Malaysia was amongst the worst performing market in the region for the month of May 2015, with the FBM KLCI falling 3.89% m-o-m or 70.75 points to 1,747.52 points. In USD terms, the lost was more profound at 5.7% given the depreciation of RM versus the USD. The main culprits to the underperformance were the weaker than expected reporting season and foreign outflow, stemming from the nagging concerns over the potential impact of an impending rating agency downgrade. Year to date, foreign outflows reached the largest monthly net sell position, amounting to RM2.5bil for the month. The main laggard for the month was plantation industry, which continued to weaken alongside the poor crude palm oil prices and productions. Against the FBM KLCI, the broader market, FBMEMAS Index was also down by 3.52% m-o-m while the FBM 70 Index and FBM Small Cap Index were impacted less severely with a decline of 2.0% and 3.0% respectively.

Malaysia Investors Worry Most about Healthcare Costs in Retirement

Malaysia investors are more concerned about the affordability of healthcare in retirement than deteriorating health in old age, in contrast to their peers elsewhere in Asia for whom declining health is the main concern, according to new research from Manulife.
Findings from the Manulife Investor Sentiment Index* (MISI) survey for the first quarter of 2014 show Malaysians (51 per cent) to be the least concerned about declining health in retirement of all the markets in the region. In contrast, investors (64 per cent) across Asia cite this as their number one concern as they look ahead to retirement.

During retirement, Malaysian investors estimate that healthcare and medical expenses will make up 13 per cent of their total monthly expenses. Those investors intending to maintain their medical insurance in retirement expect to spend a further 10 per cent on premiums for health and medical insurance. In their estimation, only household expenses and daily necessities (28 per cent) will account for more each month.

 “While their priorities differ, deteriorating health is unquestionably a concern for Malaysian investors as it is for everyone else,” said Mr. O’Dell. “They obviously want to protect their savings and running up high healthcare expenses is not a good way to do that.”http://www.manulife.com.my/about_us/Pages/NewsRelease.aspx?newsid=98

MAAKL MUTUAL declares distribution for 4 equity funds

MAAKL Mutual declares distribution for 4 unit trust equity funds for financial year ending 31-July-2013:

- MAAKL Value Fund       - 6.50sen/NAV- RM0.8828 - Gross Yield:8.33%
- MAAKL Growth Fund    - 3.60sen/NAV -RM0.4860 - Gross Yield:8.29%
- MAAKL Al-Faid Fund    - 3.50sen/NAV -RM0.4673 - Gross Yield:8.33%
- MAAKL Progress Fund - 2.75sen/NAV -RM0.3961 - Gross Yield:8.28%

FBM KLCI Outlook 29-07-2013

With technical momentum indicators for the FBM KLCI getting increasingly overbought, there is more likelihood for profit-taking correction this week, as the July month comes to an end on Wednesday. However, note that if selling momentum is weak, profit-taking dips will be shallow, as buyers should be waiting on the sidelines to bargain at lower and stronger support platforms.

On the index, immediate resistance rests at 1,814, the 150 per cent Fibonacci Projection (FP) of the 1,526 pivot low of May 18 2012 to this year's April 30 high of 1,718, and next at the all-time high of 1,826 of May 6. In case of a breakout, the next upside hurdle will be 1,837, the 161.8 per cent FP level.

On the flipside, immediate support would come from the previous 1,800 immediate psychological resistance level, and then 1,791, representing the 138.2 per cent FP level, followed by 1,775, the matching 30- and 50-day moving average level.

The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.
http://www.btimes.com.my/Current_News/BTIMES/articles/kala28/Article/index_html

Can your child afford to support you?

You provide for your children from birth to college, even pay deposit for some major assets they purchase. But is it reasonable to expect the little one, who you doted, to pay for you later in life.  Cost of sheltering a parent cost a minimum of RM1000 for shelter, food and other expenses. Compute that for 20 years (age 60 to 80) and its a substantial drain on his livelihood. 

Income is not wealth.

If you earn a high salary/income but you spend it all of it, you are not any more weathier than someone who makes less money but like you spends it all. Both have not saved any money.  People earning high  salary/income may not be saving enough whereas those who earn/make less may be more frugal and better at saving. Ultimately, only those who are able to save rather than spend would be more wealthier.  It is what you save that matters. 

If you set your goal by your net worth, instead of the level of income, you will be able to measure if you are on track to meet your financial goals; and if you are not, you will know by how much you are off-target.  You will also have complete control over your net worth by the amount that you save or spend.

Sett goals by net worth with time frames of 2-year; 5-year or 25 yrs until your planned retirement age, then check yearly if you are on track or otherwise to meet your goals.  

Exchange Traded Funds

Exchange Traded Funds (ETF) are open ended investment funds listed and traded on the stock exchange (FBM KLCI). It aims to track the performance of an index and provides access to a wide variety of markets and asset classes. It holds a basket of individual securities, allowing individual investors to take position in many individual companies or fixed income securities with one trade. ETF listed in FBMKLCI are ABFMY1, CIMB40, CIMB 25, FBMKLCI-EA & MYETFDJ.

Preparing for retirement

Many of us in welcoming retirement do not plan or think about retirement planning, assumming that EPF savings will be sufficient to support us.  However some had to seek re-employment or rely on their children. To ensure that this does not happen, its important to plan to be financially independent during your golden years.  Retirement planning involves a few steps to determine the required amount, how much you have now and how to match the difference. 

The crucial questions are:

1. When you want to retire?
2. How much do you need during retirement?
3. How long do you need the money?
4. How much is the total fund you need?
5. How much assets you will have upon retirment?
6. How to make up for the difference?
7. What you should do now? 

You need to work out a comprehensive retirement planning taking into account your assets, debts, expenses, savings and other financial goals.  Seek the assistance of a qualified Financial Planner if you find it difficult to do it on your own.

Budget Blues

"No time" is one of the top excuses for not preparing a budget.  Failing to budget may lead to personal bankruptcy.   A budget is crucial to to manage your money otherwise you may spend your way to serious problems.

• Set a spending limit.
• Track expenses.
• Develop smart spending habits.
• Use credit cards wisely to avoid unnecessary interest or penalty.
• Pack lunch if you can.
• Share resources like car-pooling or books/magazine.
• Reduce fixed expenses
• Ideally not more than 60% should be on expenses.

Budgeting requires discipline to succeed, but once it becomes a habit, you will reap the benefits tremendously. 

Whats your cost if delay investing

Some of us put off financial planning, postpone retirement savings or delay pay off escalating debts.  These eventually translate into a bigger financial loss. To eradicate this habit, learn how time determine the value of money.

• The power of compounding. When money works for us, it grows in value or compound, earning interest on interest and it is one of the greatest aspect of financial planning. 
• The cost of procrastination. If your goal is to raise RM100,000 by age 65,  compounding at an annual rate of 10%, your current annual saving (assuming you are 20 year old now), RM1,132. However if you only start your savings at age 50, your annual saving will be RM22,500.
• Inflation factor. The price of goods and services increases over a period of time. Thus a dollar tomorrow will not buy as much as today's dollar.
• Other lost opportunities. We can be adversely affected financially if we put off other important financial matters like life assurance, retirement plannning, estate planning or even basic financial planning.  Eg the insurance period of a 45 year old is much higher than than for a 20 year old for the same coverage.

Delaying manging our money may result in lesser in value compared to investing now.  

MAAKL's Money-Weighted Rate of Return (MWRR).

Have you ever wondered why your unit trust managers sometimes report award-winning fund performance figures for investments that you own in your portfolio and yet your own actual returns fall short of those numbers? Some  explanation might help you to understand the difference.

If you had invested a lump sum at the beginning of the year and did not add or redeem your investment, your return would be the fund’s return minus the service charge you paid. That’s simple and straightforward.

John invested RM120,000 on 1 January 20XX. At the end of the year, the market value of his investment was RM144,000. Your investment return is 20% as reported by the Fund Managers. 

However, in practice, you do not tend to sink in your entire investment on the 1st January,  but rather  you invest different amount at ad hoc or regular intervals throughout the year. In such situations, computing the rate of return becomes far more complicated Thus if you have invested the same RM120,000 on a monthly basis of RM10,000 per month,  and the profit generated are the same as above of RM144,000,  you will realise the true rate of return cannot be the same as the single lump sum invested at the start of the year as the unit price tend to flactuate over a period of time.

The MWRR is a measure of the client’s portfolio returns. It is calculated by finding the rate of return that will set the present values of all cash flows and terminal values equal to the value of the initial investment. In other words, it takes into consideration all investments and redemptions in calculating the rate of return of a unit trust portfolio.

 MWRR makes it easy for you to compare your unit trust portfolio’s returns against other investment

Switching Funds

Switching is a process of transfering your investment from one fund to another.  Switching is done when there is a change in your outlook of the economic situation and you desire to preserve the profits you have gained or to reduce further losses or from an investor's changed perception of investment opportunities

Example: If you believe that the stock market has appreciated a lot and that further stock market upside is limited, you will then switch your Equity funds to a Money Market fund. Alternatively, if you feel that the market has bottomed out and further downside correction is limited, you will then switch your Money market fund back into an Equity fund in order to benefit from the market appreciation again.

Understanding the Prospectus

A prospectus is an  important document that you should read before committing yourself to any investment.  It serves as a guide for you to know what to expect when you invest in a specific fund.

As there are a wide range of  funds with various investment objectives and risks involved, investors need to make wise decisions in choosing suitable funds for themselves.

Some of the key elements to note in a prospectus are:

* Investment objective

* Investment strategy

* Risk factors

* Investors' profile

* Financial performance

* Fees and charges

A potential investor can then make an informed decision to choose a fund that matches their investment objectives and risk tolerance upon knowing the key elements of the fund. The  prospectus is usually  valid for one year, thus get the most recent prospectus.

Investment objective



All mutual funds are managed based on a specific investment objective. That objective will determine the role a specific fund will play in your portfolio, and how well it might fit with your overall investing strategy. The investment objective determines what types of stocks the fund's manager may decide to purchase. A fund may be broadly based, investing in both large- and small-cap companies in many different industries. Or it may have a much narrower focus, concentrating only on blue chips, for example, or stocks in a single industry.  Typically, mutual fund's objective will be either capital appreciation, income from equities/bonds, or both. For example, a equity fund might have both growth and income as objectives, or its primary objective might be capital appreciation, with income as a secondary objective. 

In addition to pursuing a fund's investment objective, a fund manager may adhere to a particular investing style. For example, a growth fund focuses on stocks that are growing quickly and that seem to have greater than average potential for appreciation in share price. By contrast, a value-oriented fund buys stocks that appear to be undervalued by the market relative to the company's intrinsic worth. Each may have growth as its investment objective, but they pursue growth in different ways. Some managers even blend the two approaches