WANT TO INCREASE YOUR
UNIT TRUST INVESTMENTBY MORE THAN IN 4 YEARS?
200%
Unit trust data as of 30 October 20101
DON'T YOU FEEL DISGUSTED/ANGRY WHEN ... YOU ARE GETTING
NOWHERE/STUCK WITH YOUR CURRENT UNIT TRUST INVESTMENT FOR QUITE
SOME TIME NOW? ... OR EACH TIME YOU ASKED/CALL YOUR UNIT TRUST
AGENT ABOUT YOUR NOT-SO-GREAT INVESTMENT RESULT, HE/SHE WILL ALWAYS
ASSURE YOU THAT YOU ARE IN FOR THE LONG HAUL? ... OR YOU THINK THAT
INTEREST RECEIVED FROM ASB, EPF, FIXED DEPOSIT OR REGULAR SAVING
ACCOUNT IS SO SMALL THAT YOU WISH FOR AN INVESTMENT THAT CAN OFFER
MORE THAN WHAT CAN BE ACHIEVE FROM THOSE TYPE OF INVESTMENTS ...IF
YOU ANSWERED YES IN ANY ONE OF THOSE QUESTION, THEN READ ON
...2
Answer for question #1 & #2: There are 2 things that
directly impact your unit trust investment: Which fund to invest,
and When is the right time to buy or sell your fund
Answer for question #3: Unit trust investment are proven to give
higher profit compared to ASB, EPF, Fixed Deposit and bank
saving3
INTRODUCTION
KHAIRUL ARIFIN BIN SELAMAT Consultant for CIMB Wealth Advisors
Bhd (Agent Code: 00025003). Author of ebook on stock market
investing technique: http://www.sistemsaham.com Share and unit
trust Investment blog: http://www.epinula.com Share and unit trust
Investment Facebook page: http://facebook.com/epinula
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TYPE OF FUND TO INVEST IN UNIT TRUST?
There are 4 main category of unit trust fund: Equity (consists
mostly of stocks) Fixed Income Money Market Mixed Asset Funds that
gain the most during market up trend is EQUITY fund. To maximise
profit, invest in Equity related fund and use MARKET TIMING AND
SWITCHING method.5
1,150.00
1,350.00
1,550.00
1,750.00
1,950.00
750.00
950.00
KLCI CLOSE IEAF
Market timing is on the index (KLCI). What action to take
(buy/sell/switch) depends on signal produced by KLCI index
(Downtrend switch/sell OR uptrend - buy)0.0000 0.1000 0.2000 0.3000
0.4000 0.5000 0.6000 0.7000 0.8000
20060509 20060605 20060629 20060725 20060818 20060914 20061010
20061108 20061204 20061229 20070126 20070226 20070322 20070417
20070516 20070611 20070705 20070731 20070824 20070920 20071017
20071113 20071207 20080107 20080205 20080304 20080331 20080424
20080522 20080617 20080714 20080807 20080903 20080929 20081028
20081121 20081218 20090116 20090217 20090316 20090409 20090506
20090601 20090625 20090721 20090814 20090910 20091008 20091103
20091130 20091228 20100122 20100222 20100319 20100414 20100510
20100604 20100630 20100726 20100819 20100917 20101013
WHAT FUND TO INVEST (cont.)
Graph shows that Equity related fund (e.g. IEAF), mirror the
KLCI index movement.
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WHEN TO BUY, SELL OR SWITCH YOUR FUND?THERE ARE 3 TYPE OF UNIT
TRUST INVESTMENT METHOD:
BUY & HOLD (B&H) DOLLAR COST AVERAGING (DCA) MARKET
TIMING AND SWITCHING (MTS)7
DIFFERENT UNIT TRUST INVESTMENT METHODBUY AND HOLD (B&H) Or
buy and forget. A passive investment strategy based on the premise
that over long periods of time, the returns from common stocks/unit
trust will exceed the returns earned from other investments.
Advantage : Very simple investment method Disadvantage : Things
don't last forever.
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DIFFERENT UNIT TRUST INVESTMENT METHOD (cont.)DOLLAR COST
AVERAGING (DCA)
Investing equal dollar amounts regularly and periodically over
specific time periods (such as RM200 monthly) in a particular
investment or portfolio. Giving the investor a lower overall cost
for the shares purchased over time. Advantage : Small starting
capital. Small subsequent monthly investment. Disadvantage :
Transaction fees can be substantial (HUGE!).9
DIFFERENT UNIT TRUST INVESTMENT METHOD (cont.)MARKET TIMING AND
SWITCHING (MTS)
Market timing is the practice of buying and selling securities
based on economic trends, corporate information, and market
factors. It is also known as tactical asset allocation or active
investing. Advantage : Able to maximise the potential return from
market up trend and minimise the risk/loss during market down
trend. Disadvantage : Very difficult to be successful at market
timing. Have to actively manage portfolio.10
UNIT TRUST INVESTMENT METHOD PERFORMANCE COMPARISONDCA
Initial minimum investment RM500 and minimum regular saving of
RM200 per month. Overall percentage increase : 35.31% Compound
annual growth rate : 7.36%
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UNIT TRUST INVESTMENT METHOD PERFORMANCE COMPARISON
(cont.)B&H
Initial investment RM5,000 Overall precentage increase (4 years)
: 62.26% Compound annual growth rate: 12.86%
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UNIT TRUST INVESTMENT METHOD PERFORMANCE COMPARISON
(cont.)MARKET TIMING AND SWITCHING (MTS)
Initial investment RM5,000 Overall percentage increase (4 years)
: 201.04% Compound annual growth rate:
31.72% !!
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UNIT TRUST INVESTMENT METHOD PERFORMANCE COMPARISON
(cont.)Comparison Between 3 Unit Trust Investment Method
Percentage (%)
250.00% 200.00% 150.00% 100.00% 50.00% 0.00%
201.00%
201.04% 182.97%
62.26% 32.88%
MethodMARKET TIMING AND SWITCHING METHOD (Using ISCF and IMMF)
BUY AND HOLD METHOD MARKET TIMING AND SWITCHING METHOD (Using IEAF
and IMMF) DOLLAR COST AVERAGING METHOD MARKET TIMING AND SWITCHING
METHOD (Using DALI1 and IMMF)
Comparing the overall performance (within 4 years) of 3
different unit trust investment method. Green bar is the investment
performance if invested in CIMB Islamic Small Cap Fund (high risk)
using MTS method. Red bar is the investment performance if invested
in CIMB Islamic Dali Equity Growth fund14 using MTS method.
UNIT TRUST INVESTMENT METHOD PERFORMANCE COMPARISON (cont.)
COMPOUNDING - The ability of an asset to generate earnings,
which are then reinvested in order to generate their own
earnings. In other words, compounding refers to generating earnings
from previous earnings.
Comparing effect of compounding on future investment value based
on RM10,000 initial investment within 10 years:Annual Growth rate
Initial investment Year 2 Year 4 Year 6 Year 8 Year 10
Method
DCA B&H
7.36% 12.86% 31.72%
RM10,000 RM10,000 RM10,000
RM11,526 RM12,737 RM17,350
RM13,285 RM16,224 RM30,102
RM15,312 RM20,665 RM52,228
RM17,649 RM26,322 RM90,617
RM20,343 RM33,527 RM157,223
MTS
As shown above, the compounding effect on investment when using
MTS method is HUGE. In the 10th year, MTS investment value was 15 8
times the investment value of DCA and 4.7 times the investment
value of B&H.
UNIT TRUST INVESTMENT METHOD PERFORMANCE COMPARISON
(cont.)Investment Value IEAF(MTS) vs IEAF(NON-MTS)RM15,000.00
RM13,000.00 2,500.00 RM11,000.00
RM7,000.00
1,500.00
RM5,000.00
RM3,000.00
RM1,000.00
500.00
DateIEAF(MTS) Value IEAF(NON-MTS) KLCI CLOSE
Comparing the investment value between UT with MTS Method, UT
without MTS and KLCI Index (for reference only.
16
KLCI index
RM9,000.00
RM
WHAT METHOD TO USE TO MAXIMISE PROFIT?
MARKET TIMING AND SWITCHING METHOD give the best return compared
to B&H and DCA. The risk is still there (market fluctuation),
but... By having EXIT STRATEGY and ENTERING STRATEGY to protect
both CAPITAL and PROFIT we can minimise and control the risk.17
HOW TO INVEST IN UNIT TRUST
Cash (bank draft) or EPF withdrawal. Minimum investment RM1,000.
Forms to fill: Account opening form Transaction form Permohonan
Pengeluaran Pelaburan Ahli (for EPF investment) Pre-Investment
form
Supporting documents: Photostat of IC (3 copy) Latest EPF
statement (for EPF investment)18
FOR FURTHER INFORMATION
Khairul Arifin bin Selamat Stock Trader, Unit Trust Consultant
Email : [email protected] / [email protected] Handphone :
013-3941239 Khidmat pelaburan unit trust:
http://unittrust.epinula.com. Blog: http://www.epinula.com Kaedah
Mudah Melabur Dalam Pasaran Saham: http://www.sistemsaham.com
Facebook Profile: http://www.facebook.com/khairularifinselamat
Facebook Page: Melabur dalam saham dan unit trust di Malaysia
http://www.facebook.com/epinula
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