The long term graph will show the economic in country is UP TREND regardless we are still exist or not. If we are not exist, then those money will be your next of kins.

If FD continues to be 4-5% in next 5-10 years, I don't think it will beat the other good investment tool including the EPF which at about 5-6% for the last 10 years. (The highest point for EPF rate is in 1983, 1984, 1985 & 1986 for 8.50%, after wards it keep down trend)

See the records for the past years. The EPF running simple average rates is at 5.91%, FD is 4.34%. For the current economic climate, I don't think FD will go more than 6% since the OPR still not yet decide yet.

BN (Bank Negara) will decide on the OPR (Overnight Policies Rate) in this May 05, 2011 (tomorrow) to discuss if there is indeed to adjust the OPR.


Year EPF % BLR% Saving% FD% Inflation%
1980 8.00%
1981 8.00%
1982 8.00%
1983 8.50%
1984 8.50%
1985 8.50%
1986 8.50%
1987 8.00%
1988 8.00%
1989 8.00% 7.00%
1990 8.00% 7.00%
1991 8.00% 7.50%
1992 8.00% 9.00%
1993 8.00% 9.50%
1994 8.00% 8.25%
1995 7.50% 6.60%
1996 7.70% 8.50% 4.10% 7.26 3.50
1997 6.70% 9.25% 4.23% 9.33 2.70
1998 6.70% 12.27% 3.87% 5.74 5.30
1999 6.84% 8.00% 2.76% 3.95 2.80
2000 6.00% 6.75% 2.72% 4.24 2.80
2001 5.00% 6.75% 2.28% 4.00 1.60
2002 4.25% 6.50% 2.12% 4.00 1.40
2003 4.50% 6.50% 1.86% 3.70 1.80
2004 4.75% 6.00% 1.30% 3.70 1.20
2005 5.00% 6.00% 1.30% 3.70 1.50
2006 5.15% 6.00% 1.30% 3.80 3.20
2007 5.80% 6.75% 1.30% 3.70 3.60
2008 4.50% 6.75% 1.00% 3.47 2.20
2009 5.65% 6.50% 0.25% 2.10 5.43
2010 5.80% 6.05% 0.25% 2.47 0.65
2011 ? 1.67
2012 ?
Average 5.91% 7.43% 2.04% 4.34 2.58

May i know what is the meaning of DCA?

DCA - Dollar Cost Averaging.
DCA - Discipline, Consistent, Accumulation :-)

One of the best way of accumulating wealth, if not go for stock market.

You don't understand what I am trying to say.
UT, stock market, can result in loss even after 5 or even longer term.

Eg.
an index fund that tracking KLCI that you bought during 1993, KLCI was 1300, after 18 years, KLCI now is 1500, how many return you get? 1500-1300= 200/1300 = 15% over the 18 years, which even FD is beating this kind of return.
This is not yet counted the potential annual management fee of 1.5% over the 18 years period, which amounted 27% total on the fund NAV already.

While there are a number of UT that yield you loss even after 3-5 years or even longer period.

Economy is up trend, but this doesn't mean UT must be uptrend as well. There were listed company go burst during bad time, there are bond defaulting during recession time, which can sink a fund performance greatly.

Yes, stock market and UT can yield good return, there is no doubt, if choose the right one, right timing. But to say UT 100% must yield good return, this statement is not necessary a must.

I can tell you an investor who started off an Index Fund in 1993 until today earns a total return of more than 400%. Please do not simply do calculation and mislead people.

p/s: For more reference pls check here yourself and you will find out that I didn't pluck the figure out of thin air.

This post has been edited by l3g3nd1314: May 6 2011, 11:33 PM

This is not a real index fund.
Index fund purpose is to mimick exactly what index has moved.
A real index fund should not be outperform or underperform from the what index has shown too much.
KLCI was 1300 and now is 1500, this is a fact.




Read the above quote from your posted link
54% from 94 to 2011, this is a good return?
37% from 93 to 2011, 18 years, good return?
FD is beating this performance.

I had said before, I have no doubt there are good funds that can yield good return.
But to say UT must earn good profit over the long term, is not a right statement to start with. Although some funds are consistently deliver the good, nobody dare to say it is a must even fund managers themselves.

My intention is that do not spread the statement or word, good return is 100% or a must in UT
and mainly refer to this statement only.



Seem like people are not understanding.
I never said UT cannot earn you good money.
I just said UT is not 100% must earn you good money even over the long term even economy is trending up nor I said FD is better than which UT either.

---

Added on May 7, 2011, 12:16 amI had no doubt about Public equity performance in general, but on other hand there are pocket of poor performance as well.
They are not new fund, but has been running for 4-5 years

I no mean to discourage or encourage people to invest in UT.
I know how UT can earn good money, I made decent gain in UT as well, but putting a right mindset and expectation on investment is very important as well.

This post has been edited by cherroy: May 7 2011, 12:27 AM

Yes, I agree with you on the expectation on the Investment. Every investment is having a risk. Even when you invest in Gold, Palm Oil Scheme, Stock, Properties or even your children and etcs.

Those below funds are really not performing good, that is a fact and never denied. However in generally, the FD in long term is expose to higher risk compare to the other investment tools when inflation continues to rise.

Of course the investor must made a right decision to invest in a right fund. It also depends on the investor's risk profile whether if they are aggressive, moderate or conservative. It has many factors for the investor for making decision.

PUBLIC GLOBAL SELECT FUND : Total Returns from 18-Oct-06 To 05-May-11=-07.02%
PUBLIC FAR-EAST PROPERTY & RESORTS FUND : Total Returns from 30-Jul-07 To 04-May-11=-00.21%
PB CHINA PACIFIC EQUITY FUND : Total Returns from 12-Nov-07 To 05-May-11=-25.64%
PB EURO PACIFIC EQUITY FUND : Total Returns from 28-Jun-07 To 04-May-11=-10.10%

I never say investment in UT is guarantee return. There is no guarantee in this world for any investment tools. It is up to our choice, timing, market conditions, investment objective, investor's financial capability and etcs. DO NOT put eggs in one basket. Diversification is important.

UT investment just an additional investment tools for investor who like to seek potential higher return in Middle to Long Term beside FD. UT Advisors must give a right information to prospects before their prospects make the investment decisions.

Investing in Stocks is definitely more popular than investing in unit trusts. Went for a talk today about investing in unit trusts. There were so few people.

This post has been edited by simplesmile: May 7 2011, 04:03 PM

unit trusts move so slow. because of that, could be alternative for a somewhat less volatile fluc for your money. a bit safer less riskier way. but since takes long time, that's the reason why not much into it.

if consider buy UT why not consider closed end fund such as icap?

low entry fee than UT

http://www.icapital.biz/english/

Hi guys, need some advice. Currently the prulink equity fund is @ 3.209 and I have some units there. Lets say I sell of 1000 of these units and get back RM 3209, then say few years later *touch wood* the price of the fund drops to 1.8, then I use back that money that I gained when I sold to buy the units (RM 3209 / 1.8 = 1782 units) and then say if it goes back up to 3.209 at one point, sell it off again and repeat the process. This would mean that I've made a profit right?

Second question: If say I have 2000 units of prulink equity fund, if i withdraw 500 units vs 1000 units, is there any difference other than the amount that i'll be getting (which is 500 x 3.209 = RM 1604.5 VS 1000 x 3.209 = RM 3209)? Means I only stand to lose if I withdraw more and IF the price goes up (i would stand to earn more if i withdraw money THEN when the price is higher rather than now). So I don't actually lose anything by withdrawing more money now since the price is high, I only earn less should the price go up further, am I right on this?

Appreciate your advice on this guys. Thanks

@CyberKewl the answer to your both your question is yes.

Whenever you buy something and sell at a price higher than your buy price that is profit. When you have some accumulation then you sold some of it when the price increased then you have profit. If you sold more shares that time then bigger profit compared to selling lesser amount of shares.

However you're right that when price go up further, of course your remaining shares (assuming they lesser now than your previous number of shares since you sold off) will have lesser profit. However if held on long enough and price goes up more, there'd be a time when the value may equal or even exceed your previous profits (which consisted of more shares before).

I'm not sure of your investing behavior, but when I read those scenarios, some people when they see that their target price is reached, they would sell some to realize the profit, then preserve the others for long hold. Of course when price is high, there would be impending correction, and when the dip comes, they just reinvest the profit to buy back the dip. Then repeat. In that way they earn abit by taking advantage in every run-up, while their longterm hold stays for maximum gain in time.

Btw, this assumes that the trend keeps going up, and the dips don't really go much below the previous dips.

jtdc, thanks for the explanation. I have a better and clearer understanding now

hi.....i'm kinda stuck with this FD thing these few days while i'm think about it...i got a small amount(around 8-10k) in maybank FD for almost 10years+, i checked each 1or2 years, the growth is very slow and getting slower compare to first 5years, can advice what can i do with this small amount, at least better than this FD? looking for long term investment.

Guys, i dont understand @@

Why the RM 1000 will gone if he didnt regularly do add. investment?

Suppose that i bought 1000 unit small cap fund... then i didnt do any transaction for one year.. after one year, i will still have 1000 unit small cap fund right?? no matter how is the fund performing.. right???

This post has been edited by Ren Mihashi: May 11 2011, 09:27 PM

You may consider to select few good performing funds. With your fund of RM8 to RM10K capacity, you may consider to choose 2 to 3 good performing funds to diversify your investment.

It is ill advised.

When you bought 1000 unit, it remains 1000 unit.

Just fund is charging 1.5% management fee on the fund NAV annually, but your 1000 unit remain 1000 unit.
This has nothing to do with top up or not.
There is no requirement or must to top up.
Also there is no such thing of sure earning money in UT nor it must be sure better than FD, nor it must be recover or not if market failed etc.

DCA is better than no planned method OR entry & exit rules. However, i do beg to differ - value averaging provides a better method in terms of risk management ($ at risk) vs. the returns (risk/reward ratio). Of course there will be Qs like "If the stock / fund drops so much, how can i cough up that much to value average ar?" - please google "TwinVest".

It's a similar discipline to DCA but ALLOCATING, not BUYING a specific amount of $ per period. Then based on the price / NAV, spend buy more or less.

Reasoning behind it is:
When markets are high, risk less (higher probability of heavier fall, lower probability of going higher due to "return to mean" / std deviation).
When markets are low, risk more (less probability of heavier fall, higher probability of going higher due to "return to mean" / std deviation)

value averaging works better than DCA if:

1. if got the time to really monitor the market performance and calculate how much to invest per investment, for eg per month
2. if you got loads of $$ to top up the difference compared previous month