If you are considering investing several personal finance choices, you must have considered putting your money into a mutual fund.
Well, what exactly is a MUTUAL FUND?
Mutual Fund is a group of selected stocks/bonds that are professionally picked by the fund manager. That's good news for amateurs since they do not need to have vast financial knowledge to pick the stocks/bonds since your fund manager does it for you! It is also very well known as unit trust, here in Malaysia.
The GOOD stuff
1) Diversified - You can discuss with your fund manager to assess your risk tolerance so that he could choose the right picks for you!
2) Peace of Mind - Assuming that our funds are managed by financial experts, we could at least have some ease of burden.
3) Since inflation rate is about 3%-4%, it doesn't make sense to invest in FD, therefore the best bet would be Unit Trust (less risky than stocks, but higher dividend pay than FD)
*I have read Irwan's blog and found this tip very useful:
The Dollar Cost Averaging (DCA) theory suggests that smaller numbers of shares will be bought when the cost is high, while larger number of shares will be bought while the cost is low, thus reduce exposure to risk. However, research has shown that investing a lump sum according to DCA principles generally results in worse performance as compared to investing the entire sum at one time (Constantinides). -Wikipedia
For next blog, I wish to compare and contrast Mutual Funds available in Malaysia. Hope you enjoyed my blog and HAPPY INVESTING, FRENZ!
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