The Sun Tuesday August 26 2008 - What is your best advice on how to choose a Unit Trust fund or to begin investing?

A1: Chai Sok Ling from Petaling Jaya

Everyone should have a financial plan. Unfortunately, due to limited options in the past, most people still have doubts and continue to prefer fixed deposits. However, we need to change our mindsets, be flexible and willing to explore new investment options available. Through personal experiences, unit trust still remains my favorite investment choice though I have invested in stock market, fixed deposits, insurance and others. Everyone has to start somewhere and my research on unit trusts has led me to the following conclusions:

1. Identify your financial goals, initial investment and your target return on investment
2. Broaden your investment knowledge by reading up and doing your homework
3. Have a regular saving plan (e.g. monthly)
4. Constantly evaluate your investment portfolio according to your objective
5. Acknowledge the risks involved

It doesn’t bother me that my unit trust funds have not been performing well due to market uncertainties. Instead, my investment strategy is to buy more funds at lower prices as price averaging plays a vital role in the overall returns. When the economy picks up, I will be able to sell at a higher price as long as it does not tamper with my investment objective.


A2: Jolly Lee Shiat Mei from Bintulu, Sarawak

To me, saving and investments are not supposed to be rocket science. If you want to save, the rule of thumb is to pay yourself first before you pay others. So, mathematically, EXPENDITURE equals to INCOME minus SAVINGS/INVESTMENTS (INCOME - SAVINGS/INVESTMENTS = EXPENDITURE). Spend only after you put aside your savings and investments. If you are not disciplined enough, incorporate forced savings into your monthly regime; for example have a fixed ampunt automatically paid out from your bank account into saving plan or investment vehicle at the beginning of every month.

To invest in unit trust funds, first, identify the type of investments according to your objectives, risk level, time horizon, amount to be invested and return targets. Most importantly, stick to the original objectives despite receiving numerous tips or advice later on.