2007/04/24

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KUANTAN: The Securities Commission has released an alert to educate the public on ways to recognise illegitimate Internet investment schemes.

In a pamphlet available to visitors at the Permodalan Nasional Berhad’s Malaysian Unit Trust Week, the SC outlined the characteristics of an illegitimate investment scheme.

For example, they may offer investors a scheme that guarantees enormous returns without posing any financial risk to them.

They also tend to assure investors that they will receive returns as high as 30 per cent per month.

The company’s contact address may be based in countries where investors would be unable to ascertain its validity and status.
Investors would also find it difficult to find information on the company’s licence or of its existence in the webpages of any authorities.

Some may claim that their activities do not require a licence or that their licence was issued by another country.

Their offers are also available for a short time. They will also come with instructions to wire the money to a foreign bank account.

The SC also warned the public that the web pages may be designed in a professional manner to mislead investors, complete with details such as the latest share prices, market commentaries, market news and links to other financial web pages.

It added that should indiviiduals become involved in recruiting others, they could be found guilty of propagating illegitimate investment schemes.

NST Online » Frontpage

2007/03/12

Where will you will be when you’re 64?
Get a head start for twilight years

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A life of comfort and good health in retirement is not beyond the average Malaysian executive despite cases of some who ended penniless after wasting their Employees’ Provident Fund savings in poor investments. Financial experts say prudent investments in sound financial instruments can yield handsome returns in old age. ANIS IBRAHIM, SUGANTHI SUPARMANIAM, HEIDI FOO and PRESENNA NAMBIAR have the stories.

CAN a 35-year-old Malaysian executive earning about RM4,000 a month afford a comfortable lifestyle after retirement at 55?

This is a question often on the minds of those on the threshold of middle age but which seldom yields a definite answer.

Yes, it is possible to live the same lifestyle in 20 years’ time but it is going to cost a bomb.

One will need to have between RM1.4 million and RM2.8 million at retirement to maintain the same lifestyle depending on which financial planner one talks to.
Besides inflation, which will reduce the amount of items one can buy in 20 years with the same amount of money available today, there is also the astronomical cost of medical treatment in old age.

Malaysians will have to bear much higher medical costs in the twilight of their lives, especially so in the light of the longer life expectancy of Malaysian men and women of 72 and 76 respectively.

Despite the frightening prospect of not having enough money in old age, there is still good news for most: Good financial planning can ensure a problem-free retirement.

The first step to take is to realistically identify the lifestyle one wants at retirement and work towards attaining it.

The next is to identify the financial instruments to be used to accumulate between RM1.4 million and RM2.8 million by 2027.

Integral to this would be the savings one accumulates with the Employees’ Provident Fund — about RM500,000 for the person earning about RM4,000 at 35 years of age.

Financial planners suggest several ways of going about this including investing in the stock market, unit trusts and property, saving money in the bank and buying an endowment insurance policy.

But how much should one invest to live comfortably after retirement?

Some financial planners say one should put aside a third of the monthly income — or RM1,300 for a person taking home RM4,000 a month — for investments.

Others say 20 per cent would suffice if one cannot afford more.

While these may hold promise of a rosy future, there are unexpected pitfalls for the unwary, including the vagaries of the stock and property markets and the general economic condition of the nation.

For those who cannot expect as much monthly after retirement as they did while working, the EPF suggests that they work on estimated monthly financial returns of 40 per cent of their salaries.

This is based on the International Labour Organisation’s (ILO) “replacement rate” for salaries after retirement.

EPF officials say that while 75 per cent would come from their EPF savings, Malaysians would still have to depend on other sources of income for the rest.

Developed countries like the United Kingdom and the United States apply a replacement rate of between 60 and 75 per cent of the average monthly salary.

All told, the average 30-something Malaysian in the private sector cannot depend on his EPF savings to ensure a comfortable lifestyle in retirement.

You can also post your comments on www.monsterblog.com.my.

Opinion

Saturday August 12, 2006

NO INVESTMENT is without risk. You cannot get higher rates than that given by a bank without some risk. 

All unit trust investments must be monitored by the investors weekly. 

As soon as they have accumulated to the desired amount, the unit trust should be sold. 

It is not true that we have to leave the unit trust for a few years to see some dividends. 

Remember, fund managers make money for the company they work for. Without your funds they will have no work. 

L.B.L,  Petaling Jaya.  

Sunday September 17, 2006

BY SIMON KHOO

PEKAN: Malaysians should start to master the art of wealth creation in tandem with the country’s progress, said Deputy Prime Minister Datuk Seri Najib Tun Razak. 

Saying that the time had come for the people to seek economic independence by making smart investments, he urged them to learn to manage their financial resources to gain more wealth using a first-class mentality. 

“Having political power without economic independence will lead us nowhere,” Najib said. 

In this regard, he added, the Government would ensure a fair and equal distribution of wealth through institutions like Permodalan Nasional Berhad (PNB). 

“We will look after the rights of the bumiputras but at the same time, the rights of others will not be taken away,” he said during the opening of a PNB public awareness exhibition at the Sultan Ahmad Shah convention hall here yesterday. 

Najib said the Government would support the efforts by PNB in raising the equity of bumiputras from the present 18% to between 20% and 25% in 2010. 

The present RM60bil in funds held by PNB, he added, showed that it had been managed efficiently. 

“The Government will ensure PNB’s continuous success and is confident it will reach RM100bil over the years with new products,” he said. 

Najib said the people should start to find ways to increase their wealth by investing part of their income. 

Citing an example, he said those who have made an initial investment of RM10 in 1981 in one of the unit trusts and re-invested the annual dividend could have a present balance of RM2,700. 

“Imagine the situation if the investment amount had been much higher,” he said. 

Najib also announced that the PNB Unit Trust Week would be held in Kuantan next year.  

Monday October 16, 2006

BY YEOW POOI LING

YOU have RM500,000 cash in your bank and an array of investment managers, financial advisers and other intermediaries offering you a huge variety of investment options. 

How much return do you want? Capital guaranteed? Which markets do you want to invest in? Is it a good time to buy or sell certain equities?  

The decisions could be endless and daunting to many investors, said S&P NetWorth Advisors Sdn Bhd chief executive officer Paul W. Chan. 

He said there were mainly two sources of ideas for investment decisions – external and internal.  

External sources include current news, for instance high oil prices, events such as the North Korean nuclear test, magazine articles and brokers’ recommendations.  

The internal-source investor, on the other hand, focuses on his own financial needs and a personalised long-term strategy designed to meet those needs. 

His buy or sell decisions are based on what is required to ensure that his financial holdings are in accord with the game plan.  

“Investment professionals are only used to assist in executing decisions already made. Thus, current market fads, trends and so-called expert opinions are largely irrelevant to such investors,” Chan said.  

He said investment decisions were unlike other consumer spending decisions, which could be influenced by marketing and advertising activities.  

One frequently asked question is a variant of “Oil prices and gold are sky high, and I’ve read that many experts are sounding an alarm about stocks. Should I sell my funds?” 

Investor decisions on whether to cut stock holdings would depend on the market’s volatility, what the business magazines say or the direction of the interest rate regime, Chan said.  

“External sources will never tell you whether it’s a ‘good’ time to sell stocks as no one knows what the market will do in the coming months,” he added.  

While current events might provoke a review of one’s personal list of questions, they should not dictate the answers, Chan said, adding that investors should take ownership of their investments.  

“Watch out for the high entry cost of investment, understand its goals and time-horizon, the investors’ risk appetite, their age groups and portfolio diversification. Have a simple personal checklist to jumpstart towards investing with peace of mind,” he said. 

Singular Asset Management chief investment officer Teoh Kok Lin said investment products that used to be exclusive to certain investors were now “brought to the level of the laymen given market liberalisation.”  

For example, retail investors could now invest in commercial properties – which were not so easily accessible in the past due to the high capital required – via real estate investment funds (REITs).  

“Such a trend pushes investors to learn faster and adopt a better investment habit. While volatility risk is always present, investors have to understand their own risk appetite and improve on where and how to put their money,” Teoh said.  

Aseambankers Malaysia Bhd chief executive director Surachet Chaipatamanont said products were “retailised” for better accessibility and this included Islamic offerings.  

Islamic products are offered across the board for retail investors. The breath and depth of the market allowed “investors of all types to be offered Islamic alternatives,” he said.  

Chaipatamanont added that Islamic products, compared with conventional ones, provided more competitive pricing and “in most cases, higher returns.” 

HLG Asset Management chief executive officer Richard Lin Kwok Wing said the investment options for a fund of RM500,000 could include equity based unit trusts, bond based unit trusts and balanced funds.  

Hong Leong Unit Trust has 19 unit trust funds under its management, offering a diverse product range including a selection of syariah-compliant unit trusts, growth funds, equity funds, balanced funds, sectoral funds as well as bond funds. 

He said diversification was essential for any investment type to enable investors to customise the investments according to their objectives.  

For example, an aggressive investor could have higher exposure to shares and lower exposure to bonds and money market instruments while an investor with moderate risk could opt for a very small degree of exposure to shares with bonds and money market comprising the bulk of their portfolio, he added.  

Lin said investment decisions would depend on three factors - first, the risk appetite of the individual. “Risk averseness of investors varies in accordance to their age, income and marital status,” he said. 

Second, the investor’s investment objectives would be taken into consideration, emphasising the creation of value, return or growth. The third factor would be the investment horizon – the investor’s short, medium or long-term goals.