Download - 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
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. 10
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.
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. 11
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
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. 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.
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. 23
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. 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.