here about?

Forward pricing... ask also no point, today's transaction deadline already over.

==========

To make fast money, must speculate and make some predictions... how will the market be tomorrow, will it go up or down next week... then switch in or out accordingly.

May the odds be ever in your favour.

One thing for sure... bet small, win small; bet big, win big. No guts, no glory!



-----------------------

future's so bright i gotta wear shade

This post has been edited by j.passing.by: Mar 17 2017, 04:43 PM

Please allow me to give a different perspective why you should have bought and added more. (I know the deadline is over... so I'm not 'agent' selling you anything. )

1. If this is a core fund, which I think it is to some of us, it can, and should be more than 10%. Maybe up to 20%. Unless you have a bond/equity ratio which is high on the bond side, like 50:50, then the core equity ratio is less than 10%.

If it is a core fund and it is closing soon, it would be appropriate to buy more than the usual amount and overweight it. It may be more and higher than the desired percentage you like it to be, but this higher percentage is only in the current situation. In the latter months, when the portfolio is enlarged by topping other funds, its percentage and weightage will be reduced back to the desired weightage..

2. If anyone is not retired and earning a salary and has excess income flowing in every month, then he/she should be a regular investor buying in regularly. If the fund is among the regular purchases, there is no reason not to bring forward its scheduled purchase when there is a notice that the fund will be closed soon.

Similarly, it is reasonable to bring forward the sccheduled date if there is a slight dip in the market, since the money is available and reserved for it. For example, if the purchase schedule is usually mid of the month, and there is a continuous 3-4 days drop in the 1st week of the month, it could be ideal to take advantage of the oppprtunity and purchase earlier than scheduled.

Unless of course, the money is yet to be available and salary not in yet. I would not take a loan or make a cash withdrawall out of a credit card to invest, as was mentioned by someone.

3. A fund closing is due to its size. The amount maybe deemed, by the fund manager, as the optimal investment size, giving the best operational returns. It could also deter and lower down those 'tradings' by those investors who love to trade - previously, they can sell & then buy back as frequently as they want; after closing, they can also sell but cannot buy back.

While normal selling and buying would contra each other, these 'tradings' can be in one direction. The fund manager may have to reserved a higher cash flow to cater to 'tradings'. A higher amount in cash, means a lower investment amount... meaning a lower possible return.

Anyway, whether trading or normal selling/buying, a closed fund will be more stable. If it was a good fund previously, it will be a better fund.

(Those who missed the closing deadline, so lugi lor. LOL. )

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

Now, I give my 2 sens - to other readers - why you don't bother to top up.

"Because the fund been doing well, so even if I rebalance I should be selling instead of buying the fund... IRR 17.24%; ROI 39.38%"

1. She has more or less reached her desired portfolio investment amount. Any future top-ups or investment is tiny or insignificant when compare to her current invested amount.

2. She is actually 'trading' more than she thinks she is. If the fund is good, as shown by her gains, why even think of selling?

If the thinking is to maintain the profit, and then seeking another opportunity and time to invest the money into the same fund or another fund is 'trading'... as 'trading' is the action to continuously seek growth; this is oppose to 'buy-and-hold' investor who flows with the dips and swells of the fund.

3. IRR is 17.24%, should you top up or not? Yes; unless of course you have reached your invested objective as mentioned in (1).

If you are thinking not to because the top-up could lower the IRR, then you have the wrong reason not to top-up becuase you have a different perspective than I do.

(No doubt further investments or top-ups at the market peak will often lower the IRR, because the market will more likely to decline or flatten out after the peak, and will take a longer time to give the same returns as previous investments/purchases/top-ups... IRR is a measurement of profits over time, same % gains over a longer time = average down the IRR.)

But we should also view each top-ups, each new purchases as a new investment on its own.

So if the previous batch of investments/purchases was giving a 17.24% IRR, then it is good and fine. (Actually 17.24% is better than fine, it is an excellent and fantastic IRR to have.) Period. Full stop.

Don't link it to the new batch of money/investment that we are now having in our hands and are about to decide where to invest it.

So now the market is at the peak, and maybe the returns of the current top-up will not be so fantastic as the previous batch of investments, is it better to allow the money to languish in 'cash' instead of seizing the moment and the last opportunity to top-up before the fund closes?

I dont' think so. Unless of course there is another better fund which I could put the money into next week.

-------------------------------------------

future's so bright i gotta wear shades.

This post has been edited by j.passing.by: Apr 2 2017, 03:07 PM

Bloomberg: Malaysian Small Caps Are Too Hot to Handle for Top Manager

24/04/2017 https://www.bloomberg.com/news/articles/201...for-top-manager

It is getting even hotter and hotter... 0.9% on Tuesday, 1.3% yesterday.

Market movement cause by new money hopping onto the bandwagon? New money chasing a certain small-caps fund before it closes?

How about all you "traders"? Time to get out or get in, topup or trim profits? Or better to wait a few more days?

But wait what? Will itl go down or go further up?

Remember: it is the last mile that makes the difference between the champion and the runner-up. The final 2-3 percent that will boost a dismal returns of 4% to 7%, a so-so return of 8% to a even better return of 11%, or boost an excellent gain of 18% to a even higher & fantastic gain of 21%.

This final 2-3% do make a lot of difference in the annual returns - in your bragging rants.

So how? Get in, get out or what?

Well, one can just bugger it too... since the extra 2-3% is not that great in the long run - a 138% is not much different than a 141% ROI - both will be rounded to 140% when you brag about the ROI you got.

Maybe bugger all these market news as well.... and just go with those balanced or flexible funds - and let the fund manager, the professional time the market.

(Look into MorningStar Malaysia for the balanced or flexible funds category and shortlist those funds with 4 or 5 stars.)

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

future's so bright i gotta wear shades

If everyone buys through FSM, it would only be one investor or one account; since the fund company don't give you an individual account as FSM is the actual buyer.

This is what a 'nominee' account is about. This is the reason behind the low service charge that FSM can provide to you.

Unless you bought via the EPF scheme, your account is a nominee account, not a direct account registered with the fund company.

As pointed by others, are you using NAV to refer to 'total asset value' or referring it to the fund price or NAV price which is NAV/unit?

A huge injection of fresh money into a fund might not affect it as much as we think it would be.

1. At the end of the day, the daily fund price is calculated. And the new investor is sold the x amount of units based on the NAV price per unit.

2. The next day, the fund is having more cash than usual. And the equity portion of the fund may have reduced, and would maybe contribute less growth to the fund than yesterday. But if the overall market is down for the day, the fresh injection may also reduce a possible loss since the equity portion is lower.

3. How the fresh injection may affect the fund overall would depends on the action of the fund manager in the coming days, just like how we, individual investors, affect our own portfolio of funds by trimming and topping up our portfolio of mutual funds.

4. Not to forget that Bursa Malaysia is not a handful of listed companies (unlike the Laos stock market), and some investment houses defined small-cap stocks that they can invest into as stocks with market capitalization of not less than RM500 million.

Hence the huge injection of fresh money into the fund may be huge for the fund, but it is just a tiny fraction of less than 1% in its targeted stock(s) that the fund manager had set his/her eyes on.

This post has been edited by j.passing.by: Jul 13 2017, 12:51 PM

Huge injection or withdrawal - they are similar situations; won't affect significantly the fund or rather its NAV price overall.

How big the whale are we talking?

Big enough to cause the fund to reach its limits and closes it to further fresh investments? Or big enough to cause it to close as in 'gulung tikar' and close shop since the size of the fund will fail to give adequate management fees to keep it running?

One direct impact that is noticeable due to the fund's size is the management fee; which is usually based on a minimal threshold in value terms, and it is usually capped to a fixed percentage when it is above a certain level. When the fund size is too small, the fixed minimal amount of management fee trimmed would be too heavy to give adequate returns to the unit holders.