Personal Investment Planning

24
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment Management accepts no liability whatsoever with respect to the use of this document or its contents. 1 Personal Investment Planning

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Transcript of Personal Investment Planning

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents.

1

Personal Investment Planning

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 2

Content

• Principles of Wealth Accumulation

• Investment Basics

• Traps & Checks

• Risk & Rewards

• Power of Compounded Investment

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 3

Content

• Principles of Wealth Accumulation

• Investment Basics

• Traps & Checks

• Risk & Rewards

• Power of Compounded Investment

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 4

Principles of Wealth Accumulation

• Meet Retirement Expenses

• Hedge Against Inflation

• Prepare for the Expected & Unexpected

• Minimise Taxes & Reduce Debts

• Beat Your Goals

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 5

Principles of Wealth Accumulation

• Growth over time– Compounded growth

• Investment vs Speculating Activities• Investment

– Investment requires long term commitment

– Measured in years

– Grow money over time ahead of taxes & inflation

– Beat taxes & inflation

– More predictable returns (averaged)

• Speculating– Short term

– Unpredictable returns

– Potentially very high or low returns

– High risk

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 6

Principles of Wealth Accumulation

1. Retirement

2. Education Fund

3. Personal Wealth Accumulation

4. Capital Preservation/Inheritance

5. Business Continuity

Time Horizon

Rank Goals

Effective Management of

Resources

1. Investment Term

– Short Term

– Medium Term

– Long Term

2. Point of Investment

1. Choosing the Right Investment(s)

2. Investment Methods

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should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 7

Managing Investments

• Know your own needs

• Understand asset classes

• Know how the market functions

• Structure a portfolio

• Take the plunge & monitor progress

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 8

Content

• Principles of Wealth Accumulation

• Investment Basics

• Traps & Checks

• Risk & Rewards

• Power of Compounded Investment

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 9

* Source: Securities Commission Malaysia - Figures quoted as at June 2005

Investment Basics

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should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

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Investment Basics

Purpose of investment i.e. to achieve capital appreciation, high

dividend yields or a consistent income yield over a period of time.

Depending on the investor’s profile, net worth and financial situation

whether it is the person’s retirement savings, hard earned monthly

savings or excess cash.

Point of investment close to retirement, height of career & term of

investment etc.

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should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

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Investment Basics

Choosing the Right Investment

• Time Horizon– At what stage of the ‘life cycle’ are you?

– How long to do plan to invest?

• Investment Objective/Goals– Marriage

– Home

– Family

– Education

– Retirement

– Capital preservation & Asset Accumulation

– Planning for Uncertainty

• Risk Appetite– How much risk are you comfortable with?

– What is your Investment profile: risk tolerance, age, liquidity, required rate of return, current income, capital preservation, inflation, investment horizon

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should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 12

Investment Basics

• Professional Management:– Fund Manager

• Considerations: – Investment Process

– Suitability of investment product

– Quality of people & Service

– Track record – past performance

– Fees

– Relationship?

• Do-It-Yourself:– Through a broker, Unit Trust agent or

personal online trading

• Considerations:– Time

– Knowledge

– Access to timely & accurate information

– Cost

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 13

Investment Basics

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 14

Financial Objectives

SHORT TERM /

EMERGENCY MONEY

Savings/Current Accounts

Fixed Term Deposits

Insurance Products

Capital Guaranteed Funds

Security

Security

Financial

Needs

LONG TERM

MONEY

Growth

Expertise

Discipline

Diversified Portfolio

Unit Trust Funds

Structured/Discretionary

Islamic

REITs

Financial

Wants

OPPORTUNISTIC

MONEY

Fun

Timing

Luck

Direct stocks and bonds

IPOs

Single theme funds

Lottery

Target returns that beat inflation at tolerable risk levels

over an acceptable time horizon

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 15

Content

• Principles of Wealth Accumulation

• Investment Basics

• Traps & Checks

• Risk & Rewards

• Power of Compounded Investment

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 16

Traps & Checks

Herd Mentality

Guided by emotion

Over-gearing

Lack of planning &

diversification

Excessive expectations

Failure to Understand

risk

Understand Investment variables

solution

Employ basic

investment principles

Power of regular savings &

compounded interest

Employ basic investment

principles

Understand Investment

variables

Invest to beat inflation &

let time grow your money

Know & Understand

Your Risk appetite

Lack of access to current information

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should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 17

The Roller Coaster of Investor Emotions

Point of maximum

financial opportunity

“Maybe the markets

just aren’t for me.”

Optimism

Relief

Hope

Denial

Capitulation

Fear

Despondency

Panic

Depression

Desperation

Anxiety

Euphoria

Thrill

Excitement

Optimism

Point of maximum

financial risk

“Wow, I feel great

about this

investment.”

“Temporary

setback. I’m a long

term investor.”

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 18

Content

• Principles of Wealth Accumulation

• Investment Basics

• Traps & Checks

• Risk & Rewards

• Power of Compounded Investment

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 19

• Investment Risk– Changes in sectorial performance & favour due to economic,

political & environmental factors

• Interest Rate– Changing market interest rates will affect Fixed Income

investments in particular

• Inflation Risk– Changes in price of goods & services

• Market Risk– Change in political & social conditions

• Business Risk– Exposure to most of the above, depending on geography & sector

Risk & Rewards

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 20

Risk & Rewards of different Asset Classes

• Balanced

Funds

• Islamic funds

• Income

Funds

• State Funds

• REITs

• Capital

Growth

Funds

• Aggressive

Growth

Funds

• Islamic

Funds

• Money Market Funds

• Bond Funds

• Index Funds

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 21

Content

• Principles of Wealth Accumulation

• Investment Basics

• Traps & Checks

• Risk & Rewards

• Power of Compounded Investment

Disclaimer: The information contained in this document is intended only for use during the presentation and

should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 22

Power of Compounded Investment

• Scenario 1:

• James decides to begin early investing

regularly, a sum of RM500 monthly, in an

investment vehicle that will yield her an average

of 8% per annum over the next 30 years till

retirement. At the end of 30 years, the total sum

of her investment would have amounted to

RM734,025.00.

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

500.00

Thousands

1 3 5 7 9 11 13 15 17 19 21 23 25

Year

25 Years of Compounded Savings

0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

Thousands

1 2 3 4 5 6 7 8 9 10 11 12 13 1415 16 17 18 19 2021 22 23 24 25 26 2728 29 30

Year

30 Years of Compounded Savings

• Scenario 2:

• If James decides to begin investing 5 years

later, a sum of RM500 monthly, in a similar

investment vehicle that will yield him an average

of 8% per annum over a period of 25 years, till

retirement, her total sum of investment would

have only amounted to RM473,726.

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should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 23

Power of Compounded Investment

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should not be disseminated or distributed to parties outside the presentation. Hwang-DBS Investment

Management accepts no liability whatsoever with respect to the use of this document or its contents. 24

DISCLAIMER

• This presentation was prepared by Hwang-DBS Investment Management Berhad (Co. No. 429786-T). The information contained in this presentation has been obtained from public sources believed to be reliable and the opinions, analysis, forecasts, projections and expectations (together "Opinions") contained in this presentation are based on such information and are expressions of belief only. No representation or warranty, expressed or implied, is made that such information or Opinions is accurate, complete or verified and it should not be relied upon as such. Information and Opinions contained in this presentation are published for recipients' reference only, and are not to be relied upon as authoritative or without the recipients' own independent verification or in substitution for the exercise of judgement by any recipient, and are subject to change without notice.

• This presentation is not, and should not be construed as, an offer document or an offer or solicitation to buy or sell any investments.

• A copy of the Master (This Prospectus shall hereafter supersede and replace the current prospectus and supplementary prospectus of Hwang-DBS Select Income Fund which will expire on 5 January 2006), Islamic Master , Select Cash & Select Enhanced Deposit Prospectuses have been registered by, and lodged with, the Securities Commission. These Prospectuses have been seen and approved by the directors of the management company of the unit trust fund and they collectively and individually accept full responsibility for the accuracy of all information contained herein and confirm, having made all enquiries which are reasonable in the circumstances, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

• The Securities Commission has approved the issue, offer or invitation in respect of the unit trust funds the subject of this Prospectus, and that the approval shall not be taken to indicate that the Securities Commission recommends the investment.

• The Securities Commission shall not be liable for any non-disclosure on the part of the management company and takes no responsibility for the contents of the Prospectus, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Prospectus. INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF THE INVESTMENT. IN CONSIDERING THE INVESTMENT, INVESTORS WHO ARE IN DOUBT AS TO THE ACTION TO BE TAKEN SHOULD CONSULT THEIR PROFESSIONAL ADVISERS IMMEDIATELY.

• No units will be issued or sold on the basis of this Prospectus later than one (1) year after the date of these Prospectuses.