Hi all,
i have invested in investment plan b4. Here are some of my personal experiences.
1) Underlying Assumptions
This investment product assumes that market will up in the uptrend in the long run. ( long run here i mean more than 5 yrs ). This also follows the Dollar Averaging Method.
Illustration:
In jan, the unit trust is $1, with a monthly contribution of $200, u can buy 200 units.
In feb, unit trust rises to $2, $200 will give u 100 units.
.
.
.
and so on. So in 2 mths, yr ave price is $1.33 and valuing at $400, with 300 units.
So when prices are high, u buy lesser units
and prices are low, u buy more units.
In the long run, ASSUME market is uptrend, u stand to benefit.
2) Bid - Ask Gap
Well, Not all unit trusts quote at NAV ( net asset value ) prices. That means the unit trusts Bid $1, ask $1.05. So yr monthly $200 contribution buy the unit trust at $1.05 per unit. So in the future, if u want to sell, u sell at $1. So using simple maths, an investment in unit trust cost u 10% of yr invested amount. Unless, yr unit trust rises more than 10% during yr invsetment period, it is unlikely that u will earn.
3) Misc charges
This is a headache. There R A LOT OF MISC CHARGES.
Management fees: usually 1 - 5% per annum depending on the funds u invest in
Policy Fees: $2 per mth for some companies, or $30 per yr for some companies.
Advisory Fees: ranging, can be a few hundreds depending which company u took up with.
Will update this when i got time....kiv first
i have invested in investment plan b4. Here are some of my personal experiences.
1) Underlying Assumptions
This investment product assumes that market will up in the uptrend in the long run. ( long run here i mean more than 5 yrs ). This also follows the Dollar Averaging Method.
Illustration:
In jan, the unit trust is $1, with a monthly contribution of $200, u can buy 200 units.
In feb, unit trust rises to $2, $200 will give u 100 units.
.
.
.
and so on. So in 2 mths, yr ave price is $1.33 and valuing at $400, with 300 units.
So when prices are high, u buy lesser units
and prices are low, u buy more units.
In the long run, ASSUME market is uptrend, u stand to benefit.
2) Bid - Ask Gap
Well, Not all unit trusts quote at NAV ( net asset value ) prices. That means the unit trusts Bid $1, ask $1.05. So yr monthly $200 contribution buy the unit trust at $1.05 per unit. So in the future, if u want to sell, u sell at $1. So using simple maths, an investment in unit trust cost u 10% of yr invested amount. Unless, yr unit trust rises more than 10% during yr invsetment period, it is unlikely that u will earn.
3) Misc charges
This is a headache. There R A LOT OF MISC CHARGES.
Management fees: usually 1 - 5% per annum depending on the funds u invest in
Policy Fees: $2 per mth for some companies, or $30 per yr for some companies.
Advisory Fees: ranging, can be a few hundreds depending which company u took up with.
Will update this when i got time....kiv first
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