You can practice dollar cost averaging with your EPF money in unit trust investment

Besides regular investment and regular top up when fund price is low with your hard earned cash, there are ways to practice DCA with your EPF money in unit trust investment:

1) Move your eligible EPF money into a bond fund, then give an auto-debit instruction to the UTMC (Public Mutual for instance) to transfer designated amount to selected equity/balanced fund in monthly basis

• Pros - while you may gain moderate return from bond fund, you enjoy the benefit of DCA the same time
• Cons - addition cost incurred (eg. o.25%) for moving the EPF money into bond initially (on top of the standard 3% service charge for transferring the money from bond to equity/balanced fund)
  

2) Move your eligible EPF money into a bond fund, then switch the desired amount into selected equity/balanced fund when the equity/balanced's fund price dropped to the desired level

• Pros - while you may gain moderate return from bond fund, you enjoy the benefit of buying equity/balanced fund units at price that you desired
  
• Cons - besides addition cost incurred (eg. o.25%) for moving the EPF money into bond initially (on top of the standard 3% service charge for transferring the money from bond to equity/balanced fund), you may have to pay an additional RM 25 for each transfer (disregard of amount transferred) from bond to equity/balanced fund unless you are a Mutual Gold member of Public Mutual

So next time if you bumped into an agent telling you that you can only invest your EPF money into equity/balanced fund in lump sum.....BEWARE!!

DCA (Dollar Cost Averaging) or not DCA

For those who have ever listened to investment talk from mutual fund/insurance agents will definitely hear about the benefit of DCA - meaning investing a fixed amount of $ in regular (monthly) basis into mutual/investment linked fund.

As most will find it a compelling reason to practice DCA, some savvy clients would want to find out more (especially the disadvantages of it) about DCA before making their decision.....of course that's your right to do so since its your money!

I happened to stumble across this article about the disadvantages of DCA as I prowled thru the web , and can't help to give my views about it....

1) There is no doubt that regular investment does not work as good as lump sum investment when the market is up constantly - meaning your regular investment would grab lesser units as the fund price keeps going up. However, as we know such market does not exist in any part of the world.

2) Investing randomly will sure give you a better return if you can monitor your fund price and share market everyday, yet have the time to drop by at bank any day to top up your investment when price falls.......sadly, as we know even house wife don't have time to do it these days!!

3) Regular investment guarantees the worst return for investor that can time the market....unfortunately even Warren Buffet can't time the market.

As much as I disagree with the author's views about regular investment, I can't help but agree on one statement in the article - "However you do it, investing is better than not investing."

So happy investing....(especially with me)

Hmm.....everyone (of course, those who pay attention to development of world economy) seems to wonder if Asian economies will be hit hard as US is at the edge of recession (or already in).

Of course there will be impact since US economy is 25% of world GDP, but the degree would be much lower compared to the previous US slowdown....read this article!

As I approached my clients in investing into mutual fund lately, I've been constantly hearing this concern - "market is very volatile now". As I totally understand the fear in most investors of losing their investment in this up-and-down market, there are ways in protecting your investment or even make a good fortune when market rebounded.

Remember the golden rule - "buy low, sell high"; as simple as it sounds, many just fail to practice it.......including myself at times

Quote of the Day:-

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” - Warren Buffet