Private Pension Funds

Malaysia is set to have private pension funds by the middle of 2010. This is part of the whole pension fund reform in the country and crucial for building the new high income-based economic model.

Several fund managers have shown keen interest in establishing private pension funds. Therefore, there could be a few, rather than just one.

At present, a relatively large proportion of the economically active population in the formal sector has pension coverage through the Employees Provident Fund (EPF), the public sector pension scheme and Lembaga Tabung Angkatan Tentera (LTAT).

As at the end of 2008, there were over two million self-employed Malaysians remaining outside any formal pension system.

The important issue is sustainability of financial security during retirement.

A survey by the EPF indicated that about 90 per cent of contributors have less than RM100,000 in their accounts. Over 70 per cent would have exhausted their total contributions within three years of withdrawing a lump sum on retirement at the age of 55. This means by 58, an average retiree would have depleted all his retirement savings with EPF.

This underlying trend reflects the sole dependence of retirees on their EPF savings as a safety net, and as such, the inadequacy of sustainable levels of income after retirement.

More Educated, More Greed?

A staggering RM20mil - that is how much Malaysians have been conned by African tricksters in the past few years in at least 11 internationally known scams ranging from Black Money to inheritances which promise non-existent wealth.

The statistics, provided by Bukit Aman, also showed that most victims are, ironically, educated people such as lawyers, accountants, academicians and even politicians who somehow were convinced that they could become instant millionaires by investing with these people despite all the publicity about such scams.

These con men, who preyed successfully on gullible Malaysians, are from Nigeria, Liberia, Cameroon, Burkina Faso, Senegal and Sierra Leone.

Conclusion - educated people are proven to bloody greedy!

How the Black Money scam works

The Black Money scam was reported by Interpol to have surfaced in Malaysia in 1998.
Most of these con artists enter the country on a social visit pass which allows them to stay up to 30 days. They tend to enrol in local colleges, just to obtain student visas so that they could extend their stay here.

They would then send out random emails and SMS, promising huge piles of money. Usually a “processing fee” is required in advance from their targets. In some cases, the victim lost big amounts of money without realising it until the fraudster goes missing. They are such smooth operators that a number of victims took loans from Ah Longs to pay them.

Victims are told about a stash of bank notes which had been dyed black to avoid Customs detection. The money was supposedly kept in a safe somewhere and the victim should purchase a type of chemical to wash off the dye which would then unveil “genuine” US dollars. The victim would be promised a share of the money.

The supposed origin of the riches varied with each new victim. The most popular version is that the money is the lost fortunes of former Nigerian dictator General Abacha which need to be transported out of Nigeria without the Customs knowing it.

Commercial Crime Investigation Department director said the con men, upon meeting their target, would produce a small vial of washing liquid called “Universal Automatic Washer” and ask the victim to select any black bank note at random.
The black banknote would be washed but with a sleight of hand, the con man would substitute it with a real note. Victims are given the “washed” bank notes and are encouraged to verify their authenticity at a money changer.

They would ask the victim to buy the chemical in order to process more money and that the costs of the chemicals are very high. These con artists modus operandi of “layering,” where a different person is sent to each meeting with the victim.
They are also known to use local women to carry out their deception, targeting single mothers or college students and using their bank accounts to conduct their shady business.

Most of these con artists are deported to their home countries as authorities usually lack evidence to charge them. However, a number of them would return to Malaysia under different passports.

As long as there are Malaysians who are fuelled by greed, there will be someone to take advantage of them!

10 Types of Scam

1) Animal vaccine:
These vaccines are ostensibly for farmers to use on their animals to help them breed faster. The demonstrations conducted by the con men are so convincing that the victims do not hesitate to buy the “magic vaccine” despite its high price.

2) Currency exchange:
Customers are offered extraordinary rates when they want to convert their money.

3) Inheritance:
Syndicates would use seemingly authentic documents to assure their victims that a great grandfather or close relative had died, leaving tons of money without an heir.
The victims are told that they would be charged a service fee and that they would then have a share of the riches. Once the money is paid out to the fraudster, he would disappear.

4) Parcel delivery:
Professionals such as lecturers and executives who surf the Internet frequently are often the victims. After befriending the victims through online chats, the conman would send them a parcel purportedly containing a “gift” such as a laptop, a watch or even jewelery.

Victims are told that the parcel had been held up by Customs, so they must pay a processing fee to retrieve the parcel. Once the fee is banked into a local bank account, there would still be no sign of the parcel.

5) Job offers:
Foreigners are dangled job positions in Malaysian hotels, multinational companies and telecommunication firms with promises of good salaries. All the dealings are done via Internet. They would be asked to pay for “visas” and “work permit fees”.

6) Lotteries:
Victims are told that through their email addresses, they have been selected as lottery winners where the prizes come in US dollars or pound sterling. To get the money, the victim has to be a member of a club and would be asked to pay very high membership fees.

7) Jewellery:
A syndicate would offer to sell gold in a form known as “granules”. The dealings often take place in hotel rooms where victims would be shown the genuine stuff initially but they would later discover that all they got is just a packet of metal powder.

8) “Bomoh”:
This usually involves celebrities and the wealthy who are eager to double their riches. The syndicate would use a piece of yellow cloth, a candle and the Quran, besides chantings. Victims are persuaded to leave a certain amount of money inside a bag. The are not allowed to open it until a specific time. Later, they would discover that all the money inside the bag had been quietly taken out and replaced with paper.

9) Credit card:
The suspects would use forged credit cards to settle their purchases at shopping malls, then reselling the items at a higher price later.

10) Drug-dealing:
Local women are made use of to smuggle drugs out of the country in exchange for jobs overseas.

Mistakes Mistakes

Here are some commonly made money mistakes that everyone should avoid:

Mistake #1:
Failing to Plan
Not many of us plan our finances. The most common response that we can anticipate would be the classic excuse “We are just too busy with work and family that we hardly have any time left to do the planning”. As a result, most of us end up paying higher taxes, leave our savings sitting silently in lousy investments for years or overpaying for financial products. Since there are always deadlines to be met at work, we tend to let our finances run its own course, thinking that it is of lower priority as there are no deadlines to meet nor is there anyone to force us to look into our financial plans, unless of course we run into serious deficit.
However, the important point to note here is that PLANNING is typically found to be a strong habit among people who have successfully accumulated wealth, even with just a modest income.

Mistake #2:
Spending Beyond Our Means
We constantly overspend due to peer pressure and consumer temptation that surround us on a daily basis. We are exposed to mild brainwashing with TV commercials, newspaper ads, sale circulars, and flashy shopping malls promoting the lifestyles adopted by the rich and famous, which of course involves having the latest mobile phone models, the latest luxurious cars, latest fashion trend. All these tempt us into spending exorbitantly and unnecessarily. The signals we get from not jumping on the bandwagon are that we will be considered left out of today’s scene. However, in order to do so, we end up spending way beyond our means. We will find that at the end of each month, the net salaries that go into our bank account are usually meagre, after servicing our car loans, housing loans, credit card bills and other utility bills.

Mistake #3:
Spending Future Money
Buy now and pay later! This has become a norm and the credit card has become a must-have item in our wallet. In fact, a lot of us carry more than one in our wallets. No doubt it is a convenient item to have around; however, some of us misuse it and treat it like a vehicle to spend our future money at will. It has become a common phenomenon where, by just settling the minimum payment at the end of the month, you will buy more now. As a result, the credit card bad debt snow-balls to an extent beyond our control. According to the bankruptcy report, the percentage of people declared bankrupt due to default in credit card payment has increased in the last few years especially among the younger age group. Be wise when using credit card. Making minimum monthly payment on credit card debt allows you to buy more now, but it will cost you dearly in the future.

Mistake #4:
Delaying Saving for Retirement
Most of us aim to take up early retirement. In order to achieve this, we need to plan our finances to make sure that we have enough savings to sustain the life style that we desire even after retirement. However, many of us find that even when we approach retirement, we still struggle to meet the savings target that we have set for ourselves earlier. As our income grows, our savings are supposed to increase as well, instead, we more often than not, have big items to spend on, i.e. house upgrading, new car purchase, club membership to keep up with our peers, etc., that prevents us from depositing more into our savings.

Mistake # 5:
Investing in the Wrong Products
There are various kinds of financial products in the market. However, in order for us to identify the right product that suits our risk and return profile, we need to equip ourselves with some basic investment knowledge and do the homework ourselves. Instead, most of us end up investing in some products, simply because we rely too much on the financial advisers, who might have the agenda of pushing higher sales for their products and therefore providing misleading information to us. It is always important to study the product characteristics or the management team track record before investing.

Mistake #6:
Not Saving for a Rainy Day
Some of us think that purchasing insurance is a waste of money. However, we are vulnerable if we and our family do not have insurance to cater for any loss of income. In the event of some unfortunate incident, especially those affecting the family’s bread winner, without any cash reserve or insurance, it will be devastating to the whole family. By then, it would be too late to start thinking of income replacement.

Mistake #7:
Focusing Too Much on Money Matters
All the above tell us to focus on our finances. However, on the other extreme, we must also not be too engrossed in accumulating our wealth to the extent that we lose sight of other priorities in our lives. While we plan our financial health, we must not neglect our own health, family and friends, career satisfaction and fulfilling interests. Without these, even with tons of money, we will not be happy.
Lastly, we need to remind ourselves of the importance of planning our finances. If we are not fully, totally and truly committed to creating wealth, chances are wealth will remain estranged to us.

http://www.min.com.my/min/article.aspx?menu=4&menuAttch=377&sec=article

Tax Planning Strategy - Unit Trusts

Unit holders will be taxed on distribution received from a unit/property trust. The income distributed will include a tax credit which is actually tax paid by the unit trust company. The unit holders can therefore utilise the tax credit available to set off against their tax payable. Any excess of tax credit over the tax payable will be refunded by the tax authorities to the unit holders.

Income distributed out of exempt income or gains made from the sale of investments (shares/property) of a unit/property trust is not taxable in the hands of unit holders.
Unit holders who choose to receive their income distribution in the form of new units are regarded as having purchased extra units and these fresh units are not subject to tax.

Gains realised by unit holders on the transfer or redemption of the units are treated as capital gains and therefore not taxable.

Have Fun & Fund When Investing!

When investing in stocks control your greed and fear. We need to know who we are in order to do well in stock market investing - Ooi Kok Hwa, investment adviser

The recent strong market rally caught many investors by surprise again. Most investors predicted that it was just a bear market rally. They have been hoping the market will turn down again. Unfortunately, it has been moving up strong without looking back.

For investors who have not invested during the recent low in March 2009, they are getting very worried as they are not benefiting from the recent rally. They may even wonder whether they should jump in now in order not to miss the boat.

Another group of investors, who have managed to catch some stocks at cheap prices during the previous market low, are also facing the dilemma of whether to lock in their gains now or continue to hold on to their gains. Some even regretted selling their stocks too early last month.

We all know that it is very difficult, in fact impossible, to predict stock market movement. Most investment gurus will refuse to time the market.

Howard Kahn and Cary Cooper published a book titled “Stress in the Dealing Room” in 1993. According to their surveys done on 225 dealers, 73.8% of them suffered from fear of “misreading the market.” Most dealers have the same problem of acquiring and handling information.

We believe that in order to do well in stock investing, we need to know ourselves, especially in controlling our emotion on greed and fear. Due to information overloading, our emotion is highly influenced by the news that we read. Each time we feel that the market is getting bullish and time to buy stock, the overall market will collapse the moment we enter.

On the other hand, the moment we fear that it will drop further and we have decided to cut losses, we will notice the market will recover after that. Most of the time, the prices of stocks that we sold were at the lowest of the recent fall.
In order to control our greed and fear, we need to ask ourselves whether the market has discounted the news that we have received.

For example, many analysts have been bullish lately, having the opinion that the worst may be over for the market based on the recent economic indicators which showed that the overall economy may have stopped contracting or is on its way to recovery.

Nevertheless, the recent strong market rally would have discounted this bullish news. In fact, we need to ask ourselves whether the current stock prices can be supported by the fundamentals for certain listed companies.

In our experience, in most cases, the moment we feel like buying stocks is the best time to sell them while the moment that we feel like selling them is in fact the best time to buy. We can apply this contrarian theory quite successfully in most periods.

Sometimes, if we are taking in too much contradicting information and, as a result, get confused over the market direction, we feel that the best strategy is to stay away from the market until we have a better and clearer picture of the overall market or the economic situation.

We should not be influenced by other opinions. There are times that we need to follow our heart. Sometimes, our hearts try to warn us from taking hasty investment decisions. However, we refuse to follow our intuition but instead, choosing to get influenced by others or the information that we read and ending up making mistakes.
In conclusion, we need to maintain our concentration.

We should not be led by the market sentiments regardless whether it is on the way up or crashing down fast. We need to go back to the fundamental of economic situation and the companies’ performance and future prospects.

One way to minimise the feeling of regret is to stagger our purchase and selling. We will only know the peak when the market starts turning downwards and vice versa. Therefore, by staggering, we will have an averaging effect rather than taking a one-time hit, especially if it is at the wrong timing.

Happy Mistake Free Investing

"Learn from the mistakes of others. You can't live long enough to make them all yourself." - Eleanor Roosevelt.

Some mistakes are more painful than others. Followings are investing mistakes that you do not want to make and are avoidable.

#1 Don't Let Poor Asset Allocation Make You Poor

Before trying to figure out if the latest share tip is worthy of your investment dollars, you need a plan. How much should you put into shares? How much into bonds? How much should just be in an emergency savings account fund?
Four rules of thumb are:

Rule 1: If you need the money in the next year, it should be in a high interest savings account.

Rule 2: If you need the money in the next one to five (or even seven) years, choose safe, income-producing investments such as gilts or bonds.

Rule 3: Any money you don't need for more than seven years is a candidate for the stock market.

Rule 4: Always own shares.

Remember to be honest with yourself about how risk-tolerant you are. When times are good, it's easy to take too many risks with your portfolio, and vice versa.

#2 Don't Invest In Anything You Don't Understand

Buying shares in a company you don't understand is a bad move. If studying individual companies isn't your thing, there is no shame in buying and holding an index tracking fund.

Don't trust an "expert" just because they use terminology you don't understand.
If you have no clue what the risk is in the risk-reward balancing act, you're better off putting your money elsewhere. Yeah, it's possible to take an insane risk and make your fortune in a year. It's also possible to win the lottery … but I wouldn't bet my retirement on it.

#3 Never Buy On Margin

Just don't do it. Using margin (i.e., borrowing money from your broker to buy shares) is a very dangerous game. You are not in control of your own destiny – using margin transfers your financial destiny to the whims of the stock market and of your broker.

Don't Hate … Participate!

Here's a bonus tip: don't procrastinate. It's never too late to start taking control of your financial future … but it's never too early, either.

Happy, mistake–free, investing.

Baby Step To Financial Freedom - Comments

My mate, Kayage Class 88 commented on the article, Baby Step To Financial Freedom posted on Monday 4 May 2009. He has his points and thought it would be a waste if I did not share his thoughts. Here we go - lock stock barrel...

Whilst knowing how to invest is a good thing, I do not think it is a 'must'. Looking back at our parents' time, were there mutual funds schemes during that time? I dare say 'No' or very limited.. and even if/when there was some kind of funds being set-up, it was flawed with cheating cases where someone ends up absconding with a large portion of the investors' funds (eg. Kojadi at one point of time - my dad was part of the statistics as he invested some of his hard earned cash there)..

So, question - How in the world did our parents made it thru without needing to know how to invest, what more investing during their younger days?

BTW Chee Wee, i think your formulae lacked an important variable. I.e. our kids.. No, I am not saying that we should expect our kids to finance us when we are older. However, knowing our asian mentality, where family bonding is the root of being a family, that is the situation we, highly likely, would be in, in the future (this is provided we are married and have kids, ya?)

Anyway, sorry for the side track, yes, we need not know how to invest. However, if we do know how to invest, it would give us more buffer in our spending in our later days. Chee Wee, another factor that i think you might have missed out is the inflation factor. There is no point of placing one's cash somewhere to generate 3% while the inflation rate is above that. Thus, following your sample, if the current inflation is at 4% and the FD return is at 3%, the investor is actually losing $$$ in a long run. He is better of holding on to the cash or placing it where it can generate a higher returns.

A prudent investor does not place all his eggs in a basket and investment does not only mean FD, Shares and mutual funds alone... Properties, gold, collector's items should be considered too.

Let's take a look at gold, if you study the pricing trend, you would notice that gold is one commodity that had been steadily going up in price thru out the time, thus investment in gold makes a good option too.. Well, next question, where do I store all these gold that I had bought.will be buying? No fret.. These days, golds are sold w/o the need for physical transfer. Instead, the gold can be safeguarded in a bank with the bank issuing you a certificate. Thus, at any point of time you want to liquify your gold, all you need to do is bring along the certificate.

Price for strategically located properties will continue to appreciate. Thus, buying a bungalow for RM100k in PD hoping that the price would appreciate would be a wrong investment idea. Instead, a D-story in BU today might cost RM700k, but in 10 years time, it would probably cost more than RM1mil - Statistics had proven (from trend study), less tahan 5 years ago, the D-story house in BU only costed RM450-RM500k!. So, if you do the maths, RM300k (profit) divide by RM700k (cost of purchase) multiply by 100 gives you a return of about 40-50% for the 10 years investment - So much better than FD, no? and during that 10 years, you could possibly make some income via rental.

Lastly, collectors items (eg. proof coins, stamps, old coins & notes, antique items). These have high resale value as time goes by (provided you are collecting the 'right' set of items). Again, for that investment, you probably would make 5-10 times your cost. Again, this depends on what you foresee in the future as items in demand ;)

If you are not awared, these days there are these thing called. Collectable trading cards.. they come in the category of common, uncommon, rare and super-rare. I.e. you can collect them as a hobby, use them for leisure games or competitive games (yes, they even have world meet and superbly good price for the winners) then later on sell them off for a good price. A super-rate (out of print card) could possibly fetch USD2-3k these days.. So, imagine the opportunity for investment here.

I have a friend who collects comics (Marvel and DC).. and yes, I dare bet you read in the papers not too long ago how much an auction of the 1st ed. for Superman fetched the seller, ya?..

Chee Wee, sorry for being so long winded, and no intention to hijack your posts :P.. Just want to share other possible investment options besides the capital market :P

BTW, do keep away from HYIS (High Yield Investment Scheme). I do advice against this mainly for 2 reasons:

#1. your returns are from fellow family and friends you hoaxed into the scheme. So, this investment scheme are only for those w/o concious as you have to have the stomach to see your friends' losses at ur benefit.

#2. if you really ust enter into a HYIS, do so only if the scheme is less than 6 months old.. entering one which is about 1 year old is shaky. Most HYIS life line is 2 years. i.e. the initiator will chao-low (run-away) before the end of 2 years!!

Happy investing ;)

Planning To Retire!

"If you can't make decisions in life, you're a bloody menace. You'd be better becoming an MP!" Bill Shankly

Young parents Viveka and Ananda have been putting aside a fixed sum every month into their savings accounts as part of their retirement nest egg after deducting their household expenses. The ‘journey’ taken is lauded but perhaps they need to re-examine the mode of ‘vehicle’. The common belief is that keeping our money in the bank is the best way to preserve our capital. However this instrument may not be good enough given that interest rates of bank deposits can hardly outrun inflation.

The rising cost of living and medical expenses could be a major financial burden.
According to Great Eastern Life Assurance, only 34% of Malaysians are putting aside money regularly for their retirement funds. Longer life expectancy, delayed marriage and having children later would leave the retirees in a vulnerable position as they also need to set aside medical funds for themselves and education funds for their children.

Although Employees Provident Fund savings is one of the main channels to provide for retirement, 99.9% of the contributors would withdraw these savings in one lump sum once they reach 55 years of age and 70% would use up all these savings in just three years post-retirement.

Another alarming note is that those who do save do not have a concrete plan on how to build their retirement fund. They just save as much as they can and hope they will have enough to cover their retirement needs. They do not segregate their savings for retirement and lump everything as general savings. To make matters worse, they would use the money should other needs arise.

In addition, 73% do not seek advice from financial professionals – a behaviour that compounds Malaysians’ poor retirement planning ability further.

Instead of relying solely on EPF and personal savings, Malaysians should consider early financial planning, which would save them the stress of dealing with insufficient retirement funds or seeking prolonged employment to ensure financial stability.

There are a variety of choices available when it comes to building your retirement fund.

Depending on your risk appetite, investment horizons and affordability, you can invest in properties, equities, unit trusts and investment-linked insurance to name a few. The key is to have a sound investment strategy that is the ability to balance risks and returns effectively according to the desired investment tenure.

Nevertheless, it is always advisable to contact a professional financial advisor or a wealth planner who can provide advice on how to best go about securing your retirement based on your financial circumstances, priorities and needs.

Baby Step To Financial Freedom

Assume you start investing at the age of 25 and intend to retire at 55. By saving RM100 per month and invest the money into fixed deposits (FD), assuming the FD can provide about 3% return over the next 30 years, your investment portfolio will reach RM58,274 when you reach 55.

However, if you can generate 5%, 7% and 10% returns, your investment portfolio will achieve RM83,226, RM121,997 and RM226,049 respectively.

The EPF may be able to provide us about 5% whereas unit trust investments may be able to give us 7% to 10% returns over a very long-term period.

We treat the 3% FD return as our risk-free rate. Any extra returns above this rate will be the risk premium for the additional risk that we are prepared to face. Thus, we need to understand our risk tolerance level before considering any type of risky investment. We should know if we are willing to accept the uncertainty of return that is inherent in those investments. Besides, we need to understand if we can afford to have our savings tied up for a long period before we can achieve our investment targets.

When we earn more money, we should have more money for our investments. We should save and invest more. Unfortunately, the word should seem so far away as some investors just do not have the discipline to save even though they earn high salaries.

If we can cut down on our expenses and live below our means, we should have more money to save. We should always ask ourselves whether we want to spend money on unnecessary luxury items to keep up with the Jones or spend less to achieve financial freedom earlier.

However there is no straight-forward answer to how to generate high returns. For a start, we can equip ourselves with strong financial and investing knowledge. Read up investment books. Digest the financial information and do some research in investment.

Once we have built up the knowledge, start practicing. There will be some roller-coaster rides or wave riding. The important thing is to learn along the way. All these rides will help us in making better investment decision that will eventually translate into better returns.

Happy Investing.

Learn To Invest

DPM is asking the Bumiputra and Indian investors to take up the remaining two billion Amanah Saham Malaysia (ASM) units as the Chinese have already snapped up their quota of 999mil units.

He was quoted “This clearly shows the level of understanding among the Chinese when it comes to investment and financial planning for the future.” Susah dahulu, senang kemudian!

He also urged parents, teachers and the media to play their part in educating the public, especially the young, to save and invest from an early age. He added that while the Government encouraged domestic spending to boost the economy, it wanted the people to save by investing their money in proper financial instruments such as unit trusts.

He said the additional income would come in handy for future planning.

Some current statistics on the fund manager, Permodalan Nasional Berhad (PNB).

The net inflow of money into unit trusts has been healthy despite the current global uncertainties with RM5bil invested in PNB related funds as of this year. This was in stark contrast to the scenario during the 1998 financial crisis, which saw withdrawals of almost RM1bil every month from unit trust schemes.

PNB enjoyed a net inflow of more than RM10bil into its funds last year. PNB had a total of 9.3 million unit holders, with a total investment of RM87bil. PNB had invested in 281 companies, of which 230 were listed on Bursa Malaysia.

One Pence Mortgage

A couple in Britain pays almost nothing for the mortgage on their house. When news broke out about a British couple paying a paltry one pence (five sen) a month for their mortgage, it set tongues wagging.

However it came as no surprise. After all, banks are paying what pensioners grumbled were “less than peanuts” interest for their hard-earned savings. They seemed blessed as their interest-only mortgage payments plunged from £1,500 (RM7,950) a month to almost zero.

On closer examination, it doesn’t appear that rosy. While the base rate on their £400,000 (RM2.12mil) house in south-west London, had plunged from 5.5% to 0.5% they still have a huge debt that is not getting any lower. The principal, that is.

Perhaps, they could have negotiated with the bank to maintain their payments and reduce the mortgage. This would have reduce the amount of interest they have to pay down the years. Regardless of the interest rate, the top priority should have been to pay off the debt (principal) as much and as quickly as possible.

Paying an interest-only mortgage is risky business, more so when the property value continues to slide, especially during an economic crisis. They bought their house in 2007 and property have depreciated by about 20%. That means it is worth about £320,000 (RM1.69mil) or less. In other words, they would have lost about £80,000 (RM424,000) on paper – despite having to pay almost zero interest on their loan.

Having said that, the worst off are probably pensioners and widows who had saved all their lives and survived on the interest from their savings. These fat-cat bankers are paying little or no interest on savers’ accounts.

Guide to Smart Investment

A mate of mine, Razali has just launched his maiden book. Check it out in the bookstore or online http://laburniaga.blogspot.com/
Get a copy to get some useful tips on investing in shares. The timing is right to ride the wave!

Panduan Bijak Melabur
Menguasai Selok-Belok Pelaburan Saham

Ramai pelabur yang melabur dalam pasaran saham tidak membuat sebarang penyelidikan sebelum membeli saham. Mereka mendengar nasihat broker, saudara-mara atau bisikan khabar angin daripada rakan-rakan tanpa menyiasat kesahihannya.

Mereka tidak sedar bahawa kaedah pelaburan sebegini mengundang risiko. Ramai orang sanggup meluangkan banyak masa membanding harga dan kualiti barangan di pasar raya. Namun apabila membeli saham, mereka rasa malas untuk membuat penilaian dan analisis sewajarnya. Keputusan pelaburan yang maklum dan bijak penting untuk menjamin keuntungan.

Buku Panduan Bijak Melabur ini akan dengan membantu anda:

1. Membuat persedian sebelum melabur
2. Mendapatkan sumber maklumat berguna
3. Memilih dan menilai saham
4. Mementukan masa paling sesuai untuk membeli
5. Membuat keputusan untuk menjual saham
6. Mempelbagaikan pelaburan
7. Membina portfolio saham dan aset anda

Menggunakan analisis asas, anda akan menilai syarikat yang menjadi sasaran pelaburan dan bukannya semata-mata meninjau pergerakan harga saham dengan carta. Malah, jika anda rasa anda tiada masa untuk membuat analisis, anda boleh menggunakan jalan pintas dengan meneliti analisis yang dibuat oleh pakar pelaburan.

Selepas membaca buku ini, anda akan lebih fasih dengan selok-belok pelaburan dan menggunakan sepenuhnya segala maklumat yang dikumpulkan sebelum membuat keputusan untuk melabur. Sebenarnya pelaburan saham tidaklah sesusah yang disangka. Secara kesimpulannya, maklumat dalam buku ini akan membantu anda membuat keputusan pelaburan yang bijak dan maklum dalam segala keadaan pasaran.

Buku pertama saya ini setebal 230 muka surat dan diterbitkan oleh Truewealth Publications (Syarikat milik Azizi Ali). Harganya ialah RM39.90.

Cash is King?

It is not always easy to do what is no popular but that is where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized.

Successful stocks don’t tell you when to sell. When you feel like bragging, it is probably time to sell. I have never bought a stock unless, in my view, it was on sale - John Neff on Investing.

Are you adopting a wait and see attitude and put on hold your investment decisions? For employees are you having sleepless night thinking about potential financial shock either through loss or reduced income? Therefore it is a must to have some cash reserve at these times. The rule of thumb is to have at least 6 months worth of cash reserve. Budgeting is useful to trim excess fats from monthly expenses.

If you have cash, you might want to consider :

1) Invest in real estate. There are people in need of cash and are desperate to sell. Prices will fall.

2) Buy businesses. Time to indulge in ventures that you enjoy doing and earning money at the same time.

3) Buy undervalued shares. Identify undervalued shares that have strong fundamentals with good prospects. Market operates in cycles. Invest with a long term perspective.

4) Invest in unit trust. Allows professional fund manager to manage your portfolio when you do not have the time or expertise to do your own research.

5) Other investing options like gold, currencies, antique collection etc.

There are many opportunities when the market is down and everyone feels the situation is hopeless. Do your homework well and not afraid of the perceived risk. Change the investment strategy bit not the fundamental principle, which is to search for value and make profit in the future.

In recession cash is king because it allows you to capitalize on these opportunities at attractive prices / bargain. If you are sitting in a pile of cash, strike it when the right opportunity comes along otherwise your wealth is diminished by inflationary pressure.

Village For Sale

Sheep dot green hills. Pheasants hop across country lanes. Quaint cottages sit next to a tiny stone church. Neighbours who have known each other since birth greet strangers warmly.

And for at least 23 million pounds (about $32 million), this leafy, nostalgic slice of England could be yours.

The village of Linkenholt's 21 cottages, grand manor house, lush green cricket pitch and accompanying pavilion are part of an estate that also encompasses 1,500 acres (600 hectares) of farmland and another 425 acres (170 hectares) of woods. The only piece of property not for sale is St. Peter's, built on the site of a 12th century church. According to the estate agent – "that is owned by God."

The 40 or so residents, many of whom have lived here all their lives, hope any new owner will keep the estate together and resist the urge to parcel off the land located in Hampshire only 75 miles (120 kilometers) southwest of London.

It's not the first time the estate has gone up for sale. It was bought for 2,000 pounds in 1629 and sold about 60 years later for 12,000 pounds - a kingly sum in those times.

The estate remained in the same hands until the 19th century. Roland Dudley bought it in the 1920s. Herbert Blagrave took ownership in the 1960s - and after he died without heirs, his charitable trust became the owner. The trust is trying to diversify its interests, which is why it has chosen to sell. Despite the challenging economy, Linkenholt is expected to generate interests. It is a unique purchase as there isn't really anything like this on the market.

I am definitely interested as the other instruments like FD, unit trust and shares are not sexy at the moment. However the asking price was way too steep. Like it or not have to give it a pass.

Perhaps the political frogs can retire happily ever after over there. Perhaps the few high profile missing individuals can be found there. Turn it into a Malaysia village. Dot it with pomelo, durian and angsana trees. The cricket pitch is useless because chances are the only cricket the new owners know is the insect, so just tear it up and build condominiums!

If the condominiums are not selling well, run to the authorities for bailout. Then make another round of money by selling the land to the authorities for 200%. The authorities need the land to build a sports academy to produce world beaters. They have discovered that our sportsmen were constantly ‘frozen’ on big stage tournaments because they did not acclimatize well with the weather!

That’s not the end. Get the contracts to build the academy, to supply materials and services, to maintain the infrastructure and the list goes on and on…..

Majulah Sukan Untuk Negara.

Right Time To Invest?

The outlook of the investment industry remains uncertain amid continued risk aversion, volatility and flickering signs of hope in capital markets, industry players said.

Sales may improve this year as equity markets locally and abroad were starting to look attractive due to cheap valuations. Although sales had started to slowly pick up since early this year, it may be impacted severely if the market continues to fall to lower levels.

According to Federation of Malaysian Unit Trust Managers, the number of unit trust agents exiting the industry last year is less than 10%. The decline was much lower compared with other agency-related industries. Most consultants are in for the long haul and understand that the recent market volatility is temporary. Despite the poor investor sentiment, there had not been any panic selling of unit trusts.

Now is the right time to invest. In the current market where uncertainty prevailed, it was best to accumulate assets using the method of dollar-cost averaging, whereby a fixed amount of investment is regularly made regardless of how the market is performing.

As for investors who prefer to invest in one lump sum, they can invest based on the principle of asset allocation. Their money is divided into three portions, namely aggressive or equity-based funds, moderate-risk funds or lower-risk segments such as bonds or money market funds.

Last week, Amanah Saham Nasional Bhd (ASN) announced an income distribution of 6.25 sen per unit for Amanah Saham Malaysia unit holders. The dividend announcement was for the financial year ending March 31, 2009 (FY09). The dividend was the lowest ever declared by ASN. However it is more attractive than Fixed Deposit rate of 2%.

Investment - Was It All Worth It?

CIMB group CEO Datuk Seri Nazir Razak said “Investors should diversify their portfolios and preserve their capital under the current downbeat and uncertain economic climate. Look out for companies that are well managed. At times like this, the risk-reward equation is greatly amplified, so invest in companies with astute leadership that is well-aligned with shareholder value creation; the right managers can make highly profitable and transformative acquisitions or diversifications.”

He also cautioned investors to ensure that their asset management companies had high integrity and able to withstand temptations to be less transparent and ethical in the face of adversity.

Hmm.. Well managed companies, astute leadership, well-aligned with shareholder value creation, high integrity, transparent and ethical – love all these words.

Unfortunately we are not living in a perfect world! Thus the selection is pretty uncomplicated as there is only a handful of choices right here right now!
Definite no-no to those which are closely linked with the political parties or his big brother! These companies are the exact opposite. Worst still, they are probably managed by some Little Napoleons or some sons in law!

Perhaps, it is time to discard our investor’s cap (FD is only paying a miserable 2%, lower than inflation rate) and put on our spender’s cap!

Be Present

Imagine there is a bank that credits your account with RM86,400 every day, It carries over no balance at day end. It will delete the balance that you have failed to utilize. What should you do? Of course, draw every single sen!

Each of us has such a bank. It is called TIME. Every morning, it credits you with 86,400 seconds. At day end, it writes off the balance that you have failed to invest to good purpose. It carries no balance and allows no overdraft. Each day, it opens a new account. If you fail to use the day deposits, the loss is yours. There is no going back. There is no drawing against tomorrow. You must live in the present on today’s deposit. Invest it wisely in achieving good health, wealth and happiness. The clock is running. Make the most of today.

To realize the value of One Year, ask a student who failed a grade.
To realize the value of One Month, ask a mother who gave birth to a premature baby.
To realize the value of One Week, ask the editor of a weekly newspaper.
To realize the value of One Hour, ask lovers who are waiting to meet.
To realize the value of One Minute, ask a person who missed a train.
To realize the value of One Second, ask a person who just avoided an accident.
To realize the value of One Millisecond, ask the sprinter who won a silver medal.

Treasure every moment that you have. Time waits for no one. Yesterday was history. Tomorrow is mystery. Today is a gift, which is why it is called present.

Delicious Buffett

Stock market guru, Warren Buffett, made headlines when he bought substantial stakes in technology and services giant General Electric Co (GE) and financial heavyweight Goldman Sachs Group.

Just when everyone else was pulling out their investments from Wall Street, Buffett stepped in to inject some US$8bil in these two companies via his investment company Berkshire Hathaway Inc.

“Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well,” he once said.

The five main criteria Buffett uses for stock selection are earnings versus growth, high return on equity, minimal debts, strength of management and simple business model.

Buffett is an astute long-term investor and has always investigated the underlying fundamentals of a company, rather than market sentiment. He has always determined the intrinsic value of a business and paid a good price for it. He believes price is what you pay, value is what you get.

Being prudent, Buffett is said to never invest in any business that he could not understand, a principle that paid off when he escaped the dotcom market crash. His investment principle is simple— always analyse a company’s annual reports to check its fundamentals and know what you are investing in.

Should we emulate Buffett? Many investors would say yes if we are buying for long-term. Investors should generally hold on to three principles — be long-term oriented, only buy what we can afford and be focused in what we buy.