Posts Tagged ‘funds’
Fools rush in, or the early birds catches the worm?
Posted by: admin in General, Unit Trust on May 12th, 2009
To quote an article by IFast in Fundsupermart.com,
“However, we have recently seen a change in sentiment and increasing investor risk appetite, and this has benefited most equity funds and even higher-risk fixed income funds.”
There’s certainly a hint of optimism among the investors out there. Being a forward looking individual like myself, the storm will eventually subside as they always do. Unless you’re talking about the end of the world that is..
The Secrets of Investing in Unit Trust
Posted by: admin in Unit Trust on April 9th, 2009
There are 3 common strategies used in unit trust investment.
1. Dollar Cost Averaging
Regularly invest a fix amount in a unit trust fund regardless of market trend is called the Dollar Cost Averaging strategy. The actual market performance is fluctuating. When the equity market is high, you buy fewer units with the same amount. When the market is low, you buy more units. For long term, you will get much more unit in the lower price range.
2. Portfolio Re-balancing
Portfolio re-balancing is the process of bringing the different asset classes back into proper relationship following a significant change in one or more. More simply stated, it is returning your portfolio to the proper mix of stocks, bonds and cash when they no longer conform to your plan.
Example:
You start investing 50% in equity and 50% in fixed income fund.
1 year later, the equity rises and now your portfolio consists of 80% equity and 20% fixed income fund. To re-balance your portfolio, you should sell 30% of your total fund in equity and invest it in fixed income fund so that the portfolio is maintained. This is the simple principle of buying low, and selling high.
3. Switching
Switching will lock in the gain you made in your unit trust investment. When you are making profit from an equity fund, you can switch it to some lower risk fund to lock the gain instead of selling it for cash. When the market turns low, you can switch it back to equity fund.
I don’t believe in Unit Trust until I found this..
Posted by: admin in General, Unit Trust on February 17th, 2009
Performance of stocks from year 1925 to 2000
Some of the top reasons I’ve encountered by the people who don’t invest (or re-invest) is that it’s too risky, or it’s not a good time to buy in. There are another group of people who consistently see no “luck” in their investments, always losing the moment they go into that new fund/s.
These people usually have one thing in common - they usually see Unit Trust and its counterparts as a short term investment instrument.
Stretch it to a 10-years period or more and you’ll begin to see the opportunity right up there in the chart, almost regardless of when you come in. This is the most ideal period for accumulating funds for children education funds or retirement/old age funds.
Can’t manage your own investment? Working with a competent adviser with a cool head would be a good idea. Though the volatility nature of this investment can be a roller-coaster issue, one will eventually come out a winner with time on his/her side and sound investment fundamentals. I will discuss more about unit trust investing tactics and strategies in the near future.
View the full chart here (this will appear in a new window).
Have a burning question? Let it out here.