mutual fund

							Mutual fund
Keeping money in the bank will not make you rich. Many
people still think that putting all the money in saving or
fix deposit are the safe way. Ya, it may be safe physically,
but your money in the bank only earn you 3% p.a( in
Malaysia), and Malaysia inflation rate per annum is more
than 3%. That mean you are in the risk to keep your
money in bank. Your savings will depreciate year by year.
There are many ways to do investment, buying shares,
invest in buying house, invest in business, invest in gold,
mutual funds, etc..
Today I will share about mutual funds, many people are
not familiar with mutual fund. Before you start to invest
in mutual fund, you have to understand what is mutual
fund and how it works.
Mutual fund is a pools of money by many investor and is
manage by fund manager into specific securities ( stocks
or bonds). When you invest in mutual fund, you
becomes a shareholder or unit holder of the fund
because you are buying units of the mutual funds. With
mutual funds, you can purchase stocks or bonds with
much lower trading cost because of the pooling money
together in a mutual fund. It is cost efficient , easy to
invest, and you can diversified your investment by mini
minimizing risk and maximizing return.
Diversification means spreading out the money you
invest to a different type of investment. If you are buying
stocks alone, you need to buy few stocks in order to
diversified your investment. But with mutual funds, it will
automatically diversify in a predetermined category.
Other advantage of mutual fund are as below:

  •   Daily liquidity
  •   Professional investment management
  •   Ability to participate in investments that may be
      available only to larger investors
  •   Service and convenience
  •   Government oversight
  •   Ease of comparison
Investment could be very easy if one know to buy at low
price and sell when price goes up. But no one can predict,
timing the market is impossible.
 One of the ways to ride out the ups and downs of the
constant volatility of the stock market is to use dollar cost
averaging. Dollar cost averaging method ensures we are
benefit from the historical strong returns shown in the
long run and hedges the effects of retracement and slight
downtrend in the short term.

Dollar cost averaging is an investment technique intended
to reduce exposure to risk associated with making a single
large purchase by investing a fixed amount on a particular
investment (such as unit trusts) at regular intervals (either
monthly or quarterly), regardless of the unit price. For
example, you can choose to transfer $500 to$1000 from
your account to a unit trust fund or you can even make an
auto debit to transfer the money from your account to
invest in mutual. The amount and frequency of your
investments depend on your financial means and future
goals.
Consult the nearest bank or agent for mutual fund and
start invest in mutual fund now…