Money Tips # 21 - 25

21. If you are investing a large lump sum, put the money in a money market account to start with and phase it into pre-selected investments over a period of time. This is particularly important with equity markets: don’t invest all your money when prices are high and lose out later, when they come down.

22. Don’t be taken in by labels. Some investment products style themselves as fulfilling certain needs (for example, “a savings plan for your child”). Banks often offer need-branded products. Always check the underlying investment proposal. There might well be a more suitable generic product with a better-performing underlying investment, such as a life assurance managed portfolio or a unit trust asset allocation fund, which has a low-risk structure but the potential for much better returns.

23. Don’t become emotionally attached to shares. If a particular share bombs out for good reason, such as bad management or failure to adapt to new markets, get out. But if the share value is falling as part of a general sector downgrade, there is little reason to sell.

24. If you are trading shares for short-term gain, you are not an investor, you’re a gambler. Don’t be surprised when you make a loss.

25. Avoid investing in unlisted companies. These companies are not properly regulated and are the favourite vehicle of scam artists. If you decide to invest in an unlisted company, make sure you do your homework first and understand all the risks.

Di pos oleh Arbain Muhayat pada 08 June 2008