CONSOLIDATED INVESTMENT PORTFOLIO - PART 2 FINAL

This article is a continuation from yesterday's posted article. Please read it first before jumping back in here.

You now have a consolidated portfolio that promises to generate 6.28% in return. You should on timely manner conduct 'check and balance' steps against the actual value of the whole investment. The primary reason for such activity is to maintain the expected return to around 6.28%.
What good a consolidated portfolio will do?
Before i make an attempt to answer that, allow me to put forward this questions. Have you asked yourself just how much money you need for your retirement fund? Have you asked your self just how much money you need to save for your children's tertiary education expenses? If not, i suggest you to start crunching some mathematical figures and find out what the amount will be. If you are unsure how to crunch the numbers, i would be glad to assist you with no obligation at all. (Please put in your questions in the comment box below this article and i will reply back)

Say, for the purpose of this article, let's assume that you knew just how much fund you need during retirement and to achieve that retirement fund you need to save (from now on) in a saving or investment scheme that MUST generate about 7.00% annually (assumption only, and i strongly recommend you to run through your very own retirement fund analysis).

If your current investment portfolio, such as the one we constructed earlier can only produce you 6.28%, you ought to do something about it because if you ignore, you will find out too late that the money in your retirement fund would have outlived your retirement life and this will create financial liabilities to you during the golden years.

So, in one hand your retirement fund analysis demands you to save 7.00% annually but your current portfolio dispproves with a dismal 6.28%. What do you do? You need to look back at scenario A table in the previous article. Try transferring some of the assets (investment products) from one row to another, top-down or bottom-up. After transferring, you need to pay close attention to the final WERP number. This WERP figure changes as you transfer the assets. For a brief illustration, i have generated a table (Please see scenario B). In that table, i have mobillized RM 50000 from shares and RM 10000 from unit trust assets and parked it together with my savings balance. This strategy is not a productive move because the WERP now changed to 5.46% but surely we can do better shuffling than this!!

Try playing around by transferring the assets in various way and find out which will give you a WERP of 7.00% ( assuming you need to save at this rate for your retirement fund). In scenario C, the table shows that after transferring my Fixed Deposit money, my shares and my savings account balance all into unit trust investment, my WERP now changes to 7.63%.

Looks like scenario C table fits into my expectation! It's like playing a game of Jigsaw puzzle to find the best fit, tailored to my interest. Now, that you already know the purpose of a good consolidated investment portfolio, why don't you start to create one for yourself?