Interested in INVESTMENT? Now many people dream to be financial free when they reached the age they are comfortable to retire or at the age they do not wish to work anymore. But the main question is, how to achieve this dream. In Malaysia there should not be any difference than any part of the world because the system is very similar in most way. In Malaysia here are a few ways where anyone can try to start their first journey into investing.
update Jan 2024.
1. Amanah Saham Nasional Berhad (ASNB) - Still the best for low risk in 2024.
ASNB (only in Malaysia) offer many investment opportunity/product which can suit anyone at any age. Below are the products which are offered by ASNB.
Some says that ASNB provides the best ever option in investing and i do agree as this product until now is the safest investment to date with a satisfying dividend return. Even with different dividend on each products, it is still higher than the conventional savings account offered by local banks. ASNB can work wonders when investors consistently invest and reinvest the dividend over time. This is widely known as compounding. I will explain more on compounding interest next time as we are focusing more on ways to put money for investment.
For those who are eligible to take ASB and ASB2, now banks are offering loans for the two product to take the opportunity of the high dividend offered by this two product. And let's keep this loan explanation for another story.
2. Mutual Fund - still can consider in 2024.
Mutual Fund generally is offered in many countries around the world but what iam going to share is mainly base on the example in Malaysia but the concept is similar abroad. Mutual Fund is a vehicle where anyone can put their money into a trust for a fund manager to invest in the market. Now you can use Employee Provident Fund (only in Malaysia) or by direct cash in. I will not promote any unit trust company but just to share options for those who are interested in diversifying their investment portfolio. It takes high discipline to invest in mutual fund on long term basis. But before you jump into this vehicle, do make yourself free to approach qualified unit trust broker to have more clearer view.
3. Fixed Deposit - still best option for Non Bumi in 2024.
Fixed deposit is an account where anyone can put their money at the minimum amount for a time period to enjoy the dividend after the service period. The interest ranges from 3% to 4% depending to the amount and period of keeping in. Even if the interest is much less as compared to ASNB and Mutual Fund but at least it is much better compared to keeping it in bank savings. And again i shall not recommend or promote any banks in this blog.
This three are for now the most simpler way for anyone to start their investment portfolio. Once you get this started then moving on with a more higher risk investment is the next step or even continue with more variety of product to expand your investment portfolio. I will consider to write in more details or even update this list in near future. Please and always remember not to put all the eggs into one basket.
4. Gold
Investing in gold has been a popular option for centuries, and it continues to be a significant asset in many investors' portfolios. However, like any investment, gold comes with its own set of pros and cons. Let's explore them:
Pros of Gold Investing:
Safe-Haven Asset:
- Gold is often considered a safe-haven asset. During times of economic uncertainty, political instability, or market volatility, investors tend to flock to gold as a store of value.
Diversification:
- Including gold in a diversified investment portfolio can help reduce overall risk. Gold's performance is not always directly correlated with other asset classes like stocks or bonds, providing a hedge against market downturns.
Inflation Hedge:
- Gold has historically been seen as a hedge against inflation. When the purchasing power of fiat currencies decreases due to inflation, the value of gold often rises.
Liquidity:
- Gold is a highly liquid asset. It can be easily bought or sold in various forms, such as coins, bars, or through exchange-traded funds (ETFs).
Global Demand:
- Gold is in demand worldwide for both investment and jewelry purposes. This global demand can contribute to its long-term value.
Cons of Gold Investing:
No Income Generation:
- Unlike stocks or bonds, gold does not generate income in the form of interest or dividends. Investors rely solely on capital appreciation for returns.
Storage Costs:
- Physical gold, such as bars or coins, requires secure storage, which can incur additional costs. Safe deposit boxes, vaults, or insurance may be necessary expenses.
Price Volatility:
- While gold is often considered a safe-haven, its price can still be volatile. Market sentiment, geopolitical events, and economic factors can lead to rapid price fluctuations.
No Yield:
- Gold does not provide any yield or cash flow. In an environment where interest rates are rising, other income-generating assets might be more attractive to investors.
Limited Industrial Use:
- Unlike other commodities like silver, gold has limited industrial applications. Its value is largely driven by investment demand and jewelry, making it more susceptible to changes in sentiment.
- Market Speculation:
- The price of gold can be influenced by speculative trading, and short-term market sentiment can impact its value. This speculative nature may not align with the long-term investment goals of all investors.
Gold can be a valuable addition to an investment portfolio, offering diversification and acting as a hedge against economic uncertainties. However, it's essential for investors to weigh the pros and cons, consider their financial goals, and assess how gold fits into their overall investment strategy. Diversification and a well-thought-out investment plan are key elements in managing the risks associated with gold investing. However from financial expert they advice to keep 10% of your portfolio into Gold.
Happy Investing.
