Follow the right strategy

June 25, 2008

One of my close friends asked me about unit trust investment, the other day. This friend of mine had invested around RM40,000 of her EPF money for over four years. However she is unhappy with her return. When she told me her profit, I was quite shocked at how little she made.

So I explained to her that unit trust is a medium to long term investment. And, like everything else it is vital that the investor follow the right strategy when investing their EPF money into a unit trust fund. And it is the consultant’s job to advise her on the strategy, as followed:

1. Follow the journey: An investor needs to keep his/her the money in the fund,  between at least 3 to 5 years so that they will be able to enjoy the profit. If an investor invest in less than 3 years there is no guarantee that he/she will make profit.

2. Have the discipline: In order to leverage on the dollar and cost averaging it is crucial that an investor top up his/her EPF investment into a unit trust fund in every 3 month. This means, the consultant should come and see the investor 4 times a year (to get the investor’s thumbprint and review his/her investment). Not lesser than that.

3. Choose a consultant who are able to monitor the right time to enter and exit (a particular fund). One that advises an investor on what to do before taking the appropriate measure. The consultant should also keep the investor informed on every move he/she made involving an investor’s money. 

When it comes to investing in unit trust, it is important that the investor understands and follow the strategy. And just as important is having a consultant who educate his/her client so he/her can make an informed decision.

At the end of the day, it is your money. So listen to your gut feelings. If it doesn’t feel right, go back to your consultant and ask for clarification. Or go to the respective unit trust company’s website. You can also call the customer service hotline. For some consultants this may be just a job. Make sure you look for one that is able to answer your queries and is accessible. 

Unit trust is a middle to long term investment. Having a trusting relationship with a consultant would greatly help. 


Related post: Have an investment objective, invest and diversify


One Response to “Follow the right strategy”

  1. hashami Says:

    101% agree with the recommendation investment period in unit trust medium to long term. Client relationship between consultant are the most important part need to be build long term.

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