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Before investing, decide what you want your
investments to do. Investing is simply using money to make more money.
Investment ringgit are not meant to be used for daily living essentials. You
might choose to invest in bank deposits, government bonds, securities, or
life insurance. They are all different, and no single investment channel
fits the needs of every individual. Neither can a single financial product
fulfill all our needs at different stages of our lives. Since most unit
trusts or collective investments limit their investments to securities, let
us explore some of the reasons why investors, both institutional and
individuals, might want to own a unit trust.
Many prefer unit trusts because they are easily
bought and sold. They represent variety and flexibility of returns. Unit
trusts can be bought at varying prices, from very low to very high, and
small amounts can be invested at convenient intervals. Unit trusts can be
selected, often with excellent results, by having limited investment
background. When investing in unit trusts, investors can profit in two ways.
They may receive distributions. Since the market value of unit trusts
fluctuates, investors also profit when selling their unit trusts in the
event of substantial or marginal increase in value. However, fluctuation
also means the value of your unit trust can go down in value. That is why
unit trusts are recommended for medium to long-term investment programme.
Regardless of which unit trust is selected, it should meet the investment
goals. A basic rule is that it should not be done on impulse.
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