to come in to invest in Unit Trust Investment scheme.
1. No specific time horizon!
Congratulation for making the first step to invest! Despite having the resource i.e. the
money, you should also know how long you wish to put your money in this investment.
Example: 5 years?, 8 years? or 10 years?, et cetra. If you plan to invest for just 2 years and
below, i advise you better not! You can better park that money as an emegency fund
elsewhere or use the amount to pay all your credit card balances.
When you have decided your investment horizon, the next step is to determine how much
money you would like to collect at the end of your investment period. Eg. RM 50000 or
RM 100000, et cetra, et cetra. Examples of target amount can be such as 'I need
RM 80000 for my child's living and tuition fees expenses' or 'I need to create a retirement
nest of RM 500000 when i retire'. About 99.99% of unit trust investors do not have such
real targeted amount to save. Believe it or not, but it's true!
Unit trust investors comes from diverse education, segment of community and social culture.
Each and single human reacts and compute decision differently based on their life experience.
Various funds also do have complexity inherent in it and it is ought to be captured and analysed
carefully. What i am trying to convey here is that some funds behave actively and some so
passively. Prior to putting money in any funds, investors should know what type of funds are
suitable with their own inner-self that life experience had taught them to be what they are now.
In simplicity, investors should know their own investment risk profile. If an investor is an
aggressive type who can accept current short term volatility for the benefit of hoping to reap high
return in the long term, we consultants always avoid choosing income/bond type funds.
The first two (2) items above are enshrined as the OBJECTIVE OF INVESTMENT. You
simply cannot tell your consultants that the reason of your investment is 'I am investing
because i want more money'. The combination of (1) and (2) above will reflect something
like this. 'I want to invest in unit trust because i plan to send my daughter to further studies
and to my knowledge, it will cost RM 80000 in today's money. I plan to have that money in
10 years time.
Can you see the difference? Objectives should clearly indicate how much you want and by when
you need it. Discovering your investment risk profile comes later. If you know all 3 above,
you can now see your consultant/agent to begin the process of investment.
But wait!! Do you know how to determine (1) and (2) and (3) above??
I am sure most of you all know already but to other few who are in the dark, you may ask
around or else send in your request to vjdevan@streamyx.com and i will guide you. No obligation and
no fees are charged for this, at all!
