Lesson 2 – Your Benefits With Unit Trusts

Posted on April 20th, 2008 by thenmozly in Financial Planning


You can Read Lesson 1 first.

Professional Investment Management

A unit trust combines the capital of many investors to employ experienced management in purchasing securities of many companies. The management of a unit trust provides diversification of investments and supervision which few investors could individually afford. Investment management is a full time job requiring specialised knowledge and training. It involves the study of a variety of factors.

Some of the factors which have to be examined are,

  1. Comparisons of all industries in the economy
  2. Relative studies of companies within a promising industry
  3. Personal contact with management of promising corporations
  4. Evaluating the effect of international events, both monetary and political
  5. Determining the results of government policies on each industry

Professional management is also interested in studying less obvious factors such as wage rates, which might affect the economy or the profitability of certain companies or corporations. It requires careful study of individual companies within the industry to determine which of the many companies offer the best prospects for the investors. It requires comparing this company with the best companies in other promising industries. Since all this factors are constantly changing, re-evaluation and study have to be continuous.

Diversification

Diversification means spreading one’s investments among many securities. It is an important method of reducing risk. It decreases the danger of damaging losses, which can occur through having all of one’s eggs in one basket.

Diversification is difficult and expensive for a small investor because the cost of purchasing numbers of shares in many companies at the same time is disproportionately high.

Unit trusts with their resources are able to make widely diversified investments available to even the smallest investor. Diversification involves the ownership of many different securities. All the securities owned by an individual investor or unit trust fund are referred to as an investment portfolio.

Liquidity

An investor can sell his units, wholly or partially, at the following trading day’s unit buying price. Units have a high liquidity, that is, they can be readily converted into cash.

It has to be remembered, however, that unit trust’s units will be redeemed at the prevailing buying price on the following day after receipt of the repurchase form. The unit price may be higher or lower than the price at which the investor started the plan. Unit trusts should be regarded as a long term, rather than short term investment.

Advantages of Compounding

Many unit trust funds provide facilities for investors to reinvest their distributions. For those who opted for distribution reinvestment, the fund will automatically credit the distributions into the account, rather than sending distribution warrants.

This process of reinvesting the income from the original investment and also of reinvesting the return on the total accumulating investments is called compounding.

As an illustration, if at 25, you invested RM100 at the beginning of every month at an interest growth of 10% per annum until age 65, your investment would have grown to RM638,000 ! The key element to compounding is time. The longer the period of time, the greater the growth.

Regularity of Investing

Many people do not have substantial sums of cash available to invest, but they can develop an investment account, investing smaller sums regularly in a unit trust.

Most unit trust funds have plans available to make it possible for smaller investors to invest relatively small amounts monthly. It is easy and inexpensive for an individual to acquire units through deposits of RM100 or more a month in a unit trust fund.

Fund Administration – The Convenient Factor

Few people have the experience, time or facility to properly set up an investment programme, much less to supervise it constantly. Unit trust managers have emerged as professional organisation devoted to solving the investment problems of people from all walks of life.

Unit trusts relieve their investors of the need to handle their own securities transactions. Investors in unit trust funds are not obliged to concern themselves with matters such as,

  1. Obtaining quotations on securities being bought and sold
  2. Delivery and payment for the securities involved in each transaction
  3. Safekeeping of cash and securities
  4. Accounting and bookkeeping procedures, etc

Investors of unit trust funds will receive semi annual and annual reports which describe

a. The portfolio of the funds

b. Investment changes made in the period

c. Distributions paid, if any

d. Fund manager’s opinion on the economic and market outlook

Source:http://www.publicmutual.com.my/article.aspx?id=87

Leave me your contact if you need further information on Public Mutual Investements:)

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Financial Freedom!

Posted on April 20th, 2008 by thenmozly in Financial Planning, Uncategorized


Financial Freedom! Say those two words to yourself; savour them mentally, even as you vocalise their five syllables.

At the dawn of the 21st century, each of us has the right to dream of a better future. Here in Public Mutual, we play a major role in clothing such dreams with muscle and sinew for our 500,000 (and counting) investors. The concept of Financial Freedom is integral to our long-term focus.

So, what precisely do we mean by that catch phrase? Two things.

From your perspective, achieving financial freedom means building an investment portfolio successful enough to generate sufficient passive income to cover all expenses. The moment you achieve this state, you will no longer be shackled to a job you hate. You can choose to follow the dictates of your heart and labour only at what fills you with passion and significance. It is, we think, the best way for you to leave a lasting legacy.

From Public Mutual’s vantage point, Financial Freedom is tightly intertwined to our branding as a Malaysia’s leading private unit trust management company. Thus far, we have created four distinct products under this banner: Two books, each of which has risen to the status of Malaysian bestseller, and two CD-ROMs. (The net proceeds flow into our Financial Freedom Charity Drive that continues to help dozens of worthy causes.

Source:http://www.publicmutual.com.my/page.aspx?name=ff-introduction

Leave me your contact if you need further info on Public Mutual Investments:-)

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Home sweet home:)

Posted on April 13th, 2008 by thenmozly in Daily, Uncategorized


can you imagine that i’m working on Sunday! Oh yeah, did i tell u that i hv backlog work need to be finished before i can celebrate Puthandu:)

Manage to clean the house yesterday. Just left things to buy for the prayer. You may ask me if there is naything special;) hmm…what else can be special rather than goin to temple with hubby:) I’m looking forward for this evening to go to temple. I’m always overjoyed whenever my hubby said, ok lets go to temple! I’m still not sure if i’m wearing new clothes. I didn’t buy any. But i remember i have some new sarees hanging there in my cupboard for few yrs..hmm..maybe this is the best time to wear it. How about hubby? oh yeah he has some new shirt too;)

So guys, how about u’ll? any plan thsi evening?

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