I received his email asking for advice:
I hope you find yourself in a good health today.
I am attracted to one of your post regarding opening Fundsupermart account.
So i have signup the personal account and now is waiting for the password to be sent.
They have call me for verification.
Since i am still new with unit trust, and am just starting to invest in it, i would consider myself a moderate risk investor.
Based on the FSM fund recommendation fund, i am quite interested to invest in OSK-UOB growth and income focus trust. I believe that small to medium companies in Malaysia has big potential for growth since the economy now is stabilizing.
Beside that that, the minimum required investment using cash is only Rm200 and additional investment is also RM200, which is i think affordable to me.
What do you think of my choice?
Do you think that this fund has potential for investment?
I really hope you can give me some tips and advice on how to select a fund based on our financial situation.
Lastly, hope you will be the best in what you do.
I hope you can advice and help in my financial situation.
Thank you and regards,
When it comes to investment, it is more important to have the proper mindset rather than the external factor of choosing which fund that’s more likely to perform above average.
When we invest in unit trust, the main function is to leave the stock-picking process to the professional fund managers. Since they are paid for doing exactly that full time, we do expect that they are going to give their best. Those are not within our control.
Then if we look from our own prospective, we invest in unit trust because
- we want peace of mind
- we want to invest passively without much hassle
- we want better return that hopefully will expedite the realization of our financial goals.
So the basic strategy that hardly goes wrong is:
- construct a portfolio of fund which suits our needs and risk tolerance. The portfolio can be a combination of 3-5 funds, but not too many because it is against our purpose of “invest passively without much hassle”. When too many funds are involved, the process get more complicated to manage.
- do fixed and regular investment. This is about applying the dollar cost averaging strategy. You will definitely win in the long run.
- re-balancing whenever needed. When your portfolio is too much out of balance, do some switching to lock gain and buy low. The easier way is to do this every three quarter or twice a year, or simply when there are major movements on the market.
When you have the right mindset and apply the above strategy, and choose the funds within the recommendation of FSM, you will be doing fine.