TYPE OF BASIC INVESTMENT

What are the types of investment out there?

1.) Bonds 

• Also known as fixed income securities.
• When you purchase a bond, you are lending out your money to a company or government. In return, they agree to give you interest on your money, and eventually pay you back the amount you lent out.
• Bond are practically have a guaranteed return and risk free if you are buying from a stable government, but due to little risk, it also gave small returns.
• Bonds is one of the lowest return on investment instrument due to low risk.

2.) Stocks (Saham)

• Also known as equities.
• Buying it would make you become part of the business owners.
• Entitled you to vote at shareholder's meeting and allows you to receive any profits or dividends allocated to it's owners.
• Very volatile, fluctuate on daily basis.
• No guarantee of profits when buying, not even dividends. Most of the profit source comes from the stocks value goes up.
• Relatively HIGH RETURNS, comes with the risk of losing some or all your investment.

3.) Mutual Funds (Unit Trust)

• A collection of stocks and bonds.
• When you buy a Mutual Fund, you are pooling your money with a number of investors, which enable you to pay a professional manager to select specific securities for you.
• Each mutual fund have their own strategies example large stocks, small stocks, government bonds, companies bonds, stocks and bonds, stocks in certain industries, and stocks in certain countries, etc.
• No time or experience needed to invest as you already have a professional manager to manage your funds.
• Relatively higher return than bonds, and lower return than stocks, but with a manageable risk.
• The risk will be lower the longer your investment period due to Dollar Cost Averaging (DCA)

RM1,000,000 is a necessity not a privilege at retirement.

Good day fellow readers,

Is ONE MILLION ringgit a value that we can be proud of? Maybe today, but in 20 years down, everyone must have that amount or more due to several reasons.

Challenges of Retirement

• Escalating Food Prices @ 3.5%*
• Escalating Healthcare Costs @2.3%*
• Escalating Education Fees @ 2.2%*
• Escalating Property Prices @ 10-15%**

*Department of Statistic Malaysia, May 2013

**The Malaysian Insider, April 2013

Rule of thumb, we should save at least 10% of our monthly income for retirement purposes. Do we really do that? Or are we been living in our debt every month without anything to spare, and hope for a miracle/bonus to pay off some but continue piling up that debt soon after?

Case scenario : You have been living your life in the exact way described above, and now you are 54 years old. Next month you will be retiring, and your only savings are from your EPF. There are around RM350,000 in there, and you smile happily thinking all the things that you could buy and places you could go with that money.

In 6 months you have almost depleted your EPF by settling your credit card, housing, and personal loans. Right now you have around RM15,000 left, with no income, and bills to pay (yes bills does not stop after you retired). You are desperate for income, and took the first opportunity to be a night guard in some shopping complex even though you have severe back pain issue. 

No choice, as your children have their own bills to be paid, and can only give meager amount of money to support their parents. And guess what, you didn't even have the chance to use the EPF money for your leisure, as the bills piled up by the time you retired due to the thinking that everything can be settled after EPF withdrawal.

Above scenario can be avoided with proper financial planning, and there are a lot of ways to do so. My name is Tajul Naim, a financial ADVISOR under CWA, and it is my job to advise people on how to manage their money healthily. If you are keen to know what can be done to make sure you have at least RM1,000,000 in hand by the time you retired, contact me now at 012-9232917.

I won't sugar coat the fact that the longer you wait the more money you need to invest. If you are in your 30's, by right you should have a plan already! If not, help me to help YOU by contacting me now!

Do now or regret later.

THE SECRET TO WEALTH

Whether you want to invest in shares or across a broad range of asset classes, unit trust funds provide you with one benefit that can be very hard for individual investors to achieve - diversification. 

Many people invest but only some become wealthy. 

Why?

The mistake many people make when investing is that they treat their investment as saving. 

Saving Versus Investing

So what is the difference between saving and investing? Saving is what you do to build up funds for something, like a holiday, and when you have the amount saved you withdraw your capital from your investment and spend it on the holiday. After the holiday you have nothing left, and start the process all over again. 

But building wealth is different. People who want to build wealth invest their money for the long term in 'growth assets' such as shares and property. 

Their strategy is to spend the income that the investment produces, but to leave the capital invested. They don't withdraw the capital, so it stays there growing and compounding, and producing more and more income each year. 

If you do this it will take you quite a while longer initially to get to your investment goal , but in the long run you will find that the extra wait has been worth it. As the years go by, you will have an increasing additional income stream from your investments and your standard of living can rise accordingly! 

Should I continue to retain capital in retirement?

Retaining your capital is a good strategy to use for wealth accumulation. Of course when you stop working later in life, your strategy may change. At that point it can often be beneficial to start drawing on some of your capital as well, whilst still ensuring that it will last for as long as you need it.

Reasons to choose CIMB Islamic DALI Equity Growth Fund

DALI Equity Growth Fund is an award winning mutual fund under CWA, which has won the BEST EQUITY MALAYSIA (ISLAMIC) 10 YEARS by THE EDGE/LIPPER FUND AWARD 2014.

Excellent historical performance for medium to long term growth.
In 3 years total the returns are 34.20%
In 5 years total the returns are 80.75%
In 2013 alone the returns for one year is 22%!

Fund manager portfolio:Arnold Lim Boon Lay, Executive Vice President. Head of Retail Equities. After five years at Citibank NA Kuala Lumpur, Mr Lim moved to the investment industry in 1989. His experience includes managing venture capital investments, unit trust funds and other institutional funds. During Mr Lim's tenure as General Manager of a local asset management house, its discretionary fund composite was ranked No 1 (94-98) on Information Ratio by Watson Wyatt. Mr Lim was also previously Head of Research of ING Barings Malaysia. Asia Money ranked him as 2nd best strategist in 2001.Master of Business Administration (University of California, Berkeley); Chartered Financial Analyst. He holds a Capital Markets Services Representative's License for fund management under CMSA.

HOW DO I GET STARTED?

There are 2 ways to start investing into funds under CWA, which is through EPF or CASH.

To check whether you are eligible for EPF withdrawal, you can go here, or PM me your Account 1 total and current age (including months), and I will get back to you within the same working day.

For CASH investment, the minimum to open up an account is RM500, and minimum additional investment is RM200.

I can be contacted at anytime 24/7 through Whatsapp/SMS/Phone call at 012-9232917 or through my Facebook page.

Unit Trust - What is it?

What are unit trust funds?

Unit trust funds, also known as managed investments, allow you to pool your money with that of many other investors so that the unit trust fund can buy a wide range of investments managed by a professional team. This includes investments which may not ordinarily be available to you through direct investment such as large commercial properties and corporate bonds. 

Direct investment versus unit trust funds - 'pros' and 'cons'?

Once you have decide to invest, you have a choice of investing directly or through a unit trust fund. Which method is appropriate may well depend on your individual investment needs, however, using professional fund managers can generally provide better returns over the long-term. 

Fund managers tend to outperform individual investors because:

• Their portfolios are constructed using a defined and consistent investment philosophy;
• Fund managers have a far greater access to quality information including company contacts, competitors and customers than do individual investors;
• Fund managers employ full-time investment professionals to monitor investment markets and the way economic developments affect these markets;
• The size of their portfolios generally means that fund managers can more easily reduce risk through greater diversification. They can also reduce risk by implementing sophisticated risk-management techniques involving the use of derivatives; and
• Fund managers have the economies of scale to reduce expenses through lower transaction costs. For example, fund managers generally pay much lower commissions to stockbrokers.

For whom are unit trusts most suitable?

Unit trusts are a simple and convenient investment option for people who have a long-term investment horizon but do not have either the time, desire, or expertise to invest directly in financial markets. 

Unit trusts can be particularly suitable for smaller, first time investors as they offer the opportunity to establish a broadly diversified portfolio of assets with a relatively small amount of money. 

However, larger investors can also benefit from unit trusts as they provide access to the expertise of professional investment managers. 

When you invest in a unit trust fund, your money buys 'units' in that fund, at a price that is struck for that particular day. Over the period in which you invest, the unit trust price will move up and down as the value of the investments with the unit trust fund rise or fall. Returns from a unit trust fund are typically calculated based on movements in the bid (or withdrawal) unit trust price and assume any income distributions paid to investors are reinvested in the fund as additional units.

Retirement Myth For Malaysian

Retirement - something that are not in our list of things to think about when you're in 20's, 30's, or even late 40's. But when the time we reached our 50's, suddenly it got us thinking, in a few more years "I won't be working anymore, and I haven't save anything other than my EPF. Hope that would be enough."

No it won't, unless as stated in point number one below, you're earning megabucks salary, you better start doing some thinking on whether you will have enough cash to live your retirement years.

Below are 5 myth that we need to digest and understand, but it is never too late to start planning your retirement, but the longer you take too realize this, the more you will need to invest to have a sustainable way of living your post-retirement days.




Tajul Naim
CWA Financial Advisor
012-9232917