Sunday, November 23, 2008

Stock Trading - Taboo for Malays Discussion (Part 2)

It is hard if not difficult to find Malay peers that really do the monthly budget and serious investment-related things. Most of those I met never bothered and much not interested into doing well-planning of how they want to ride their money in a particular month. When it comes to investment, they DO NOT KNOW what to study about. Their investment was made because their friend did and they were just following suit.

Talking about stock trading is pretty much a taboo thing and tends to be associated as the game of the rich and only super-genius can trades in the stock market. If it is hard to see one to cracking his head for monthly budgeting, asking him about stock trading portfolio would certainly made you a fool to be the least.

Walking through with friends from many walks of life and of course holding good careers made me learn many things. Their idea of how to manage their money and their investment roadmap interested me the most. Out of roughly ten, I can get seven who never do the planning while their idea about money is spending it because you earned it. It may be true to some point.

Their true investments are somehow being in the EPF, nice shining car, expensive furniture in their rented apartment, and one good thing to hear: Unit Trust. At least they know about unit trust, sighed!

The only thing that amazed me on their understanding regarding unit trust was their thought that unit trust is a pure and top priority investment for everyone, or so they believe. Thanks to numbers of unit trust consultants. But don’t stop there, we need to know what was the fund they are into. I was bedazzled when they told me they bought the fund because their agent said it is the best in the market and they are relying hundred percent on their agent to buy or doing switching if necessary, on their behalf. They seem not knowing the type and what is their fund investing into (though not all).

Then I shared with them my experience on how I had widened my investment horizon into stock market trading. One big question slapped onto my face, and best to note was that it happened many times and things that made it painful, was when a unit trust consultant asked me the very same. It is a big thing for me, however, “How much losses have you made in the stock trading?”, until now. To them, trading in stock market is pretty much like gambling, thanks to Pak Man Telo who had helped to embedd that idea into the Malays. Trading in stock market will only come to one final point: LOSSES!

When tough gets going, going get tough. Because I heard the question too many times, it made me weary of it. I don’t mind telling them that now I had made two digits percentage in realised profits and taking home dividends from big company. A byline I would never forget, “While you keep your money in a particular bank, I owned a number of that bank shares. While you guys being their client, I am being one of its owners (shareholders), though tiny it maybe. While you guys get the small dividend for your saving, I got fatter for 2 to 3 times a year.”

A friend who also happened to be an agent rebutted, saying that unit trust pretty much do the same and unlike direct investment to the stock market, it reduces the investment risks by leveraging into multiple counters. That is true and I don’t deny! But, having to learn myself and encountering new things are very much interesting, what is life without learning and ability to take risk. To give her one fancy answer, “I also invested in the same counter as the unit trust did, though not all, but I chose few that have sound yielding-dividends”. On top of that, my investment in stock market has strict judgment after some deep research. It may not be easy to make stock picking decision and it also requires time to do research, but it worth it. I reap the dividends 100% to my pocket unlike unit trust that requires entry and exit fees as well as management fees.

I am not against unit trust fund as I myself segregate my cash and cash-like yieldable assets to score of at least 15% into unit trusts, but I also put another 70% in stock market. I’m riding on two horses.

Global financial crisis that started on the side of the globe but affecting us gave me chances to root-in deeper as many more counters that previously sold at incredibly high prices now being discounted. The factor that attributed to the downward spiral of the markets was due to a loss of confidence among investors, and not because of fundamental issues.

To be an investor, instead of speculator that follows herds, one must have a strong faith in one’s decision. Stock market has many uncertainties that human can only predict. At tumbling time, the price of holdings may be reduced to halves and you may seem like those are losses. But, history has shown that markets were and do recover over time.

Been a speculator myself and made losses in the past, I am now morphing to someone I am comfortable with, an investor. That means my horizon is far wider and my targets are far bigger with certain aspects of criteria to look at.

Monday, November 17, 2008

Harga Runcit Bahan Api di Malaysia

Graf Harga Runcit Bahan Api di Malaysia
Februari 2006 - November 2008

Ramai rakyat Malaysia berbelanja melebihi pendapatan

Ramai Rakyat Malaysia Berbelanja Melebihi Pendapatan

KUALA LUMPUR 17 Nov. - Sebahagian besar rakyat negara ini berbelanja lebih daripada pendapatan tahunan mereka untuk membeli produk yang bukan merupakan barangan keperluan asas.

Menurut kajian Indeks Keutamaan Pembelian Pengguna yang dijalankan oleh MasterCard Worldwide, sejumlah 79 peratus rakyat Malaysia berbelanja lebih 10 peratus daripada pendapatan tahunan mereka atas barangan seperti kasut, pakaian dan aksesori manakala 15 peratus membelanjakan lebih 40 peratus daripada gaji tahunan mereka untuk barangan yang sama.

''Kira-kira 59 peratus akan dibelanjakan untuk tujuan hiburan dan makanan, 49 peratus untuk pelancongan dan fesyen manakala 42 peratus dihabiskan pada aksesori untuk tempoh 12 bulan akan datang,'' demikian menurut satu kenyataan di sini, hari ini.

Kajian itu juga menunjukkan 70 peratus pengguna di rantau Asia Pasifik akan mula mengehadkan perbelanjaan mereka terhadap barangan sebegini pada tahun hadapan.

Hiburan dan makanan merupakan yang paling utama dalam perbelanjaan pengguna di 11 daripada 14 buah negara di Asia Pasifik kecuali di India, Korea dan Filipina yang mana kebanyakan pendapatan tahunan mereka dibelanjakan bagi pendidikan anak-anak, tambahnya.

Taiwan, Filipina dan Korea didapati antara negara yang akan mengurangkan perbelanjaan mereka berbanding New Zealand, Australia dan China yang menunjukkan sikap daya tahan pada tahun hadapan.

Kajian tahunan yang membabitkan kira-kira 6,019 pengguna di 14 buah pasaran di Asia Pasifik dibuat sepanjang September lalu.

Dari segi jantina pula, 69 peratus pengguna lelaki didapati kurang cenderung untuk mengurangkan perbelanjaan mereka berbanding wanita yang akan mengehadkan 71 peratus perbelanjaan mereka.

Golongan yang berusia 30 tahun ke bawah juga didapati kurang cenderung untuk mengurangkan perbelanjaan mereka berbanding mereka yang berumur 56 tahun ke atas.

Utusan Malaysia

Sunday, November 16, 2008

Dilemma For EPF Contributors

The Star Online> Nation
Sunday November 16, 2008

Dilemma For EPF Contributors

KUALA LUMPUR: More money to use now means less for one’s retirement. This is the dilemma Employees Provident Fund contributors face should they decide to opt to have their monthly contribution reduced from the mandatory 11% to the “voluntary” 8%.

The government’s decision to adopt this measure to help Malaysians tide the rise in prices of goods and services and the economic downturn is heartily welcomed by those in the lower income group and struggling to pay bills.

But there are many who prefer to stick to the 11% deduction and tighten their belts momentarily.

This group is also irked by the “burden” of having to fill up an EPF form – those who do not will be deemed to be agreeable to contributing 8% for two years effective Jan 1.

Under the new scheme, a 35-year-old employee with a RM3,000 monthly salary would be able to take home an extra RM90 in his monthly pay packet, which amounts to RM2,160 over two years.

However, assuming that a 5% dividend is paid out annually with the compound element over a period of 20 years until he turns 55, he will be RM5,500 “poorer” when he retires.

If his monthly income for the next two years is RM5,000, he would lose out on a total savings of RM9,200 in his EPF upon retirement.

As it is, the EPF has raised concerns about Malaysians not having enough savings to see them through 20 years past retirement, much less lead a comfortable life.

In a study by the EPF last year, the average contributor has only RM106,000 in his savings while one would need a projected sum of about RM747,000 (taking into consideration inflation rates) if one were to live for 25 years after retirement.

Wednesday, November 12, 2008

Stock Trading - Taboo for Malays Discussion

Everybody wants to achieve every good thing in their life and certainly there are many ways to get to it. But one thing that no one disassociates easily would be money. Out of many things, financial freedom would be one of the utmost things anyone will be looking seriously.

History shows that not every freedom recognised to shed on its own, this is also true to financial freedom. It requires more than one can just give: ones’ life!

This topic which I am comfortably call it as Financial Management has so many things that no one can put a grasp and put a direction in a single projection. It may be difficult at one point as stressing will appear as if it is much bigger that you can plan.

I am pretty much sad, when I talked to friend about their financial management and pathway to financial freedom (or for better retirement day), they are solely pointing to their car and putting expectation that their EPF (Employees Provident Fund) alone will be enough. Or some come to the answer, “I’ll live within my means; later!”

Without a proper plan, I don’t think it would be easy. No, I am not being negative.

Financial planning is about perseverance and timing. It is better to be early than to be late and to see nothing to be reap off. Regrets will never change anything.

Not long, that I am diversified into stock market and trading a number of counters, I see many more potential to double my assets holding in this class. It may not happen today, but it will eventually grows overtime. I had reap price appreciation and also receiving good dividends pay-out.

Aware that my Malay friends are not well exposed to the nature of stock trading, I tried to share useful information on how to track good counters and sharing my experience. Not to boast myself, but to instill an "awaken" for them to look into that class of asset creation that they might want to go and consider for.

Yet, the desire never lasts. One came to me to tell, “Hey, do you see that today’s market went down?” and what is more can I answer other than, “I do and I fact I picked-up some good counters.”

I saw that their interest to learn fade as time goes by and only later when I told them about other benefits I received; dividends or free extra units then they asked me how I did that again.

To me, knowledge is about sharing because there are days someone will share with you something new that you don’t know. But, seeing thing, my efforts to share about stock trading knowledge wore thin. Now I have come to my conclusion, if they want to learn something, they better go out and find themselves and I don’t have to raise about financial management, it doesn’t sounds like Malays!

... to be continued.

H. Shahirasul Idrewoods

PS: This is based on my experience, it supposed not be judge in specific view or be imposed into general subject.

Thursday, November 6, 2008

EPF Contribution 3% Reduction : Is It Wise?

Read in the news today, EPF will "enforce" automatic 3% reduction over employee contribution. From my point of view, I don't see this would be any wiser, besides it's contradict to what Najib had mentioned earlier - the reduction will be on employee's decision, not to be automatic.

Living in Malaysia and learnt much about their habit, the purpose of contributing to EPF will a little bit off path. Many researches show that more than half of Malaysian population does not have enough saving for their retirement. Contributing factor would be due to less of saving.

By giving the "extra money" which was forked out from the pocket and put on the hand of the very person - I don't see any interesting part here. It is not "new" money received anywhere else, but from ones pocket itself. And having the extra money, will not help much in the environment that customer's buying power is pretty low.

The sudden of nearly half increasement of fuel prices, then followed by stages of small price reduction is pretty much unfair. While the world oil prices has put break and goes below the line, government should be proactive to reduce and meet the rate of market.

Looking back at the automatic reduction once again, mind you the 3% automatic reduction will be NOT be tax-exempted. How creative our government!