Tuesday, January 25, 2011

Exchange Trust Fund – Xinhua 25

ETF (Exchange Trust Fund) provide cheaper way in terms of cost for those who want to invest into stock market. ETF normally having lower management fee compare to Unit Trust. CIMB Xinhua 25 is one of the ETF provide an opportunity for investors who want to invest HK Stock Market, from Bursa Malaysia without bothering about currency exchange rate and reduce risk of invest into single stock in Hong Kong.

As per the name, Xinhua China 25, involve direct holding of 25 large company in China. I do not know why they choose 25 but not 23 or 28. Though the name is China, but it's more mirror to HK Stock Index, as per past record show it's more sensitive to Hang Seng Index's movement.

There are many reasons people invest into China/ Hong Kong. I think the main reason for you to invest into it, should be you believe China / Hong Kong stock market going to be in up trend for next 3 years. Why choose CIMB Xinhua 25? The answer is because CIMB provide market maker together with other 2 broker, hence the share is quite liquidate, do not need to worry if there's no buyer or seller. Beside, they will distribute all the dividend receive from these 25 companies to unit holders after deducting their cost on yearly basis.

Who should invest in this ETF? My opinion, if you have lump sum of money, with planing to invest into Hong Kong stock. Second, you don't want to check the price every day, instead, feel once a week is good enough. Last, you want to practice the method of cost averaging and eliminate the risk of invest into single problematic company.

Thursday, January 13, 2011

Cook frog with cold water!

I still remember, the story about how to cook frog with cold water. Frog, due to it's cold blood type, we put it in cold water, it will not jump. Gradually, we heat up the water, so water turn from cold to warm, from warm to hot, from hot to boil. The frog was so comfortable until it did not realized the water turn hot and boil, it died peacefully.

I am not a frog, at least know how to recognize the condition of environment, always ask if current market is too hot? If 100 marks is hot, I will rate current market as 75 marks. I plan to sell some holding at 80 marks onward, not being too greedy, let others to earn some profit so that I can sleep with peaceful mind. Don't be one of the frog when you invest in stock market, don't be too comfortable when the price or index moving higher everyday. In fact, you should worry about the markets' breaking another high again. Don't be the frog, died without knowing what happen!

Saturday, January 8, 2011

New Year Investment Plan

It's first week of 2011, time to sit down, think and plan what we going to do from here. How much investment return you have made last year? Like Christmas' present, it's already opened, be it positive or negative, doesn't matter, the most important, we want to plan and take action so that we can obtain similar return as last year if not better.

Let's look at the current situation, oil price start the up trend again. Malaysia government also raised the petrol price recently. CPO price now above RM3,800, almost all time high record. Inflation is expected to follow soon. As an investor, we know money if keep in bank, it's not going to do any better in this situation. We need to turn our money in some kind of asset that will benefit us, meaning inflation proof. 

We will continue to hold on our investment portfolio this year, for sure they going to increase in value coming months due to inflation. We know when more people become rich (high income nation), good asset and great company's stock will increase in value. Further, Malaysia will be reclassified as "Advanced Emerging Market" effective Jun 2011, that's why we notice many foreign fund inflow at first week of 2011 pushing the index to record high of above 1500 points!