CHOOSING THE RIGHT INVESTMENT FOR YOU

“Wealthy people invest first & spend what’s left and broke people spend first and invest whats left” Source: www.relatably .com

Which type of investor do you think you are? I guess if you’re reading this blog means that you belong in the first group.  There are many types of investment. I’m no expert in investments but through sharing with the people who succeeded (by investing the right way and manage to make their money work for them instead of the other way around) I can discuss some of the types of investment with you. There is no doubt that we need to diversify our investment as logical thinking tells us it will be safer than dumping all your money into just one investment. I will briefly explain about (my point of view) stock market, real estate, fixed deposit/mutual funds/insurance and of course gold.

Stock Market/Equity Market

Shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets. Investors will have ownerships rights depending on the percentage of shares bought. As investors we need to know the financial track records of the company(s) of interest to make sure we gain profit instead of loss. All this translate to high risk investment but done in a proper and correct way with professional guidance will ensure a good return of investment in relatively short period of time.

 Real Estate

Real estate investment need to have a huge bank account as deposit for say a RM 1 million building will be RM100k (usually 10% of the building price). 

In real estate investment we either buy property(s) to sell it later when the price is good (taking into consideration the real property gain tax rules) or taking part in real estate investment trust (REIT).  To be successful, one needs to have a good strategy and of course guts as it involves a lot of money.  

Fixed Deposit/Mutual Funds/Insurance

Fixed Deposit is more affordable with low investment risk but the investment return will be low as well.  For example the fixed deposit effective profit rate in Malaysia is 3.05% p.a. For a RM10,000 investment, quarterly payment will be: 10,000 x 3.05% p.a. x (4months / 12months) = RM101.6. Money make money…. If you have a huge bank account (more zeros) then you would get more return.

A mutual fund is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, other money investments. Money managers operated the mutual funds who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. Mutual fund can be short, ultra-short or long term investment depending on the investor.  

Investment-linked insurance combines investment and protection. The premium paid will be divided between insurance protection and investment fund. We must take note that the return on an investment-linked insurance is not guaranteed. This is because the price of the units that you hold may rise or fall depending on the market value of the investment. Maturity period ranges between 10 to 25 years depending on the terms and conditions at time of purchase.

Gold

The current market situations which I can say hostile towards investment made many people turn to gold as their wealth protector.  Gold investment is more affordable compared to the other investments mentioned and as we know gold is held up as inflation hedge investment.  Public Gold provide lots of opportunity for anyone interested to invest in gold. Through its Gold Accumulation Program (GAP) it allow us to buy gold for as low as RM100 or 1g gold whichever we can afford. Once we achieve our personal gold target, we can withdraw the gold into physical gold which we can keep. Gold market is easier for "non-investment-smart" person because what they or we need to do is just keep the precious metal until the price increase and then sell it to get profit. In view of the current demand in gold this wouldn't take long.

   Table: Comparison between different types of investments

Prepared by:

WAN MUHAMMAD YUSRI BIN WAN ALWI

PUBLIC GOLD AUTHORISED DEALER

PG00067660

Sms or Whatsapp: 012-8871702

wanyusri@gmail.com