3 Myth in Unit Trust Investment

Myth No. 1 - Unit Trust is Short Term and Speculation Based

Ramai tend to treat unit trust like stock moving in or out, and tunggu masa sesuai to buy low and sell high. Salah satu roadblock terbesar investors adalah IMPATIENT atau pun KURANG SABAR. Always translated that impatient investors macam those impatient drivers on our roads. These drivers always drive recklessly, always mindful of what the other lanes are doing and switch lanes and cut in front of someone else without fail to annoy other drivers. Yes, they might save few minutes but they don’t aware of the dangerous behavior resulting from the IMPATIENT manners.

Translate that into investment terms and you will have investors who like to take on too much risk for uncertain goods.

Unit trust (especially equity funds) is always about a long term investment.  Kalau tak ready untuk bersabar, for at least 3 years, or more then you are playing a loser’s game. Investors yang tidak sabar juga boleh jadi an easy prey. Mereka senang dimanipulasi, easily change lanes, and change lanes again, and these changes and new fund will always given inadequate time to perform. Always switching fund is costly, if you are aware in this industry.

For those investors yang always 24/7 looking and watching the market, you should have better things to do or even looking for other investment opportunity for the next 5 or 10 years.

Investors  yang sabar mungkin kelihatannya boring, tapi merekalah yang dapat tidur nyenyak sepanjang malam dan boleh tumpukan perhatian mereka pada benda lain dalam life.

2. Myth No. 2 – Cheap is better

The lower the unit price, the better the investment. FALSE.

Fund performance does not depend on the fund price, but strictly depends on how the underlying assets held by the fund perform.

Fund A unit price at RM2/unit.

Fund B unit price at RM0.50/unit.

Assuming both funds invest in the same stock markets and the minimum investment amount for the both funds is RM1,000.

This means you are investing RM1,000 in either funds and you will have RM1,000 value of stocks.

So when investing, price really doesn’t matter.

3. Myth No. 3 – Unit Trust Fund is too Expensive

Bab ini kena cerita pasal struktur unit trust company and other related party which can be summarized in this table.

The is over and above the entry fees, ranging from 5.5 – 6.5%.

Hakikatnya jika seseorang tu nak melabur sebagai seorang individu, kos dikeluarakn adalah lebih banyak.

Kalau melabur bersama Kenanga, entry fee dikenakan untuk pelaburan equity RM10,000 baru RM521, compare dengan pelaburan individu seperti table di atas.

You are actually paying for a professional manager at an inexpensive price to manage the investment for you. The fee that you pay is to appreciate the fund manager who takes time, effort and his expertise doing research stocks and sectors to pick the best 30 or 50 stocks and buy and sells them for you.