ONLY "NOT SO SMART" PEOPLE INVEST IN MUTUAL FUNDS

batu kikir

Scenario:

You work long hours to get your hard earned pay. 11 to 16% of your salary will go to EPF, another portion will go to household chores, another to your car and housing loan repayment and a little bit of it you will save in your savings account. Out of the blue, one young guy (twenty something) out of nowhere approach you to buy unit trust using your EPF. You agreed and sign the documents on the pretext "invest for long term and diversify your portfolios". You take out Ringgit 50k of your EPF and get x numbers of unit trust. 5 years later, you check your investment. True enough your unit trust has increased by the numbers BUT when you calculate the total amount it gives you a mere Ringgit 45K, a shortfall of 5k over 5 years. Does this sound smart?

So investors, be careful with the sweet tongue unit trust sellers who have neither experience in the world of investment nor the capacity to forecast and advise. The truth is that......they are earning commission nor matter where the market goes. Ultimately they will have the last laugh to the bank. Don't you ever read from recent newspaper article about a young unit trust agent about 22 years old earning Ringgit 100K a month and drive a Jaguar and own a condo. What experience does he have in the world of business and investment? What make it so easy for you to depart your hard earned money to someone who is a perfect stranger to you afterall?

Note:
Adapted story from a friend of mine.

zamz00

waa statement ni cam looking down at those people yg invest in unit trust je..

actually tak semua yg invest belasah je...
ada jugak yg can be considered smart investor..
they buy unit trust at the right time and sell at the right time..

bukan belasah beli and simpan 5,6 tahun...yg ni mmg tak smart

sany48

Originally posted by batu kikir at 24-9-2005 11:34 AM
Scenario:

You work long hours to get your hard earned pay. 11 to 16% of your salary will go to EPF, another portion will go to household chores, another to your car and housing loan repayment an ...

Hi,

Life is all about choice.. No doubt about it...If you choose a good work, you will get better pay..there is also a good pay.. but it not a good work such as robber.. snacther.. stuff like that..

So, investment is also about choices.. as long as you have money. you can save the money

a. in the bank as a saving account or even fixed deposit.. in return you wil get 3% and 3-4% (depend on the number
     of month) interest/profit - NO RISK
b. in ASB and enjoy deviden like 7-8% per year (A bonus 2.25% is meant for those whom save more than 10 years)
   - NO RISKS
c. in Tabung Haji yet get like 4-5% dividen -NO RISKS
d. in Bank Rakyat (15% dividen for the last 7 years) too bad it is not longer available. - NO RISK
e. in EPF (compulsory) and get dividen 4-5% per year - NO RISK
f. to your friends..let him do some business.. RISK? Yeap.
    1. You will lose the money due to no profit, thus
    2. Lost a friend
g. in share market and get profit in short term...but you have to daily monitor the share...RISK
or you might to CONSIDER take some moderate risk by saving in unit trust and enjoy like 8-12% profit per year

You can choose all of the a-g steps as long as you have the money..but if you dont have one. JUST go and work harder

Just because
  a. you do not feel comfortable about unit trust..
  b. you have NO money.
  c. you are too ignorant
  d. you have bad experience about it..
  d.you  are not a risk taker

you cannot simply influence others to follow you.. even if you plan to..you will not get anything...actually people have better perspective now.. they can tell...

Again, back to En Mahadi, at 22 years..became a millionaire.. do you think you would be able to follow his step? He started right from riding a Honda EX5..up to Jaguar S-TYPE... of course he has been showing tremendous change.. he believes in himself.. can u? also people prefer to see.. and invest to a person who has a lot courages..that is one of the way he manage to promote unit trust to his clients

As for En Mahadi, he does not sell and buy shares.. he might have known the business quite a bit.. he has the power of selling..do you have one? But once you have invested, all you money will be managed by a professional Fund Managers (in SBB , we have Mr Arnold Lim CFA, 20 years) and and TRUSTEE such as ARB, etc. So you people out there.. do not worry. you are SAVE!

With regards to agent, what you have to do.. is to make sure you get a right agent.how to get a right agent..
To be continued!

To answer your question about losing in 5 years,
To be continued

To see the returns, each unit trust company will have to published a master prospectus to the client once a year.
You can even log on to www.sbbmutual2u.com for further details. Also you can log on to my website www.investwithsany.com also...

Regards
Sany

[ Last edited by sany48 at 24-9-2005 07:24 PM ]

MACD

A 'smarter' investor would invest directly into the Bursa Malaysia. Kenapa perlu bayar 1.5% annual fees & 6.5%initial charges kat unit trust. Banyak tuuuuuuuuu.

Utk unit trust agents sorry, this is just my opinion, you may want to disagree.

sany48

Originally posted by MACD at 24-9-2005 12:56 PM
A 'smarter' investor would invest directly into the Bursa Malaysia. Kenapa perlu bayar 1.5% annual fees & 6.5%initial charges kat unit trust. Banyak tuuuuuuuuu.

Utk unit trust agents sorry,  ...

Hi,

I am one of the SBB agent.. but hey.. I do not feel bad about it..I would consider it is one of the rejections.. you wanna how do I deal with it?

Well..let me approach in a few ways.

1st - Time to monitor

Let say you are a full time employee of a company..and have RM1000.00 cash in hand.

If Bursa Malaysia if you buy from blue chips counter ..let say TELEKOM at RM10.00 per unit, you will get 1000.00 . My question is..will you be able to monitor it all day long? Do you have enough capabities to analyse the market? Please remember you are the Manager of the company.with 10 or more people to manage.. can you afford to do that?

For unit trust, again.. you money is managed by professional Fund Managers..and TRUSTEE..these people are paid to look after your money.. their merit is base on performance..so they MUST perform.. but you don't expect this people to work and perform for free, right? then...let us go to the next one..

2nd Approach

In Bursa, there are also some charges...Of course you TELEKOM will impose some entry and exit charge whenever there is a transsations

Let say for RM1000.00 investment, you will charge like 0.75% per entry for brokerage fee..plus exit fee whenever you wanna sell... that is fair..nobody question it..

Iin unit trust, let say if you have RM1000.00, your money is invested in not only once single counter..do not be surprise your money also contributed to Bond - if you invest in Dana AlMizan (Even minimum investment is RM 5 mil)

Now, if you invest in Dana Al-Ihsan, your money will be invested into (Base on Fund Fact Sheet, May 2005)

   1. MISC 8.80%
   2. Maxis(4.43%
   3. Digi 3.89%
   4. Transmile 3.55%
   5. Scomi 3.37%             TOP  5 HOLDINGS
   6.
   7.
   8.
   9.
  10. etc  - Total 100%

So you might be asking how on earth you would be able to do that?

Well, there are another 10,000 people who are investing like you do.. now the funds, it become
        
       1,000 x 10,000 = 10,000,000 .00

With these funds, the fund is diversified into 12 counters..

     If you use the same charge applied in Bursa, it means that  0.75 x 12= 9%

     Whereas Unit trust fund / Dana AlIhsan only charge you 6.5% + 1.5% annual fee = 8% (That is it-no hidden
     charge, no exit charge)
      
As a result, investing in unit trust is much more economical as compared to normal counter in Bursa

3rd Approach

Since you have more than 12 counters invested in, it will actually balance up you profit because not all the shares will do own..some go up....

But if you invest in Bursa, with that kinda money.. let say in Telekom, you will expose yourself to one single share.. so it igoes up.you make profit.. it goes down, you can say anything...


MORALE of the story
It is better to invest in unit trust than share in Bursa. Unit trust offer less risk, diversify in investment, less monitoring in ur side., etc

But if you still want to invest in Bursa, JUST DO IT!

Regards,
Sany

Originally posted by zamz00 at 24-9-2005 11:49 AM
waa statement ni cam looking down at those people yg invest in unit trust je..

actually tak semua yg invest belasah je...
ada jugak yg can be considered smart investor..
they buy unit trust at ...

correcccttt!


Smarter mutual fund investor will switch fund between aggresive, balanced and bond fund at the right time. Most Mutual Fund allow a free fund switching up to 2 times a year, which is usually more than enough. The smart investors will always monitor the market and make their own decision. They don't blame the agents for not advicing them when the market is down, and they don't praise themselves silly when the market goes up. They know that whatever happen to their money, it is entirely their own decision. They are in control, not being controlled by others.

To do that, they must learn how to read the market. They learn to improve themselves, because they know that no one is more interested in their money than themselves.

[ Last edited by Eus at 24-9-2005 09:08 PM ]

Originally posted by MACD at 24-9-2005 12:56 PM
A 'smarter' investor would invest directly into the Bursa Malaysia. Kenapa perlu bayar 1.5% annual fees & 6.5%initial charges kat unit trust. Banyak tuuuuuuuuu.

Utk unit trust agents sorry,  ...

You can't do that with your EPF money.

EPF just give a mere 4+ % per annum interest. Invest those money smartly in Mutual Fund may give you more in the long run. By "invest smartly", I mean you must decide when to go in, when to move out, and when to switch between funds. Opposite of that is called "to invest blindly".... :cak: ;)

Originally posted by sany48 at 24-9-2005 02:01 PM



MORALE of the story
It is better to invest in unit trust than share in Bursa. Unit trust offer less risk, diversify in investment, less monitoring in ur side., etc

I have to disagree.

When a person just left his money in the hand of the Mutual Fund blindly, the risk will be not much less. At the very least, he will have to take the risk that his money in Mutual Fund to grow slower than his money in EPF.

Whether you like it or not, not many MF agents are knowledgeable in the mechanic and dynamics of the market. At the heart of MF engine is actually a group of MF traders, who do the actual buying and selling in the market. They are the people who actually eat and sh*t with the market. Unfortunately, they don't tell everything to their agents/sales person. If they do, the agents probably won't do the sales without guilt....

[ Last edited by Eus at 24-9-2005 09:20 PM ]

shahgti

Originally posted by Eus at 24-9-2005 08:57 PM



correcccttt!


Smarter mutual fund investor will switch fund between aggresive, balanced and bond fund at the right time. Most Mutual Fund allow a free fund switching up to 2 times a year, ...

but in reality is different. once they dump their money into UT most of ppl out there definitely will depend on their UT agent. BLINDLY. as they know nuts about UT performance as well as no time to monitor. how to choose a competent UT agent? same answer again, since they know nuts about UT, how are they able to choose a good UT agent?? all UT agent for sure will claim they are the best. same goes to insurance agents. so if not equip with knowledge, they better max their investment  in ASB. better choice, we learn about unit trust our self. investment strategy important dlm unit trust. tapi cannot totally depending on unit trust agent. as unit trust ni kita kena monitor sentiasa. take initiative to take exam dgn FMUTM to be certified unit trust agent. so boleh invest sendiri dan jadi self agent, boleh avoid dari bayar banyak komisen kat orang lain. bila dah pandai monitor,  boleh buat switching sendiri. meaning kita boleh move investments between funds in response to changing financial goals or market conditions. so cara ni lebih selamat. but what do we expect for makcik2 & pakcik2 persuade by agent to invest in UT? pls, let them keep their money in ASB.  my 2 cents.

sany48

Originally posted by Eus at 24-9-2005 08:57 PM



correcccttt!


Smarter mutual fund investor will switch fund between aggresive, balanced and bond fund at the right time. Most Mutual Fund allow a free fund switching up to 2 times a year, ...

Agreed!

But for some reason, smart investors may fully utilize the agent as well. The agent responsible not only to make sure the smart investor get what they want, but also to assist the smart investor in any way... They just can't leave them alone.

Also, once a smart investor has time, he/she also can become an agent. It solves the problem for good....hahahahh

Regards,
Sany

[ Last edited by sany48 at 25-9-2005 01:22 AM ]

sany48

Eus wrote:

I have to disagree.

When a person just left his money in the hand of the Mutual Fund blindly, the risk will be not much less. At the very least, he will have to take the risk that his money in Mutual Fund to grow slower than his money in EPF.

Do not get me wrong here.. what I am trying to say... it will be much helpful if you can rely on someone especially your agent to look after your investment as compared to Bursa where you have to look on your own.. But if you are keen enough to do so..it will better....

Whether you like it or not, not many MF agents are knowledgeable in the mechanic and dynamics of the market. At the heart of MF engine is actually a group of MF traders, who do the actual buying and selling in the market. They are the people who actually eat and sh*t with the market. Unfortunately, they don't tell everything to their agents/sales person. If they do, the agents probably won't do the sales without guilt...

I agree with you 100%.. that some MF agents are not knowledgable enough.. but it is more individual things...Actually,  there are a lot channels for them to learn.. ( paid or FOC ) training available either from the agencies, branches or even regional one. It is a matter how much the MF agents like to let them expose to this kinda information. So, we cannot blame on anyone else. Plus, those MF agents whom have less knowledge.. not interested to learn more about the business.. they won't stay that long ...believe me!...

Morale of the story
Everyone is responsible with what everyone is doing... the MF agents or  the smart investors are not suppose to blame one to another. It is because it  will not solve the problem...



Regards,
Sany

[ Last edited by sany48 at 25-9-2005 01:41 AM ]

sany48

Originally posted by shahgti at 24-9-2005 11:10 PM



but in reality is different. once they dump their money into UT most of ppl out there definitely will depend on their UT agent. BLINDLY. as they know nuts about UT performance as well as no t ...

Hi,

You are right....just one quick question.. Do you think most of the people can do that.....as for me.. I fit your category..I am an investor myself and also an agent. So I know the business quite a bit... I seldom miss the training every week too. Besides getting new information about unit trust, I am also motivated....

Mr/Ms shahgti, are you an investor cum an agent too?








Sany

shahgti

Originally posted by sany48 at 25-9-2005 01:48 AM


Hi,

You are right....just one quick question.. Do you think most of the people can do that.....as for me.. I fit your category..I am an investor myself and also an agent. So I know the busin ...

i'm investor but not agent for any of investment product. i play by my self & take my own calculated risk.

bb_nessa

I'm not truly an investor, but I do a little investing, bought a home for rent (or just for living), ASB Loan, a little product selling product.....

Originally posted by shahgti at 24-9-2005 11:10 PM



but in reality is different. once they dump their money into UT most of ppl out there definitely will depend on their UT agent. BLINDLY. as they know nuts about UT performance as well as no t ...

To those pakcik and makcik, they actually were buying "hope". Serupa la macam orang jual dan beli insurance etc... buying and selling "hope".

But beside that, most of the time, UT gave a better returns compared to EPF's. Most of the time, even if you left your money in most funds without touching or monitoring, and reinvest your profit, you'll get more in the long run. But the investors usually kept in the dark when the agent's advice were needed the most, i.e. when the country's or world's economy went down, no one, including the agent will advice you to pull out your entire investment and put them back to EPF! Why? I guess the agent's bosses won't allow them to do so....

ASB is undeniably the most flexible and safest investment vehicle for the non-savvy investor, BUT unfortunately, we can't invest our EPF money in it....

batu kikir

Originally posted by sany48 at 24-9-2005 12:51 PM

"But once you have invested, all you money will be managed by a professional Fund Managers (in SBB , we have Mr Arnold Lim CFA, 20 years) and and TRUSTEE such as ARB, etc. So you people out there.. do not worry. you are SAVE!

One key question I wanna ask

"WILL YOU GUARANTEE THE INVESTMENT WILL BE SAVE AND CAN DEFINITELY BRING IN GOOD RETURN?"

batu kikir

Originally posted by Eus at 26-9-2005 08:46 AM



To those pakcik and makcik, they actually were buying "hope". Serupa la macam orang jual dan beli insurance etc... buying and selling "hope".

But beside that, most of t ...

When we talk about investment, do you confine your investment definition to a narrow scope like buy/sell shares, money market instruments, unit trusts etceteras.

Ooooppppsss.............shall we try to think "outside the box", please.

Originally posted by batu kikir at 26-9-2005 10:37 AM


When we talk about investment, do you confine your investment definition to a narrow scope like buy/sell shares, money market instruments, unit trusts etceteras.

Ooooppppsss.............shal ...

I confined my discussion here to the "stupidity" of those who do investment in UT using EPF money, which I believe the main issue in this topic opened by yourself. Correct me if I'm wrong, but that's what you called those who invest in UT using EPF money, i.e. "stupid".

... unless it is in your opinion that every investment topic in this forum is to discuss EVERYTHING under investment sun.... If so, then there is no point having so many topics. We can have one single topic and starts discussing EVERYTHING in it...



;)

[ Last edited by Eus at 26-9-2005 11:10 AM ]

sany48

Originally posted by shahgti at 25-9-2005 06:30 PM


i'm investor but not agent for any of investment product. i play by my self & take my own calculated risk.

Good for you.. do not know.. or do not know.. you can get 2-in1 things.. being an investor and an agent about the same time...being an agent for me..again.. it is more than getting commissions.. it is a good and noble job..to do for me now..seriously..also it makes really appreciate people better..there is a case which I have gone thru.. To be continued

Let me share about myself in advance.....not compulsory to go thru  it...

Actually I am attached to a big company still..it is just me.. feel too small... I am kinda like a small fish in a bing pond... asa salaryman. for 10 years...I am quite stable..you know..with everything I have now..thanks God.. but you know.. how long I wanna be that.. to maintain that kinda lifestyle.. from 9am-8pm ..5 days and a half.. I am belong to my boss..until 55.. if the boss likes me...

So, I have found myself a part time unit trust consultant with SBB Mutual Berhad..Previlously, I am looking for extra income. but not part of it ..it has changed. it more like being a GIVER..such as
  a. Educate people to invest in a vehicles which give higher returns
  b. Educate people to start developing saving HABIT
  c. Share some of my knowledge about the  financial ..even I know about 5% extra..
  d. helps clients/friends with anything.. once I  have a clients, I do have new friends too


That is about it...just to share...nothin more.. nothin less...

Regards,
Sany

sany48

Originally posted by bb_nessa at 25-9-2005 06:37 PM
I'm not truly an investor, but I do a little investing, bought a home for rent (or just for living), ASB Loan, a little product selling product.....

Well done!!!!!!!!! You have the vision yourself.....what kinda product do you sell?