I wish to start this wonderful year by sharing a valuable point in maximizing returns from your current Unit trust investment scheme. Many unit holders do not see or aware of this opportunity that will come and go quietly. Some even will lament of the opportunity lost generated from their lack of enthusiasm shown in this scheme. Preoccupation of negative attitude and understanding also contributes to losing the precious opportunity to optimize return. Who is to shoulder this grievances? Will time wait for those ignorant investors to move on their own pace to materialize this chances? Really?
There are 3 steps that i lay out in order to be fully understand to become a learned investor pertaining to this topic. This integrated steps, once learned and practiced can bring accelerated positive return to your unit trust portfolio.
The 3 steps are:
Step 1: What are the opportunities?
Step 2: When will the opportunities appear?
Step 3: Channels of the opportunity source
STEP 1:
I have written below some of the opportunities that will come in the investors pathway, and if it comes they better grab them!
Opportunity #1: Look for funds that have declared above average dividend returns in the past. Identify the funds and PURCHASE this funds few weeks before its financial year end.
Opportunity #2: Look for funds that have recently declared dividend for the previous financial year end. If this funds falls under your risk profile, PURCHASE them as the Net Asset Value (NAV) of the fund is confirm lower than your cost per unit!
Opportunity #3: Since equity type funds are volatile in nature, investors are bound to see high and low net asset value from time to time. In the declining market condition, prices of funds may drop and if it drops below the holding cost per unit, this is an opportunity to PURCHASE! So, look for low fund prices, buy low and sell high!
Opportunity #4: As it is in no.3 above, investors also need to look for new fund launch. Usually new fund launch carries a very low net asset value. Some funds also will be launched with a lower than normal sales charges within the sales promotion period. Study the funds and if it is within your risk profile parameter, grab it!
STEP 2 :
In Opportunity #1, in step 1 above, this opportunity will come prior to the respective funds' financial year end. Get the list of funds' financial year list and observe them.
In Opportunity #2, in step 1 above, this opportunity will come just after the funds' financial year end. Usually trading managers will average out the last 3 to 5 days net asset value (NAV) of the fund and then will subtract off the dividend in sen from this averaged price. As a result the price or NAV after dividend declaration will be obviously low!
In Opportunity #3, this opportunity will come during the market declination stage. Market decline is not the same as market collapse stage. Investors are not to seek opportunity during the collapse stage.
In market declination stage, due to various systematic and unsystematic inherent risks, prices may go down in pursuit of higher growth in future. Grab the opportunity when the price is lower than your holding cost per unit.
In Opportunity #4, in all fund launches, selling price is usually very low. Briefly, fund will be launched in preparation of any impending changes in sectors of economy. Such perspective is taken into consideration that the sectors in relation will contribute and drive the growth of Gross Domestic Products (GDP).
STEP 3:
Learned investors have the knowledge and skills needed to capture opportunities mentioned above. However, time is a major factor that hinders them to act. This is very true to the budding investors who finds very less time to allocate into this aspect. Alternatively, investors can engage efficient unit trust consultants to manage their funds. Unit Trust Consultants are educated and equipped with the necessary tools to do manage client's asset. Seek their assistance should you have limited time managing funds.
Happy Investing!
