Ahad, Februari 27, 2011

Duit, Duit, Duit..

Duit, Duit, Duit. Bukan Dunia Pelajar
KUALA LUMPUR: Mahasiswa universiti Zana (bukan nama sebenar) memutuskan untuk menceburi perniagaan jualan langsung setelah menghadiri ceramah tentang 'bagaimana menjana keuntungan beribu Ringgit sebulan'.
Zana begitu teruja dengan 'persembahan' pelan pemasaran yang disampaikan oleh penceramah itu yang memberikan gambaran tentang betapa senangnya untuk menjana pendapatan yang besar dengan menjual alat kelengkapan rumah.
"Anda boleh menjadi majikan anda sendiri dan mendapat pulangan lumayan dengan menjual produk serta mendapat komisyen dengan mempelawa ahli baru untuk menyertai perniagaan ini," seorang penceramah memberitahu mereka yang hadir pada sesi ceramah itu.
Tetapi Zana tidak mempunyai sumber kewangan yang mencukupi untuk memulakan perniagaan itu. Keluarganya tidak begitu menggalakkan kerana Zana masih belajar dan enggan memberikan wang modal.
Zana memutuskan untuk menggunakan wang Pinjaman Tabung Pelajaran Tinggi Nasional (PTPTN) untuk dibuat modal.
Tetapi malangnya setelah beberapa bulan dalam perniagaan jualan langsung itu dan terpaksa membahagi masa antara pelajaran dan dunia perniagaan, Zana mendapati pendapatan daripada perniagaannya bukanlah sesuatu yang senang untuk dicapai.
"Saya berjaya menjual hanya beberapa produk. Akhirnya saya mengalami kerugian yang besar. Tetapi apa yang lebih memeningkan ialah saya menghabiskan wang pinjaman PTPTN untuk itu," kata Zana kepada penulis.
Zana menyesal tindakannya memasuki dunia perniagaan langsung ketika masih belajar 'tidak menjadi' dan daia terpaksa mencari sumber kewangan yang lain untuk menampung kos pelajarannya.
JUALAN LANGSUNG
"Adalah tidak berapa bijak bagi pelajar universiti menceburi bidang perniagaan kerana mereka sepatutnya fokus terhadap pelajaran. Bukannya senang nak dapat tempat di universiti, jadi mereka sepatutnya menggunakan peluang yang diberi dengan baik dan bukan menyalah guna wang PTPTN", kata aktivis sosial dan pengguna Fatimah Mansur bila ditanya tentang dilema yang dihadapi Zana.
Fatimah berkata penjual langsung mestilah seorang yang mempunyai kesabaran dan tahu bagaimana caranya mendekati pelanggan selain mempunyai masa untuk berbuat demikian.
"Itulah sebabnya tidak berapa bijak bagi pelajar menceburi bidang perniagaan kerana ini akan memberi impak terhadap pelajaran kerana penjual langsung perlu memberikan penerangan serta membuat demonstrasi tentang produk yang mereka jual", katanya.
Penjual langsung bebas seperti Zana beroperasi bagi pihak diri sendiri atau bagi pihak syarikat, menjual produk dan perkhidmatan melalui jalinan jualan peribadi.
UNTUNG, RUGI
Penjual langsung berpeluang mencapai keuntungan yang lumayan daripada perniagaan mereka tetapi mereka juga mesti bertanggungjawab terhadap risiko yang bersangkut-paut dengan perniagaan seperti ini.
Ini bermakna mereka juga boleh menanggung kerugian besar, terang seorang lagi aktivis pengguna dan sosial, Gurmukh Singh.
"Jadi mereka juga boleh buat duit dan pada waktu yang sama boleh menanggung kerugian yang kadang kala agak besar," katanya.
Antara barang dalam bidang jualan langsung termasuk produk kosmetik dan penjagaan kulit, penjagaan peribadi dan pencuci, penyedut hampagas, produk makanan serta nutrisi, barang rumah serta pembersihan rumah, barang mainan, buku dan produk pembelajaran selain pakaian, barang kemas serta aksesori fesyen.
KERJA KERAS, MOTIVASI
Kata Gurmukh Singh lagi, bidang jualan langsung memerlukan kesabaran, masa, motivasi dan kesungguhan untuk mencapai kejayaan.
"Kalau tiada elemen-elemen ini, kemungkinan besar perniagaan itu akan gagal. Wang tidak akan begitu mudah masuk ke pangkuan anda. Kejayaan tidak berlaku dengan sekelip mata.
"Tetapi ada yang begitu mempercayai yang mereka dapat menguasai perniagaan seperti ini dan wang dengan mudah akan mencurah masuk. Sebenarnya bukan mudah seperti yang mereka sangkakan. Ia mungkin boleh membinasakan (diri)".
Kata beliau penjual langsung terpaksa bekerja keras untuk mencapai kejayaan.
"Ini bermakna meluangkan masa yang banyak setiap hari bagi mempromosi apa yang mahu dijual, serta sentiasa memberitahu apa yang terkini kepada pelanggan. Selain dari itu anda hendaklah sentiasa fokus dan mempunyai motivasi", kata Gurmukh Singh.
Tegas beliau, halangan yang paling besar dalam perniagaan jualan langsung ialah hilang minat serta motivasi.
"Jika hilang minat, kemungkinan besar perniagaan jualan langsung anda tidak akan berjaya," katanya.
Seorang pegawai PTPTN mempunyai nasihat ini kepada pelajar universiti: "Duit PTPTN sebenarnya untuk pelajar menampung yuran universiti dan tidak boleh digunakan untuk tujuan lain.
"Jika pelajar didapati menyalah guna wang itu, mereka menghadapi risiko pinjaman di tarik balik," katanya. - BERNAMA

Khamis, Februari 17, 2011

Money Men

Three newcomers in rich list

2011/02/17
By Suganthi Suparmaniam
suganthi@nst.com.my



Money men
Money men
KUALA LUMPUR: Business Times CEO of the Year 2010 Datuk Seri Stanley Thai has made it into the list of Malaysia's 40 richest individuals, a Malaysian Business survey reveals. The magazine, in its Feb 16 issue, listed Thai, of Supermax Corporation Bhd, as a newcomer to the group, together with Tan Sri Leong Hoy Kum of Mah Sing Group Bhd and Datuk Tan Heng Chew of Tan Chong Holdings Bhd.

The magazine said the combined wealth of Malaysia's 40 richest tycoons has risen by more than 30 per cent, spurred by the bullish stock market and an expanding economy.

They were worth RM206.27 billion as at Jan 21, compared with RM156.7 billion a year ago.
It says there are more billionaires this year -- 27 of them, an increase of five from last year.

Robert Kuok, who returned to the sugar business last year, still tops the list at RM50.04 billion and telecommunications tycoon T. Ananda Krishnan remains in second place with RM45.78 billion.

Public Bank's Tan Sri Teh Hong Piow moved to the third place with a fortune estimated at RM12.77 billion while fourth is IOI Corporation Bhd's Tan Sri Lee Shin Cheng who is worth RM12.74 billion.

Genting Group's Tan Sri Lim Kok Thay, unchanged at No. 5, has RM10.89 billion while Hong Leong Group's Tan Sri Quek Leng Chan takes the sixth spot with RM10.75 billion, up from RM7.09 billion previously.

In seventh place is Tan Sri Syed Mokhtar Albukhary of the Albukhary Foundation, whose flagship is the DRB-Hicom Group. He is valued at RM8.84 billion.

Tan Sri Lim Goh Tong's widow, Puan Sri Lee Kim Hua, unchanged at number eight, has RM7.43 billion while Tan Sri Tiong Hiew King of the Rimbunan Hijau Group returns at No. 9 with RM4.77 billion.

Singapore-domiciled Ong Beng Seng claims the 10th spot, with his wealth doubled to RM3.98 billion, going past Berjaya Group's Tan Sri Vincent Tan who drops two rungs to No. 12.

Former prime minister Tun Dr Mahathir Mohamad's son, Datuk Mokhzani Mahathir, of Kencana Petroleum, is ranked 19th with RM1.665 billion.


2bz4money: How they make money?  Heritage? Luck? Sweat? Political Connection? Knowledge?


Rabu, Februari 16, 2011

Getting Started as a Financial Planner

Ulasan Buku: 
Getting Started as a Financial Planner, Revised and Updated Edition
by Jeffrey H. Rattiner 
Bloomberg © 2005 (366 pages) 
ISBN:9781576601853

Use this logical business guide's tools and techniques to break into the lucrative financial planning field. Learn to build a solid business plan, market your practice, manage and communicate with clients, and more.

2bz4money:  Buku ini menerangkan selok belok kerjaya dan tips sebagai Perancang Kewangan.

Ahad, Februari 13, 2011

Money: Hedging against inflation

2011/02/12 Yap Ming Hui


single
WHAT is inflation? In the economic field, it is defined as persistent and consistent increase in general prices over a period of time.
In layman’s term, it means the prices of goods and services go up and never come down.

Based on the Government’s statistics, our Consumer Price Index (CPI) is about two per cent. But most of us experience a higher inflation rate as we consume a lot of items that are not counted in the CPI.

Two weeks before Chinese New Year, I met someone in a kopitiam who told me the coffee that used to cost RM1 a cup three years ago was now RM1.30. That’s 30 per cent increase in three years, which is equivalent to 10 per cent per annum.

Though not every item has a price increase of 10 per annum, I personally estimate the inflation rate to be about four to six per cent.

Case study
Michael is 50 years old. He used to own and manage a successful chemical material distribution company.
Last year, he sold his company to a multi-national for RM3 million and retired.
Due to previous bad experiences in stock market investments, he decided to put all his money into fixed deposits instead and earn the interest. He believes he can live on the interest alone and eventually, leave the principal sum of RM3 million to his children when he dies.
Based on his calculation, the interest he will get should be about RM120,000 (RM3 million x four per cent annual interest rate).
Therefore, he believes he can maintain his living standards with RM120,000 per year for as long as he wants.
Do you agree with his plan? Is there any problem with it?

The problem
Michael’s retirement plan is a typical example of how one manages money without considering the impact of inflation. In Michael’s plan, inflation is non-existent. He presumes that the RM120,000 generated by his fixed deposit interest will continue to be worth RM120,000 in 10 years time. He also presumes that his RM3 million will continue to be worth the same 10 years later.
Here’s a very simple example to illustrate the impact of inflation, using a six per cent average increase in the cost of living (inflation) and four per cent annual investment return.

Let’s look at the middle column first. Note that if we start with a capital of RM3m and an average six per cent inflation, it takes only 12 years for the capital sum to decline by 50 per cent. In other words, if you took RM3m, buried it in your garden and dug it up 12 years later — assuming the average inflation rate of six per cent during the 12 years — your money would be worth only half as much as when you buried it.

And every 12 years thereafter, its value would further reduce in half.
So here is the first negative impact of inflation — it destroys capital.
If Michael dies at 86, he will leave his children with a wealth worth of RM375,000 instead of RM3,000,000 that he has originally planned.

In money management, accumulating capital is only an intermediate step. The end game of this is to provide us income at some point in our lives.

Ultimately, we all want to replace our working income with investment income. The only difference is when we want to start receiving that income.

Some people want it right away (like Michael) because they are already retired.
Others won’t need it for 10, 20 or 30 years. So, if generating income from your investment is your ultimate goal, let’s look at the impact of six per cent inflation to your investment income over time (third column).

In Michael’s example, a four per cent return on RM3,000,000 will yield RM120,000 annually. But at a six per cent inflation rate, the purchasing power of that income in 12 years will buy only half of what it can today.

In other words, if you can buy a cup of coffee at RM1.30 today, it will cost you RM2.60 12 years later.

By the time Michael reaches 74, the purchasing power would be cut in half once more. If Michael lives to age 86, he will need to get by on one-eight of the purchasing power with which he had retired.

Inflation is a serious problem and although its severity goes up and down, it never disappears completely.

In fact, in the long run, loss of purchasing power is the greatest investment risk we face.

Effective solutions
1. Understand the impact of inflation. Change your paradigm. Recognise inflation and understand the damage it can do to your created wealth.

2. Cut down expenses and spending. Plan your shopping and buy only what you need. If possible, time your purchases. Buy more items at sales. You will enjoy easily 20 to 50 per cent saving. To further cut down your expenses, eat at home. That will save you another few hundred ringgit every month.

3. Minimise your cash holding. Your money is shrinking in the bank every day. If inflation is at six per cent and your bank interest rate is four per cent, your actual investment return is -2 per cent per year. So, I would suggest that you hold cash only for emergency purpose. If you are working, hold emergency cash equivalent to six months of living expenses. If you are retired, hold emergency cash equivalent to three years of living expenses.

4. Invest the extra cash to hedge against inflation. Once you have set aside your emergency cash, you can afford to invest the rest in longer-term investments that will hedge against inflation such as:

• Equities: Effectively-run businesses normally can pass whatever price increases to their customers. As a result, profits will increase and share prices will grow accordingly in the long run.

• Property: The price of properties will also grow due to the rising land prices and rising building material prices. Investing extra cash on selected properties will help you to hedge against inflation and make some extra investment return.

• Unit trust: If you are a new investor with a small cash outlay, unit trust investment may be right for you. But not every unit trust fund can effectively ride on inflation. Therefore, choose equities funds only or at least balanced funds. Avoid fixed income or money market funds because they may not outgrow the inflation rate in the long run.

2bz4money:  I've succesfully followed this advise..

Rabu, Februari 09, 2011

Padah hutang MARA

Oleh Nazura Ngah dan Betty Subaryati

2011/02/09 BHOnline

MOHD ASRAF menunjukkan surat daripada MARA  yang menolak  permohonan pinjaman pelajarannya.
MOHD ASRAF menunjukkan surat daripada MARA yang menolak permohonan pinjaman pelajarannya.

KOTA BHARU: Nasib seorang penuntut Universiti Kuala Lumpur (UNIKL) terumbang-ambing apabila tidak dapat meneruskan pengajian pada semester dua yang sepatutnya bermula 14 Januari lalu, apabila keputusan peperiksaannya digantung kerana bapanya pernah berhutang dengan MARA.

Mohd Asraf Samsudin, 22, tidak dibenar meneruskan pengajian Diploma Kejuruteraan Mekanikal dan Pembangunan walaupun memperoleh Gred Purata Kumulatif (CGPA) 3.45.
“Saya memulakan pengajian di kampus Kulim, Kedah dan UNIKL memberi jaminan mendapat kemudahan pinjaman MARA sebelum permohonan itu diluluskan.
“Sementara menunggu pinjaman MARA kira-kira RM40,000, saya mengikuti kelas di UNIKL seperti biasa bersama ratusan pelajar lain. Bagaimanapun, pada akhir semester pertama itu, saya menerima surat daripada UNIKL berhubung keputusan peperiksaan saya digantung.

“Saya dan pelajar lain yang turut menerima nasib sama, kini tidak tahu mahu mengadu kepada siapa walaupun sebelum ini sudah membuat rayuan kepada Biro Pengaduan Awam SUHAKAM, Kementerian Pengajian Tinggi bahagian swasta selain MARA,” katanya kepada Berita Harian di sini, baru-baru ini.

Sementara itu, bapa Mohd Asraf, Samsudin Abdul Rahman berkata, MARA menemui anaknya Khamis ini bagi membincangkan masalah berkenaan.

Di KUALA LUMPUR: Pengarah Bahagian Hal Ehwal Korporat MARA, Hasni Suleiman, berdasarkan semakan, bapa Mohd Asraf disenaraihitamkan selaku peminjam pelajaran dan pembiayaan perniagaan.

2bz4money: Bapa berhutang, anak jadi mangsa..

Along punca saya meringkuk dijel

Oleh Mohd Helmi Irwadi Mohd Nor

2011/02/09 BHOnline

Rompak kedai emas untuk lunas hutang

POKOK SENA: “Jangan berhutang dengan along kerana along saya merana dan terpaksa merengkuk dalam penjara sepanjang hayat,” kata seorang banduan di Penjara Pokok Sena, di sini yang hanya dikenali sebagai Wee, berusia 40-an.

Dia dijatuhi hukuman penjara seumur hidup oleh mahkamah kerana melakukan kesalahan samun bersenjata api di sebuah kedai emas di Kuala Sanglang, Jitra pada Oktober 1999 bagi mencari wang untuk membayar hutang along.
Wee yang sudah 12 tahun merengkuk dalam penjara berkata, ketika itu dia amat tertekan berikutan sering diganggu along selepas gagal melunaskan hutang RM40,000 pada 1999, malah faedahnya semakin bertambah menjadikan jumlah yang perlu dibayar meningkat kepada RM70,000.
“Saya tertekan kerana along sering mengganggu saya dan keluarga membuatkan saya mengambil jalan mudah menyamun sebuah kedai emas di Kuala Sanglang, semata-mata untuk melunaskan hutang.

“Ketika itu saya tidak berfikir panjang hanya kerana mahu menyelesaikan masalah dengan along, tetapi nasib saya menjadi lebih buruk apabila terpaksa merengkuk dalam penjara seumur hidup,” katanya yang berasal dari Perlis ketika ditemui pada majlis perjumpaan dengan keluarga sempena Tahun Baru Cina di Penjara Pokok Sena, di sini, semalam.

Dia melakukan samun itu bersendirian dan melarikan sejumlah emas yang dianggarkan bernilai lebih RM200,000.

Wee berkata, nasib tidak menyebelahinya kerana selepas tiga hari melakukan jenayah samun itu, dia ditahan sepasukan anggota polis yang datang ke rumahnya. Dia yang menyesali perbuatannya itu berkata, kini tiada apa lagi yang dapat mengubah hidupnya untuk keluar daripada penjara melainkan pengampunan daripada Yang Di-Pertuan Agong ataupun memenangi kes rayuan.

“Saya berharap kejadian yang menimpa saya ini dapat dijadikan iktibar oleh orang di luar sana supaya tidak meminjam daripada along.

“Akibat terdesak untuk membayar hutang along saya melakukan jenayah. Bayangkan bagaimana kehidupan saya yang terpaksa menghabiskan sepanjang hayat dalam penjara ini, hanya disebabkan Ah Long,” katanya.

Mr Asia's house goes up in flames

Mr Asia's house goes up in flames

2011/02/09 NSTonline

KUCHING: He used to flex his muscles for national glory. But yesterday, he used his muscle to save his three grandchildren when his 47-year-old wooden house was burnt down during an afternoon blaze. Former Mr Asia, Bujang Taha, was made homeless in the 2.30pm incident. The 74-year-old Bujang and his wife, Nor Sarah Harun, 86, were taking care of their grandchildren, aged between 7 and 11, when he saw sparks coming from the wiring of his house.

"We could only save ourselves. Everything was lost in the fire," said Bujang yesterday.

During his prime, he made the country proud by winning four Mr Asia titles in 1980, 1982, 1983 and 1986.
He also won two SEA Games gold medals in Kuala Lumpur in 1977 and in Jakarta in 1979 in the bantamweight category.

Bujang also qualified for the Mr Universe challenge in 1982 in Belgium.

"All my medals and my past glories are in ashes now. I am really sad for my losses.

"Even my son's earnings of RM27,000 from his kuih sales is gone. But at least we all survived."

Two fire engines from Padungan and Petra Jaya stations were despatched to the scene. However, they could not save the house.

2bz4money: So, where really to keep your money? Bank or turn it to gold..

Ahad, Februari 06, 2011

Where to put your money

Saturday February 5, 2011

By CECILIA KOK

CONVENTIONAL
REAL ESTATE
REAL estate investment is popular because it is often thought of as an effective hedge against inflation. The perception is that property values are almost guaranteed to appreciate as inflation rises.
When it comes to real estate investment, it is always about location, location and location. And of course, timing and quality or type of asset also play an important role in determining the rate of return on this investment.
In Malaysia, investors have several options. One is through direct investment in physical assets, such as land or residential and commercial units. But this option will most likely require investors to come up with a huge capital expenditure.
Nevertheless, to CTLA Financial Planners Sdn Bhd managing director Mike Lee, it is just a leverage game.
“You pay only 10%, and borrow the rest,” he explains, adding that as long as interest rates remain low, the incentive to borrow and buy will be there.
Return on direct investment in physical assets can be in the form of a steady stream of net rental income, or substantial capital gains upon disposal.
But as property prices have risen tremendously over the last one year, especially in certain parts of the Klang Valley, licensed financial adviser Jeremy Tan of Standard Financial Planner Sdn Bhd (FP) says, “a detailed study is recommended before investing in one.”
Another more affordable option is real estate investment trust (REIT).
“The initial capital outlay of investing in REITs is low, with minimum required investment of around RM1,000, compared with buying a piece of property, which can cost up to 10% to 30% of the value of the asset.
“And there's no need of mortgage financing,” explains Tan. REITs are traded like an equity in the local stock market, and allow investors to participate in investment in high-profile, high-value properties for better returns.
Investors will gain through attractive dividend yields, currently averaging at around 7.5%, which seem more attractive compared with fixed deposits. By CECILIA KOK
FIXED DEPOSITS
IN an environment of low interest rates and rising inflation, is it still wise to keep money in fixed deposits (FDs)? Certainly, according to financial experts.
“As part of portfolio diversification, placement of funds in FDs is still mandatory. This asset class should comprise of contingency funds that can be easily accessible in financial emergencies,” SFP's Tan explains.
“As a rule of thumb, one should keep aside at least three to six months of one's income in this asset class. Apart from that, it is not advisable to place any excess funds in FDs, as the yield is lower than the inflation rate; investors should rather look at other vehicles that pay better returns than the FD and inflation rates,” Tan adds.
In Malaysia, risk-averse devotees of FDs have always regarded the instrument as “safe,” in the sense that they will not lose their capital (in nominal terms), while at the same time enjoy some interest payments from the bank. But this is a false perception, as CTLA's Lee highlights.
“Inflation can erode the value of money. And the impact can be quite bad, especially for those who keep most of their money in FDs for a prolonged period, considering the fact that they only earn an interest income of less than 3% a year, while losing, say, 10% in purchasing power at the end of each year. Compounded forward, the value of FDs will be depleted in ringgit terms,” Lee explains.
“The prudent approach is to retain in FD what one needs for emergency and the rest should be invested wisely,” Lee explains. By CECILIA KOK
UNIT TRUST/ MUTUAL FUNDS
FINANCIAL planners are quick to point out that there is no one-strategy that fits all investors when it comes to investing in mutual funds. A mutual fund is designed to invest a pool of investors' monies in a basket of securities be it stocks, bonds or money market instruments, depending on the fund's strategy.
An investor should be mindful of his/her risk appetite and desired returns when considering the types of funds equities, fixed income or balanced to invest in, says Great Vision Advisory Group executive director Andy Tang.
Tang's recommendation for this year would be balanced funds (which comprise equities and bonds) to provide both income and modest appreciation, with an expected return of between 6% to 8%.
Meanwhile, the iFast Capital Sdn Bhd research team expects equities to outperform bonds this year and maintains its overweight recommendation for equities. iFast, which is a registered institutional unit trust adviser and distributes funds through its website Fundsupermart.com.my, says that emerging market equities funds are expected to perform well as fund inflows into these markets continue, their economic growth remains robust and valuations in these market remain attractive.
It adds that funds with exposure to North Asian markets may do better than South-East Asian markets as the latter markets saw strong performances last year and North Asian markets such as South Korea, China and Taiwan are likely to play catch up this year.
For bond fund investors, iFast suggest funds that look at the high yield and emerging market debt space which is likely to fare better than safer low-yielding global bonds. It added that investors should remain cautious on long-duration developed sovereign debt as interest rates see further increases. By JEEVA ARULAMPALAM
EQUITIES THE two driving forces behind investing in equities would be to see capital appreciation and earn income through dividend. The old adage commonly passed on to novice investors is to invest in growth stocks for capital appreciation and blue-chip companies for stable dividend income.
However, Great Vision's Tang says that since equity investments are a riskier option, investors need a strong stomach to withstand market volatility.
“An investor's risk appetite needs to be based on his/her age.
The older you are, the less risks you will want to take as your investment time frame may be shorter and you do not want to lose money.
The recommended stocks for this year would be the ones that will benefit from projects earmarked under the Economic Transformation Programme (ETP) such as infrastructure and oil and gas (O&G) stocks,” says Tang.
Some of the key infrastructure projects include the mass rapid transit, highway developments and low-cost carrier terminal projects while O&G stocks are favoured as the local service providers benefit from various incentives given and contracts to be awarded under the ETP.
CIMB Research analyst Norziana Mohd Inon maintains an overweight call on the O&G sector, as it is a major beneficiary of the ETP.
“The share prices of O&G stocks in our coverage have gained 13.7% on average year-to-date compared with 0.1% for the FBM KLCI. Our portfolio has been lifted primarily by our top pick SapuraCrest (Petroleum Bhd),” she said in a report issued on Wednesday.
Aside from O&G stocks, Deutsche Bank's Asean/Malaysia equity research head Teoh Su-Yin said in a media briefing last week that plantation stocks, companies which had diversified into the region, and property stocks were the house picks this year.
The bank's overall outlook for the local market is positive, with a target of 1,790 for the benchmark FBM KLCI by year-end. The index ended higher this week by 9.93 points to 1531.82 from a week ago. By JEEVA ARULAMPALAM
BONDS
Direct investment in the bond market in Malaysia is currently not as accessible to retail investors as it is to institutional investors and high net worth individuals.
Most retail investors' exposure to the bond market is through their investments in unit trusts, where the minimum initial investment required for bond funds is usually RM1,000, compared with the minimum amount of RM250,000 required for direct bond investment.
“While bonds are another asset class to have as part of a diversification strategy, the amount of funds to be put in this category depends on the risk appetite of investors,” SFP's Tan says.
“One has to periodically review and rebalance one's investment portfolio. In an environment of rising interest rate, it is good to par down on investment in bonds and vice-versa,” he opines.
Interest rates and bonds have an inverse relationship.
“When inflation and interest rates heat up, bond funds will lose value. Your best investment strategy here is to cut back on these funds if you have significant exposure. Favour short-term and intermediate bond funds and sell or avoid long-term funds. The latter can get hit hard when interest rates and inflation go up,” CTLA's Lee explains.
“As a fixed-income instrument, bonds are often misunderstood by the average investor who think that these instruments are safe. But returns aside, bonds do carry risks, including the risks of default, early redemption, rating downgrade and management, among others. Hence, selection of the right bond fund is important to avoid a loss. So, investors will have to be careful and seek advice from the right professionals,” he adds. By CECILIA KOK
COMMODITY
Legendary investor Jim Rogers is a big-time commodity bull. His reasoning is simple: as the global economy grows, so will demand for commodities.
Over the last one year, the world has witnessed a strong rebound in the prices of commodities, especially that of crude oil and crude palm oil. Most analysts believe the prices of these commodities would continue to rise as the global demand is expected to remain strong, while production of some of these commodities would remain tight.
This is partly due to poor weather conditions and natural disasters like flood that has affected coal production in Australia and crude palm oil in South-East Asia.
Also, the weakness of the US dollar will also contribute to the increase of commodity prices.
There are several ways that investors can ride on the commodity rally this year. These include directly buying into the shares of companies involved in businesses that handle these commodities, such as plantation companies; buying into commodity-themed mutual funds; or buying into future or options.
“Most Malaysians do not have much exposure to futures and options, but these are some good investment tools for investors looking to improve their overall rate of return from their investment portfolio,” says Oriental Pacific Futures Sdn Bhd marketing director Eunice Choo.
“The beauty of futures trading is that it is a two-way market, where one can buy (long) in a bull market or sell (short) in a bear market. This means that one can either buys first and sells later, or sells first and buys back later. You can always trade in futures products, regardless of whether it is a bull or bear market,” Choo explains.
“But futures trading is a high leverage investment, so one must always assess the risks properly before entering a trade,” she warns. By CECILIA KOK
CURRENCIES
It's widely expected that this year will see a further strengthening of Asian currencies, including that of the ringgit, against those of developed nations. The Chinese yuan, or renminbi, in particular, will remain very much in focus, as there have been hints of up to a 5% rise against the US dollar this year. In general, there are several ways that one can invest in foreign currencies, including opening a foreign currency account with financial institutions, buying assets denominated in foreign currencies, or simply trade live in the foreign exchange market.
“One's objectives of investing in foreign currencies have to be clearly defined. Some people invest in them as savings for children who will be pursuing studies overseas, while some others do it purely for investment gains,” SFP's Tan says.
“Investment in foreign currencies has its inherent risks; the appreciation and fall of a particular currency depends on the country's economic, social and political environment. It is recommended that one seek professional advice before buying into this instrument,” he adds. By CECILIA KOK
EXCHANGE-TRADED FUNDS
Exchange Traded Funds (ETFs) are open-end index tracking funds or trusts that are listed and traded on the stock exchange. An ETF tracks an index, commodity or a basket of assets like an open-end fund but trades on the exchange like a stock.
“The advantage for a retail investor buying into an ETF is that it offers diversification. The fund owns a basket of securities so if a fund tracks the FBM KLCI, you will have exposure to 30 stocks instead of just one stock,” said i-VCAP Management Sdn Bhd chief executive officer Mahdzir Othman. i-VCAP is the manager of the MyETF Dow Jones Islamic Market Malaysia Titans 25.
Mahdzir added that the performance of an ETF largely depends on its underlying benchmark. This means that ETFs, as in investing in equities, will experience market volatility and the ETF's performance will be affected by the performance of its component stocks or bonds.
Local financial companies have been slow to launch ETFs in Malaysia, with only five listed on the local stock exchange. However, there is a plethora of ETFs that retail investors can access in the global markets with ETFs making up 1.5% of total daily trading on the Singapore Exchange and some 40% of daily turnover in the United States.
Mahdzir says it is cheaper to buy into ETFs than as compared with normal mutual funds, as the former is passive fund while the latter is actively managed.
MRR Consulting investment adviser and managing partner Ooi Kok Hwa says that investors pay about a 5.5% sale charge (also known as front-end load) for normal mutual funds whereas they pay a normal brokerage fee of 0.7% for ETFs. By JEEVA ARULAMPALAM
GOLD
Investors largely regard gold as a safe-haven asset, be it in the form of purchasing gold bullion coins or gold bars. Gold is seen as an investment tool offering long-term protection against inflation and a hedge against the US currency. But as equity markets rally and investors' risk appetites grow, the appeal for precious metals such as gold, silver and platinum as an alternative investment has somewhat softened. Gold spot price was trading above US$1,300 this week. However, investment managers have taken a longer-term view that gold price is likely to remain up alongside other commodity prices and as investors look for a long-term hedge against weakness in the US dollar, euro and Japanese's yen. They have cautioned though that prices could correct if the United States starts moving in on monetary tightening measures this year.
Aside from buying physical gold in the form of coins or bars, local investors can open up investment accounts at local banks such as Public Bank, whereby investors can buy and sell gold at daily quoted prices in ringgit using a passbook. By JEEVA ARULAMPALAM
UNCONVENTIONAL
ART When it comes to investment in collectibles such as art, which include paintings, sculptures and handicrafts, luck and timing are the main determinants of the rate of return. There's no fixed rate of return, as it is a subjective matter, depending on how much the buyer is willing to pay for that particular piece of creativity.
While still at an infancy stage, art investment in Malaysia has been gaining popularity over the last 20 years. One has to note, though, that most art collectors here are in not purely for monetary gains.
But as RogueArt Sdn Bhd director Beverly Yong puts it, the “returns” on art investment are often intangible. One being the gain of aesthetic and emotional satisfaction, while knowing that one is also contributing to creativity and the cultural heritage of the country.
“If one is knowledgeable and has good access to the works of major or emerging artists, one could build a collection, which would probably increase in value over the long term.
“Buying and selling art regularly for profit certainly requires one to have knowledge, a strong network and real engagement with the scene,” Yong emphasises. By CECILIA KOK
FINE WINE
In October last year, three bottles of Chateau Lafite 1869 vintage went under the hammer for a record price of HK$1.8mil (RM705,000) in Hong Kong. That's reportedly the world's most expensive wine ever sold in an auction, and the sellers must have been laughing all the way to the bank.
Fine wine not just any wine can be a good investment, as there is a growing global demand from increasingly discerning consumers, especially from emerging economies, who are scrambling for the “limited” production to epitomise their growing affluence or improved social status.
Fine wine has a lifespan of 50 to 100 years, Vintage Assets Pte Ltd executive director Lionel Lau says to point out the fact that investors can therefore buy and keep those prized bottles for a prolonged period and wait for the right price to sell for a handsome profit.
“This investment is more suitable for those with a medium to long-term view,” Lau explains, adding that returns can range widely from 12% to 30%, with minimum initial investment starting from 5,000 (RM24,300).
“When investing in fine wine, it is best to buy in cases of six or 12 bottles, because bottles sold in their original box can actually fetch a much higher price in the secondary market, compared with individual bottles,” Lau says.
Prices of fine wine can be tracked via what is generally regarded as the world's “de facto” wine-trading platform at the London International Vintners Exchange, or Liv-ex.
“One can be sure that the prices of fine wine will continue to rise because the limited production by reputable merchants are insufficient to meet the fast-growing global demand,” he says.