For investors frustrated by a lack of competitive, safe, fixed interest investment alternatives; you need to find a consistent Income Stream can provide immediate or deferred returns and absolute safety of principal for your retirement passive income in future.
Why Invest In Stocks?
Investing is making your money work for you by getting your money to generate more money. Investing in stocks has consistently proven to be one of the most profitable forms of investment available.
The benefits include: Things to watch out for:
Can Ordinary People Profit from the Stock Market? Many people say things like "I'd love to get into the stock market" or "If I had more money, I'd invest in stocks". Many people also believe that to make a profit from the stock market you either need to be rich already, be a full-time investment trader or be a financial whiz.
Not necessarily so.
Let's take a look at three different scenarios of ordinary people in the stock market to see how they fared. This will let us view how the process works, the different approaches, and how returns are generated.
Check Bursa Malaysia website and read more
A common misperception among individual investors is that diversification helps eliminate risk. In fact, this isn’t necessarily true – while diversification can help reduce risk, its effectiveness in doing so depends largely on the way you diversify.
What Diversification Does, and Does Not, Accomplish
To gain a better understanding of appropriate diversification, it helps to understand why investors are encouraged to diversify in the first place, as well as two key functions that it doesn’t fulfill. First, let’s take a look at what diversification doesn’t do:
1) Diversification won’t improve your returns. Diversification isn’t a way to make more money. It certainly won’t make you rich, and there’s no guarantee that it will provide a better return than a non-diversified portfolio.
2) It doesn’t eliminate risk. There is so much discussion in financial literature about the ways diversification can reduce risk that many novice investors make the leap to assuming that it eliminates risk altogether. This isn’t the case – if you own investments whose principal can decline in value, you’re taking on the risk of loss no matter how well-diversified the portfolio.
Instead, the goal of diversification is to reduce the risks associated with “putting all of your eggs in one basket.” The idea is that not all asset classes move in the same direction, with the same magnitude, at the same time. In this way, investors can – but aren’t guaranteed to - experience a smoother ride in terms of the volatility of their overall portfolio.
A classic example is the combination of stocks and government securities (MGS). While it doesn’t always work this cleanly in real life, stocks typically respond well to an environment of improving economic growth, while Treasury bonds do not. Conversely, slower economic conditions typically lead to stronger performance for government bonds (find out why here), but it can be less favorable for stocks. By combining the two asset classes, the investor ideally creates an all-weather portfolio where one asset should be in a position to perform well under all economic conditions.
The investor may not earn as high of a total return from the combined portfolio by being invested entirely in stocks, but he or she would also have had the benefit of lower day-to-day volatility. In order to gain the full benefit of diversification, investors need to make sure that their portfolios are diversified by the type, rather than the number, of investments.
Unfortunately, many individuals take the approach that “more is better” when it comes to diversification. In other words, the more funds you own, the more effectively you have diversified your portfolio.
In reality, that isn’t the case at all. Consider an investor who purchases six blue chip stock funds, but with four that focus on large companies. Even if there are slight differences among the various funds, there is probably a high degree of overlap in the individual holdings. More important, all of those funds will exhibit very similar performance characteristics – meaning that when the market goes down, all of these funds are likely to fall by the same amount. As a result, it’s essential to choose investments that provide actual diversification and not just the illusion. When buying a new fund, an investor should ask his or herself:
Benefits of investing in a Global mutual fund?
As an investor, you would like to get maximum returns on your investments, but you may not have the time to continuously study the stock market to keep track of them. You need a lot of time and knowledge to decide what to buy or when to sell. A lot of people take a chance and speculate, some get lucky, most don t. This is where mutual funds come in. Mutual funds offer you the following advantages :
Professional management. Qualified professionals manage your money, but they are not alone. They have a research team that continuously analyses the performance and prospects of companies. They also select suitable investments to achieve the objectives of the scheme. It is a continuous process that takes time and expertise which will add value to your investment. Fund managers are in a better position to manage your investments and get higher returns.
Diversification. The cliché, "don't put all your eggs in one basket" really applies to the concept of intelligent investing. Diversification lowers your risk of loss by spreading your money across various industries and geographic regions. It is a rare occasion when all stocks decline at the same time and in the same proportion. Sector funds spread your investment across only one industry so they are less diversified and therefore generally more volatile.
More choice. Mutual funds offer a variety of schemes that will suit your needs over a lifetime. When you enter a new stage in your life, all you need to do is sit down with your financial advisor who will help you to rearrange your portfolio to suit your altered lifestyle.
Affordability. As a small investor, you may find that it is not possible to buy shares of larger corporations. Mutual funds generally buy and sell securities in large volumes which allow investors to benefit from lower trading costs. The smallest investor can get started on mutual funds because of the minimal investment requirements. You can invest with a minimum of RM1,000 for local and RM50,000 for global in a Systematic Investment Plan on a regular basis.
Tax benefits. Investments held by investors for a period of 12 months or more qualify for capital gains and will be taxed accordingly. These investments also get the benefit of indexation.
Liquidity. With open-end funds, you can redeem all or part of your investment any time you wish and receive the current value of the shares. Funds are more liquid than most investments in shares, deposits and bonds. Moreover, the process is standardised, making it quick and efficient so that you can get your cash in hand as soon as possible.
Dollar-cost averaging. With rupee-cost averaging, you invest a specific rupee amount at regular intervals regardless of the investment's unit price. As a result, your money buys more units when the price is low and fewer units when the price is high, which can mean a lower average cost per unit over time. Dollar-cost averaging allows you to discipline yourself by investing every month or quarter rather than making sporadic investments.
Transparency. The performance of a mutual fund is reviewed by various publications and rating agencies, making it easy for investors to compare fund to another. As a unitholder, you are provided with regular updates, for example daily NAVs, as well as information on the fund's holdings and the fund manager's strategy.
Regulations. All mutual funds are required to register with SC (Securities Exchange Board). They are obliged to follow strict regulations designed to protect investors. All operations are also regularly monitored by the SC.
The Bottom Line
Don’t make assumptions about diversification – while you think you may diversified, that might not be the case in reality. Always take a closer look to make sure your investments are meeting your objectives as intended.
In conjunction with our 25th Anniversary, we are pleased to inform that the Management has agreed to reduce the initial investment for Phillip Managed Fund (formerly known as Managed UT) and Phillip Managed Fund Global (formerly known as DWrap UTe) from RM50,000 to RM25,000. This promotion is valid from 1st March 2015 until 30th April 2015.
Enclosed herewith please find our quarterly report on both Phillip Managed Fund and Phillip Managed Fund Global for your perusal and read the past performances ( read below )
1. Phillip Private Managed Account for Local Mutual Funds.
2. Phillip Private Managed Account for Global Mutual Funds.
Disclaimer: The information on this site is provided for discussion purposes only, and should not be construed as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities. Be sure to consult investment and tax professionals before you invest.
Why Invest In Stocks?
Investing is making your money work for you by getting your money to generate more money. Investing in stocks has consistently proven to be one of the most profitable forms of investment available.
The benefits include: Things to watch out for:
- The market can be a volatile place.
- You must acquire knowledge of what you are doing.
- You must monitor your investments.
- You must learn the discipline to enter and exit the market on entry and exit signals.
Can Ordinary People Profit from the Stock Market? Many people say things like "I'd love to get into the stock market" or "If I had more money, I'd invest in stocks". Many people also believe that to make a profit from the stock market you either need to be rich already, be a full-time investment trader or be a financial whiz.
Not necessarily so.
Let's take a look at three different scenarios of ordinary people in the stock market to see how they fared. This will let us view how the process works, the different approaches, and how returns are generated.
Check Bursa Malaysia website and read more
A common misperception among individual investors is that diversification helps eliminate risk. In fact, this isn’t necessarily true – while diversification can help reduce risk, its effectiveness in doing so depends largely on the way you diversify.
What Diversification Does, and Does Not, Accomplish
To gain a better understanding of appropriate diversification, it helps to understand why investors are encouraged to diversify in the first place, as well as two key functions that it doesn’t fulfill. First, let’s take a look at what diversification doesn’t do:
1) Diversification won’t improve your returns. Diversification isn’t a way to make more money. It certainly won’t make you rich, and there’s no guarantee that it will provide a better return than a non-diversified portfolio.
2) It doesn’t eliminate risk. There is so much discussion in financial literature about the ways diversification can reduce risk that many novice investors make the leap to assuming that it eliminates risk altogether. This isn’t the case – if you own investments whose principal can decline in value, you’re taking on the risk of loss no matter how well-diversified the portfolio.
Instead, the goal of diversification is to reduce the risks associated with “putting all of your eggs in one basket.” The idea is that not all asset classes move in the same direction, with the same magnitude, at the same time. In this way, investors can – but aren’t guaranteed to - experience a smoother ride in terms of the volatility of their overall portfolio.
A classic example is the combination of stocks and government securities (MGS). While it doesn’t always work this cleanly in real life, stocks typically respond well to an environment of improving economic growth, while Treasury bonds do not. Conversely, slower economic conditions typically lead to stronger performance for government bonds (find out why here), but it can be less favorable for stocks. By combining the two asset classes, the investor ideally creates an all-weather portfolio where one asset should be in a position to perform well under all economic conditions.
The investor may not earn as high of a total return from the combined portfolio by being invested entirely in stocks, but he or she would also have had the benefit of lower day-to-day volatility. In order to gain the full benefit of diversification, investors need to make sure that their portfolios are diversified by the type, rather than the number, of investments.
Unfortunately, many individuals take the approach that “more is better” when it comes to diversification. In other words, the more funds you own, the more effectively you have diversified your portfolio.
In reality, that isn’t the case at all. Consider an investor who purchases six blue chip stock funds, but with four that focus on large companies. Even if there are slight differences among the various funds, there is probably a high degree of overlap in the individual holdings. More important, all of those funds will exhibit very similar performance characteristics – meaning that when the market goes down, all of these funds are likely to fall by the same amount. As a result, it’s essential to choose investments that provide actual diversification and not just the illusion. When buying a new fund, an investor should ask his or herself:
Benefits of investing in a Global mutual fund?
As an investor, you would like to get maximum returns on your investments, but you may not have the time to continuously study the stock market to keep track of them. You need a lot of time and knowledge to decide what to buy or when to sell. A lot of people take a chance and speculate, some get lucky, most don t. This is where mutual funds come in. Mutual funds offer you the following advantages :
Professional management. Qualified professionals manage your money, but they are not alone. They have a research team that continuously analyses the performance and prospects of companies. They also select suitable investments to achieve the objectives of the scheme. It is a continuous process that takes time and expertise which will add value to your investment. Fund managers are in a better position to manage your investments and get higher returns.
Diversification. The cliché, "don't put all your eggs in one basket" really applies to the concept of intelligent investing. Diversification lowers your risk of loss by spreading your money across various industries and geographic regions. It is a rare occasion when all stocks decline at the same time and in the same proportion. Sector funds spread your investment across only one industry so they are less diversified and therefore generally more volatile.
More choice. Mutual funds offer a variety of schemes that will suit your needs over a lifetime. When you enter a new stage in your life, all you need to do is sit down with your financial advisor who will help you to rearrange your portfolio to suit your altered lifestyle.
Affordability. As a small investor, you may find that it is not possible to buy shares of larger corporations. Mutual funds generally buy and sell securities in large volumes which allow investors to benefit from lower trading costs. The smallest investor can get started on mutual funds because of the minimal investment requirements. You can invest with a minimum of RM1,000 for local and RM50,000 for global in a Systematic Investment Plan on a regular basis.
Tax benefits. Investments held by investors for a period of 12 months or more qualify for capital gains and will be taxed accordingly. These investments also get the benefit of indexation.
Liquidity. With open-end funds, you can redeem all or part of your investment any time you wish and receive the current value of the shares. Funds are more liquid than most investments in shares, deposits and bonds. Moreover, the process is standardised, making it quick and efficient so that you can get your cash in hand as soon as possible.
Dollar-cost averaging. With rupee-cost averaging, you invest a specific rupee amount at regular intervals regardless of the investment's unit price. As a result, your money buys more units when the price is low and fewer units when the price is high, which can mean a lower average cost per unit over time. Dollar-cost averaging allows you to discipline yourself by investing every month or quarter rather than making sporadic investments.
Transparency. The performance of a mutual fund is reviewed by various publications and rating agencies, making it easy for investors to compare fund to another. As a unitholder, you are provided with regular updates, for example daily NAVs, as well as information on the fund's holdings and the fund manager's strategy.
Regulations. All mutual funds are required to register with SC (Securities Exchange Board). They are obliged to follow strict regulations designed to protect investors. All operations are also regularly monitored by the SC.
The Bottom Line
Don’t make assumptions about diversification – while you think you may diversified, that might not be the case in reality. Always take a closer look to make sure your investments are meeting your objectives as intended.
In conjunction with our 25th Anniversary, we are pleased to inform that the Management has agreed to reduce the initial investment for Phillip Managed Fund (formerly known as Managed UT) and Phillip Managed Fund Global (formerly known as DWrap UTe) from RM50,000 to RM25,000. This promotion is valid from 1st March 2015 until 30th April 2015.
Enclosed herewith please find our quarterly report on both Phillip Managed Fund and Phillip Managed Fund Global for your perusal and read the past performances ( read below )
1. Phillip Private Managed Account for Local Mutual Funds.
2. Phillip Private Managed Account for Global Mutual Funds.
Disclaimer: The information on this site is provided for discussion purposes only, and should not be construed as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities. Be sure to consult investment and tax professionals before you invest.