Recently, i attended Yap Ming Hui talk on "Stretch your ringgit - investment & wealth management 101". He is one of Malaysia's foremost authorities on financial freedom. He is the author of five best-selling books. His latest book is Roadmap to Financial Freedom : The Ultimate Guide to Achieve Financial Freedom:
http://www.mphonline.com/books/nsearch.aspx?do=detail&pcode=9789834172442
Some of my friend able to capture few key point during his talk in Unit trust. And i would like to share with everyone who invested in Unit trust:
1) Time horizon provision
- make sure have holding power
Share Property Bond Fix deposit
Potential return H H M L
Volatility H L M L
Liquidity M L M H
The right money in the right bucket
Low risk assets – saving, current acc, fixed deposits(keep ~6months money) à liquidity (low risk low return)
Moderate risk assets – balanced investment, diversified, selected property à retirement, children’s education, wealth enhancement (consistent above average returns, limit downside risks)
High risk assets – direct stock, IPOs, single country, theme funds, lottery à high returns/thrill (high risk high return)
2) Target ROI return – align portfolio with target
Moderate risk investor targeting for 8-10% annual ROI
3) Asset allocation (diversify) avoid concentrated risk and reduce volatility
4) Best of breed funds (invest in good funds, avoid lousy funds) –choose quality investment
5) ROI optimization – optimize portfolio ROI
6) regular rebalancing – help you to buy low sell high
7) dollar cost averaging (DCA) – help you to buy more at low price
8) cost effective and efficient platform - minimize hassle and cost
one more reminder from Mr Yap: if you are not practicing 4 or 5 out of the 8 guideline, or you do not plan to practice more guideline, please do not invest in Unit trust and find other product. For sure you will lose $$.
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