"Do It Yourself"

Many person are not willing to invest themselves and giving away the money to the so-called master to invet directly in stock market. This lacks of self-belief probably will actually destroy your hard-earned money. Mutual Fund or whatever they called is not really better than you (Yes..I really mean this).This week I was tempted by one of mutual fund. The return of this fund was quiet good at this moment, around 60% in a year.

Wowww...

But after thinking for sometime, I realise that mutual fund is not for me. Why I'm not interested in that mutual fund??? Yet, the return was 'bombastic' with 60% return per year. I would be a millinaire in short time. So, why I still putting my money in stock market directly and not mutual fund??? Here, I tell you why I prefer stock market directly and not in mutual fund.




The Truth About Mutual Fund (you must know)

1. Hidden charges

          This is where most people 'mis-seen' and it was their greatest mistake. Where you putting, example
          RM1000 in mutual fund, you exact investment is not RM1000. There will be some charges on that.
          They are two main charges. The one is annual fee charge : it's not much ONLY 1.5% of your
          investment. The second charges is sales charge: it's also not much. ONLY 5%-6% of your investment.
          (on most common charge). Not to much right :-)

          You putting RM1000 and your investment value is decrease until 7%. It leave you to around RM930
           for an investment. If the fund is doing great it's ok. But, how if the fund prices is at peak and that year
           is bad year. I'm not saying about anyone.

      2. NOT every fund is doing well.

          There were fund which doing worst. When you looking at a fund, please
          look at longer price chart. Most fund is doing well in their first 3 or 5 years and become worse after
          that.


     3.  Buy A Bad Stock

          Are you can bear with someone who has an annual wages with 6 digit and 'gambling' here and there
          with your money. Why I called that 'gambling'. Imagine, one day KLCI at around peak and you have a
          lot lot lot of money which you must invest.... Then, you will come up buying everything that give nothing
          in value. When you RM1 billion (as example) and you must invest/trade in a day, then you will buying
          in a bad stock.
  
    4.  Transaction Cost (from fund's manager)

         Not only that, the cost of transaction in active buying and selling will eating up your investment. In long
         term, your investment will be reduced because you must a transaction cost year by year. It's why most
         is doing well at first and worst after 3 or 5 years.



Another View Of Investment

Buffett said for know-nothing investor if they buy in regular in index fund, they actually can outperform the professional (mutual fund). In Malaysia, there are some index fund. For example MyETF. This fund hold their positon in 25 Shariah big-listed companies. And there are some more who hold their position in 30 big-listed companies (don't remember the name).

And for some-know investor, the focus investing is right for you. What is focus investing? In genereal, the concept is select some good companies/stocks and invest in them. I'm not going to tell more about it here or my my post will be long. Be continue in another post.

See again next time. Happy Investing.


*** This article is not a recommended in any investing position. It only my full thought and opinion in investment. Don't 100% listen to me. Do your own research.