1) I don't speculate/gamble except for less than 5% of my money.

<<I'd imagine you do the exact reverse when speculating in the short term, yes?>>

2) No. For my speculation/gamble, I try to buy when something is on-sale aka low price. I am not the kind of person that goes with the crowd.

Dreamer

have you ever tried catching a falling dagger then?

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Added on July 24, 2007, 3:18 pmsomebody mentioned about BLR(interest rates) as a means to control inflation.. not exactly the entire picture.

interest rates is a tool the govt use to "control the flow of money"...

This post has been edited by lwb: Jul 24 2007, 03:18 PM

May I know why is our M'sia economy sucks? Apart from the stock market, properties seem to be appreciating these few years. Offices in Klang Valley also well tenanted plus shopping centres emerging with many new shops. What kind of signs do you see that does not reflect the real situation?

sharesa,

1) Let me ask you a simple question. What makes you think that our economy should do well? Other than oil and gas industry, we are in a bad shape.

2) Our education system sucks. Our graduate cannot communicate in English. MNCs are moving out to lower cost countries. Meanwhile, we do not have qualified talent to move up the value chain. For example, Intel is investing heavily on a new factory in Vietnam.

3) Malaysia is NOT competitive versus neighboring countries either in cost or quality.

4) We are building up infrastructure (road, port, power generator) in India. India with good infrastructure will give Malaysia hell in near future.

5) Why Malaysian companies are investing outside of Malaysia?

A) We do not have the growth
B) We do not have the size
C) NEP -> Why share 30% of your profits?

<<properties seem to be appreciating these few years. >>

6) Who say so?? Housing price is either stagnant or dropping.

Dreamer

Dear Mr. Dreamer,

I posted this under the ETF thread... I hope to hear your insight on this plan i have posted below.. can you please comment?

-----------------------------------------------------------------------------
I would like your opinion on my investment strategy.

I intend to do DOLLAR COST AVERAGING for FBM30ETF.

I plan to buy 1 lot (100 unit) every monday. Therefore, about RM900 (current price) for the next 5 years.

So, i will be investing RM 900 x 52 weeks = RM46800/per year.

I am a fairly conservative trader.

What do u think of my idea?

Hi Mr Dreamer,

Just my point of view. I have read about Dollar Cost Averaging as well and have found out more from a friend of mine in the unit trust industry.

He told me that this method will only work if the following conditions exist:

1) Market is on the uptrend in the long term.
2) You continuously dump your money into the market over the long term irrespective of the market direction.

My friend honestly told me that it might not work because the market is not really on the uptrend over the long term. Also, even if there is any uptrend over the long term, it is due to factors such as inflation, economic growth and etc. So you are actually just riding on the economic growth. Your returns will be as steady as the economic growth, but you will never be able to earn substantial return. Is that correct, Mr Dreamer?

also consider remiser fee RM12 each time you do transaction. RM12 or 0.7% (0.42% through online), whichever is higher. for your RM900, following 0.7% rule, is just RM6.30. perhaps it is more wise to do transaction every RM1,800

KLCI is at historic high. may not be advise able to buy because most top stocks are at peak. when crash, it is most probably will take a long time to get back your initial investment.

Neo18,

1) It will not work. You are ONLY investing on ONE asset class.

2) This strategy works in USA when people are putting money into multiple asset classes via DCA. In fact, in USA, people use a mutual fund that invest on multiple funds/asset classes.

3) Most people including me do not have the discipline of balancing multiple asset classes. So, I use a balanced fund ( a fund that alway invest on 60% stock and 40% bond) to diversify and auto-balance.


Chronox,

1) The problem is limited to Malaysian UT industry now.

What market do you compare to??

2) If you invest in Malaysia stock market, Malaysia bond market, US stock market, US bond market and so on simultaneously, there are always market that do well and market that do badly. And, if you fixed your percentage of allocation and re-balance annually, you will always sell high and buy low. You make money.

<<Your returns will be as steady as the economic growth, but you will never be able to earn substantial return. >>

3) Substantial return can be substantial loss too. Your goal is to make money in the long run and all the time. So, the first goal is NOT to lose money in any situation.

4) You do know that this is how insurance companies internally invest your insurance money to pay back the claim.

Dreamer

@Dreamer,
He's asking about an investment technique totally unrelated to your rebalancing approach ler. I'm also interested like him to find out your thoughts about Dollar cost averaging approach to buying a single counter.

@Neo,
Dollar Cost averaging is a way to minimize your risk associated w/ making a single purchase for 1 counter. And AFAIK, it's not buying fixed amount of units as what you mentioned, but putting in fix amount of $ to buy what that fix amount can afford during that period.

"Dollar cost averaging has been widely criticized by economists and academic finance researchers as more of an marketing gimmick than a sound investment strategy (a way to gradually ease worried investors into a market, investing more over time than they might otherwise be willing to do all at once). Numerous studies of real market performance, models, and theoretical analysis of the strategy have shown that in addition to having the admitted lower overall returns, DCA does not even meaningfully reduce risk when compared to other strategies, even including a completely random investment strategy." Source: http://en.wikipedia.org/wiki/Dollar_cost_averaging

Here are my own thoughts to provide a balanced view of dollar cost averaging.

Standard way of approaching dollar cost averaging, you have fixed sum of x which you know you want to purchase on 1 single counter. Instead of plonking down 1 time purchase, you break up x into multiple n parts to be invested at fixed interims.

This approach will earn you money even if the counter price goes downtrend during your investment time horizon, but ends up at the same price as when you first bought it. In such a situation, 1 time purchase would not even earn you anything.

However, dollar cost avg approach will earn you less money if from your 1st purchase, the counter price goes up all the way and did not fall. But you will still earn money.

Hope you understand why this is so.

METALRAGE,

1) It is correct that what he describes is NOT DOLLAR COST AVERAGING. To DCA, you put same amount of money every time. It is NOT the same number of unit.

2) I will not do DCA on that single ETF or any single counter. I do not believe in putting all my eggs in one basket.

3) I believe putting money in a portfolio of ETF/mutual fund that invest on multiple asset classes. And, I will change my buying of ETF/Mutual fund depending on the ratio that I am trying to keep.

<<"Dollar cost averaging has been widely criticized by economists and academic finance researchers as more of an marketing gimmick than a sound investment strategy (a way to gradually ease worried investors into a market, investing more over time than they might otherwise be willing to do all at once). Numerous studies of real market performance, models, and theoretical analysis of the strategy have shown that in addition to having the admitted lower overall returns, DCA does not even meaningfully reduce risk when compared to other strategies, even including a completely random investment strategy." Source: http://en.wikipedia.org/wiki/Dollar_cost_averaging
>>

This is assuming that you have the lump sum of money to begin with. For people earning a salary, the money comes in every month. So, they are doing DCA as per their cash flow.

If you have a lump sum of money, you may DCA or invest in a lump sum. But, I tend to do DCA in 2 to 3 installment to spread out my risks. I am cautious.

Dreamer

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Added on August 1, 2007, 6:57 amAll,

I will not DCA to this ETF because

A) I have no confident that Malaysia economy will survive the next recession

B) In the long run, Malaysia's economy may not grow at all for the next 10 to 15 years.

If you want to argue with me, show me the facts that contradict with my thinking.

Dreamer




This post has been edited by dreamer101: Aug 1 2007, 06:57 AM

@Dreamer

If your prediction really accurate and Malaysia will fall in 5years time and never get back. Tell me what should I do now ,
a 18 year old college student who can save 4k per year into FD.

I believe he'll ask you to try and get into foreign universities. RM4k per year is NOT much.

Many people can save RM1k per month.

She's a college student so it is not bad to save RM4k per year? I dont know. Might as well tell her to concentrate on her studies instead of thinking of where to invest.

jianee89,

Improve English. Learn Mandarin. Get qualification and certification that is recognised oversea. You may have to get outside of Malaysia to look for job.

Dreamer

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Added on October 15, 2007, 1:57 amYou are correct.

Dreamer

This post has been edited by dreamer101: Oct 15 2007, 01:57 AM

Thanks Dreamer. I really appreciate your reply. I'm from a semi government Chinese school since standard 1 to form 5. English would not be a problem to me since my parents communicate with me in English. To get a qualification and certification that is recognised oversea , does that mean I have to study overseas ? My parents doesn't have much money for me to study abroad. The only way for me is , save up the money for overseas study for my Masters in International Business at University of Nottingham Malaysia. I'm taking external Law degree which is LLB Uni. of London.

Besides concentrate in studies , what other things should I do ?
Cos I'm planning to study part time and work for part time at my dad's office. My dad is a lawyer and he has a firm , is it a good idea for me to kick start and gain experience in my young age while the others are still hanging around with their latest gadget and lovely bf/gf?

P/s: I just wanna be more matured than the others in my age , and gain more experience so that I can have the negotiate power in the future.

i have to say, I m impressed! keep it up!!!!

Long time ago, parent keep telling the child to get an education. Part of the norm practice, the parents encourage the child to study until Degree level.
After working for years, I had heard that people with Master holder are getting slightly higher by few hundreds compare to Degree holder.
Would you recommend a person to study until Master education that would waste a minimum of 10k up to 100k depending on the type of master?

If your answer is Yes to study until Master education, then is it recommended to get a good and recognizable MBA? and Why.
Example of good and recognizable MBA are Manchester Uni, Victoria Uni, Norttingham Uni and etc.
Example of other Uni are local Uni.

Thanks

This post has been edited by arthurlwf: Oct 15 2007, 04:08 PM

err, if money is not a problem in the first place, then study or education is something that money can't buy nor can be evaluate by return rate.

Master degree or any graduate doesn't mean anything. A hawker or businessman that only finish secondary school can earn more than a Phd holder x times more, then should we tell our children don't need to study so much? No.

In working life, it is the capability and skill that matter most, not degree alone.

more formal education/degree/master = better employees
more unformal education/knowledge = better employer

If money is a problem, then does that mean its best not to study further? because there is no value in terms of return rate. Thus, poverty people ought not to further education.

I agree with your point that capability and skill is what matter most in working life. However does this applicable in interview session? I doubt so...