A week after...

Today is 13 August, exactly a week after Utusan Mingguan brought up the first news about the EPF investment's HUGE losses in UT. Federation of Malaysian UT Managers met up with EPF and interestingly, those who claimed about the losses cannot give valid proof .

So.... now business as usual.... If the investors really understand that UT investment is for middle to long term... and they are with the right fund managers... i'allah, they will be at the safe side.

To think positively, now MORE and more people know / aware about Unit trust and the EPF investment scheme and please get ready to get more and more applications for this sort of investment, EPF! :-)

Of course there will be some risks.. any investment will face certain degree of risks...

Let me share with you now.. 6 ways to turn savings into investment

SAVING ACCOUNTS
PRO

• Easy to open and maintain
• Minimum requirements, very reasonable
• Relatively low interest rate
  

CONS

• Ease of cash withdrawal can distrupt your savings programme
• Relatively low interest rate
  

FIXED DEPOSIT
PROS

• Higher interest rate than saving account
• Withdrawal less flexible
• Money cannot be spent on impulse purchases

CONS

• Money cannot end up with a confusing mass of FDs and lose control over all the pieces of paper and the money they represent.
  

LIFE INSURANCE
PROS

• A useful savings-cum-protection vehicle
• As many policies have a penalty for premature break, it acts as a mechanism to promote saving
• Proven as an effective 'forced savings" plan
  

CONS

• Relatively low returns compared with other long term investment vehicles
• Lack of flexibility
  

PROPERTY
PROS

• A good 'forced savings' plan
• A good hedge against inflation
• Can bring good returns in 'boom' economy
  

CONS

• As a starting point for savings, it is difficult: high 'start-up' down payment and you must qualify for a bank loan
• Long term inflexible mortgage repayment scheme
• Not readily converted to cash

UNIT TRUST
PROS

• The perfect investment vehichle for regular savers
• Starting amounts are not as small for savings accounts, but are reasonable
• Investment are easy to build up on a regular basis
• Benefit derived from Dollar-Cost-Averaging
• Unit Trust gives a well balanced investment portfolio that you do not need to manage yourself
• You can sell your shares when the price is right at any time (advice to liquidate once has reace the objective of investment.
  

CONS

• Affected by ups and downs of share market.

SHARE MARKET

PROS

• More exciting than operating a current account
• Can bring speculator returns when timing is right
  

CONS

• You need a lump sum to get into the share market
• Not for the regular saver investing a couple of hundred ringgit per month
• You need vast amounts of market information and luck in order to manage your investments yourself

The higher the return, the higher the risk.

FD - Insurance - Bond [Wealth Preservation]
Bond to Property [for Wealth Management]
Unit Trust - Shares [Wealth Accummulation

hope you've learn something new today. Feel free to email me if you have futher question(s)