The Sun Tuesday September 9 2008 - Share your utmost reasons why unit trust is your preferred investment choice.

A1: Lee Tze Yan, Puchong

I believe we should always allocate our income so that we will not overspend on unnecessary things. Therefore, it is necessary to allocate an amount for monthly expenses, savings and also investments. By doing so, we automatically commit to a regular investment plan without having to fork out a lump sum of money at one go.

Investing in unit trust funds is a much safer option compared to buying stocks. This is due to the diversified nature of its investment allocation into local, foreign stocks, other asset classes and various investment instruments which can provide investors with a more acceptable investment returns based on the risk reward factor.

Another reason why I prefer unit trust funds is because when funds perform well, I can enjoy additional gains in the form of income distributions. Also, there is potentialto benefit from unit trust funds as compared to a conventional savings account or fixed deposit due to its ability to invest in other unique financial instruments which translate to higher returns.


A2: Michele Lian Fu-Ching, KL

My approach to savings and unit trust investments is a methodical one: I deducted a fixed amount of money from my salary for my monthly expenses, and the rest is divided almost equally between savings and investment in unit trust funds. I track my spending regularly by writing down how much I spend, and on what, so I know where my money goes. This has mad it easy for me to work out monthly budget. Also, by sticking to a budget, I make sure that I spend no more than 35% of my monthly salary, which means that I get to save and/or invest most of what I make.

As for my unit trust investments, I take the cost averaging approach by having the bank deduct a fixed amount each month, so will not be tempted to make hasty decisions when the market dips or shoots through the roof. Now, with the market on a downward trend, I am buying more units than usual, which means I may end up with potentially significant gains when the market recovers. Because I am planning to invest my money over a period of 10 to 20 years, I am confident in the potential success of my investments. In addition, I spread my unit trust investments over a range of funds that invest in different types of assets so that I do not put all my eggs in one basket.

I also ensure that I have at least 12 months’ worth of expenses in an emergency saving account in the event that I have to stop working, or am not able to, temporarily. To boost my savings, I simply work more. Through my freelance work, I get paid at least an additional RM100 a month, which I use to grow my emergency fund or investments further.