Investment Behavior during Market Bull Run!!!

For those invest in shares, we will familiar with Investment Guru Mr. Warren Buffett, one of his quote "You only have to do a very few things right in your life so long as you don't do too many things wrong.”

2008 KLCI reach the highest points around 1,500 and lowest around 800, in drop 46% in 10 months time from the top. This is a huge different, if base on today KLCI around 880 to achieve 1,500 it need to increase around 70%.

Back to Warren Buffett quote, we only have do a few things right such as sell the stock at the peak point and hold the cash, and wait for the right timing.

More worse is, we buy the stock at the peak point, at that time we can see a lot of stock transaction even the housewives, students, pensioner, small businessman and etc went to "invest" shares. More crazy is, the housewives after went to wet market also rush to securities firm just to buy shares. They just speculated the stocks, they may not even know what stocks they bought, they are so happy that time because they are making money at that moment. After the shares start to drop, they still longing that the stock may go up again. Until reach the certain level, they started to complain that shares can not buy and come out a lot of their own terminology. Just want people to agree them, that we should not buy shares.

Will those claim themselves as investor repeat their "investing" style once again in the future? Or will there more and more people behave like them, buy stocks while the stock reach the peak?

We understand the theory of, while people is greedy for the shares we should sell it, while people is fear for the shares we buy it. Beside that, we should also look at the fundamental of the shares, are the company in healthy conditions?

After we understand the theory, how do we execute it? Your action affect your destination.

Happy Investment!!!



Reference / Source :
1) http://www.bloomberg.com/

1 Billion New Units of ASW 2020

Recently Amanah Saham Nasional Berhad (ASNB), wholly-owned subsidiary of PNB opened for subscription one billion new units Amanah Saham Wawasan 2020 (ASW2020).

ASNB said in order to maintain the fair distribution, maximum investment of 10,000 unit per account holder for the new subscription of one billion units. ASW 2020 is a fixed price unit trust that open to all Malaysian which six months and above are eligible to invest , it subject to the quota of 51% bumiputras and 49% non-bumiputras.

This ASW 2020 become quite a hot topic among the family members, friends, colleague, housemates & etc. Malaysian perception is, this unit trust is at the fixed price and the distribution from year to year is better than "FD" interest rate. If I have extra money, why don't I put in inside ASW 2020. That is the reason why I also invest on it.... hehe..

From ASNB website it mention that, ASW 2020 objective is "to provide reasonable level of regular distribution income to Unitholders from investments in a selected portfolio of authorised investment." And it categorise as equity fund and type as income.

The ASW 2020 distribution for the past few years as below:
ASW2020 return for 2006 - 6.80%
ASW2020 return for 2007 - 8.00%
ASW2020 return for 2008 - 7.00%

If benchmark with Malaysia bank FD interest rate is around 3.00% to 3.80%. ASW 2020 is much better than them.

Is this kind of investment benefits to the unit holders? If you ask me, I will definitly say "Yes". But are this kind of investment benefits all the Malaysian? This depend how you view on it. If a poor Malaysian, they not even have enough money to buy the house, nice food & cloth, car and etc do they have money to invest? :-)

As the recent annual report of ASW 2020 as at 31 Ogos 2008, they is 1,410 unit holders who own more than 500,001 and above units, which around 25% of the total fund, average around 1.4million units/holders.

If we take simple mathematics calculation , average around 9,836 units/holder for the whole ASW 2020 fund. From here we can see how big the difference between those rich investors and those average investors. Is this fair enough? Anyway this the the regulation set out by ASNB, like it or not is there.

Have you start to invest in ASW 2020?