How to Monitor Your Unit Trust

I find that a lot of people do not monitor their unit trust holdings and price.
They didn't know that monitoring their unit trust account is as important as if you had a share and you're monitoring your share price.
The reason being everyone was being advised by their unit trust consultant that unit trust investment is for long term and once you get in you don't get out until you need the money. These unit trust consultants will also ask you for monthly commitment into the unit trust so that you'll benefits from the average price.

Somehow these strategy works in certain ways but there do have times when the strategy doesn't work. The reason this strategy was implemented because it is easier to communicate these strategy to the general public who has little knowledge about investment. It also helps the unit trust consultant to be able to get their commission each and everytime you invest and increase your fund size.

For beginner investors who wish to continue with the strategy, they of course can continue using it. But for people who like to learn more and know more about how you can actually gets the best return out of your unit trust, then you should continue to learn a bit more on how to monitor the price of the unit trust.

Unit Trust is a basket of investment assets which might includes of equity, fixed income or commodities. Unit Trust often being categories into different category include growth fund, income fund, equity fund or so. These are generally telling you how your unit trust fund invest your money. Growth Funds normally means they will look for something the fund managers think might have a grow potential for example the emerging market equity or some of the small to middle cap stocks which has growth potential. They select many stocks and put them into a basket which they called it as portfolio. This strategy are particularly used to grow your money and you can only grow your money if you know that the market has a lot of upside meaning the stocks market is growing for the next few years. If the market is up at it's peak and you're putting money every month to increase your capital (imagine you're doing that in the year 2007) and when the market crash you're definitely at the losing side because although the fund managers tried to buy a basket of stocks to avoid one single stock can influence the downside of the whole portfolio, somehow during market crash; everything including your cooking pot has to go down.

This shows that monitoring the market is good even for unit trust investors. You might not need that much information monitoring the market but you still need to know when the market is near it's peak or not.

You can monitor your unit trust price. In a bull market (or up market), typically all funds are showing good return and a good unit trust should not show just show you big returns. On the other hand, a good unit trust fund should show you consistent return. The word CONSISTENT is really important so that you can have a peace of mind when things doesn't move too right you can know that your fund manager are still very much having a consistent upside on their portfolio.

To always monitor your unit trust price, you can check at http://invest.com.my/personal/funds/price/
It will shows you all the prices of all unit trust and also you can compare different funds together.

Do your own excel file and keep a record on a few top performing funds and check for their consistency.
I've see some funds having 40% up during bull market and 60% down during bear market. How can we say that their 40% is performing when we know that during up time, the whole market is actually showing you good return? Learn from starting to monitor the price of these funds. You don't want to see big up and big down. You want good upside and moderate negative or manageable negative during market up and down.

Your Best Partner in The Stocks Investment World --- Mr. Market

As I've made clear in these essays, an investor should treat each of his or her stock purchases as if they were going to buy the entire company. In most cases, you don't need to worry about the economy or even the stock market as a whole. The only requirements of a relatively successful investor are the ability to value a business and the right psychological approach to stock prices. We are going to firmly establish the second of these valuable skills in this portion by explaining the concept of Ben Graham's "Mr. Market". This relatively simple metaphor will forever change the way you look at stock prices, and if employed correctly, increase your investment returns noticeably.

The concept of Mr. Market goes something like this: imagine you are partners in a private business with a man named Mr. Market. Each day, he comes to your office or home and offers to buy your interest in the company or sell you his [the choice is yours]. The catch is, Mr. Market is an emotional wreck. At times, he suffers from excessive highs and at others, suicidal lows. When he is on one of his manic highs, his offering price for the business is high as well, because everything in his world at the time is cheery. His outlook for the company is wonderful, so he is only willing to sell you his stake in the company at a premium. At other times, his mood goes south and all he sees is a dismal future for the company. In fact, he is so concerned, he is willing to sell you his part of the company for far less than it is worth. All the while, the underlying value of the company may not have changed - just Mr. Market's mood.

The best part of this entire arrangement: you are free to ignore him if you don't like his price. The next day, he'll show up at your door with a new one. For your interest, the more manic-depressive he is, the more opportunity you will have to take advantage of him [don't worry, he doesn't have feelings or mind being taken advantage of.] As long as you have a strong conviction of what the company is really worth, you will be able to look at Mr. Market's offers and reject or accept them... the choice is yours.

This is exactly how the intelligent investor should look at the stock market - each security that is traded is merely a part of a business. Each morning, when you open up the newspaper or turn on CNBC, you can find Mr. Market's prices. It is your choice whether or not to act on them and buy or sell. If you find a company that he is offering for less than it is worth, take advantage of him and load up on it. Surely enough, as long as the company is fundamentally sound, one day he will come back under the sway of a manic high and offer to buy the same company from you for a much higher price.

By thinking of stock prices in this way - as mere quotes from an emotionally unstable business partner - you are free from the emotional attachment most investors feel toward rising and falling stock prices. Before long, when you are looking to buy stock you will welcome falling prices. The only time you want to invite high stock prices is when you are eager to sell your securities for some reason. Thankfully, in most cases [except those caused by "Life" which we discussed earlier], you are free to wait out Mr. Market's emotional roller coaster until he offers a price that you consider equal to or higher than intrinsic value. This is perhaps your greatest advantage in your investments.

Joshua Kennon

Basics About Unit Trust

Although unit trust is quite common in Malaysia, not everyone got the concept right. Many unit trust agent in the market had not been passing down the basic knowledge of unit trust to make the investors understand fully.

Recently I met up with a senior manager of a public list firm. She had been in finance for sometime but when we discussed about the concept of unit trust - the question that she ask tells me that she is not very familiar with it.

Let's go back to the basic.
So what is unit trust?

It is no more than a group of investors with the same objectives gather their month and hire a team of professionals investment managers to help them monitor their investment and try to achieve the investor's objectives.

Why do they want to do so is because the investors capital is too small for them to start a portfolio (maybe not even for 100 shares) and that is why by gathering the capitals from different investors - it achieve a goals of allowing them to setup their 'own' investment portfolio.

What's an investment portfolio? Basically a pool of investment assets with a combination of equity (stock market), bonds, commodity and other investment asset.

If an investor is investing alone, it is impossible for a small time investor to be able to have a portfolio of himself due to limited capital. Maybe you can only buy some shares of a single company and all your risk and rewards lies on this single company. To those who are really good in analysis and have good knowledge of investing - it should be a good way because you're gathering your capital to one single share that can bring you a lot of rewards.. Sound's good but not every investors can achieve that.

With a portfolio you can basically keep your risk diversified. Meaning if you invest everything in BP as an oil company earlier the year. The oil spill news will bring your capital down in term of market value and you'll be stuck with that one shares hoping that it can turn back into profits - which is difficult.


So why call units?Unit Trust came from a name of unit because the money that you've place into the pool of investment portfolio will be divided into unit and the value of the total pool will be calculate in term of unit price. When the investment brings in return and the shares invested increase in value - the market value for the pool of investment will increase meaning your unit price will also increase.

The price will be calculated on the end of each day after deducting all the cost involved in the unit trust fund.
The cost will involved the administrative cost, trading cost (brokerage fee, etc), audit fee, security commission fee, etc. So if the stocks or bonds is not increasing in value and when the investment management deduct all the fees, the unit price will be affected.

But since the cost are fixed and is shared by all the unitholders. You'll not see a dramatic difference even after they deduct the expenses.

The return of unit trust is normally by regular income (if the investment management distribute the income as distribution) or when capital appreciation. Either way are actually the same because when income are distributed, you will basically see the price of the unit drops a little but you as an investor will already received it as hard cash income. So depending on your preference you might like unit trust that distribute income from time to time.

I shall share more about unit trust in the coming post to bring more information to you.

Hard Truth About Black Box Trading

I went to a training seminar on "Share Trading" yesterday. I'm not going to tell about who the speaker is. But the whole idea of Share Trading Seminar is suppose to show the audiences some insight of the finding on the economics, if not some basic knowledge they could acquire to make sure that they're able to understand the industry better.

However, the one that I went - the so call "training" was actually their "preview" of their program. First of all, I am fully supportive of training or any coaching session on stocks trading. But I do not see how his training will benefits the people.

First. He introduced himself as a professional traders which I doubt that. Then he shows all the money that earns by their "student". But surprisingly they only show you the positive ones and did not tell you the risk behind all these trading strategies.

They then tell you how they can help you identify a winning stocks without you spending time on it. This is just selling information after all and I think we're able to find better research information out there. They will then tell you about how to trade only these stocks and make tons of money. Not forgetting their 96% winning history.

Their course is more than RM2000 which they will help you set up your trading platform, teach you some basic trading and you will just follow their "tips". Too good to be true? Yes. There are many session out there are selling all these holy grail to the people. They lead you to believe that trading is so easy and totally no risk and you can earn tons of money from them. I don't think this is education and I think those who has went to their class should really start getting some real education.

If initially they market their product as a trading research and they will assume risk for everyone else. That's totally a different story. Creating dreams and showing how much people have profited without telling them the risk is consider a con job. Worst thing, they even claim that their strategy is a new strategy with less than 6 months old and can make average 2-5% per week and even goes up to 10% per week since the strategy is too  new and pioneer that no one else is using. (holy crab!)

For those who have not signed up. Get yourself a good coach and get a real education. For those who have signed up. I wish you luck

A Table Model Of The Stock Market

A bit of interesting article about the stock market in a table model showing where the money goes. But this are cynical and not necessarily applies evenly as mentioned. I've however find it interesting on the way it actually write about the stock market and therefore would like to share. This is not to encourage you to stay out of the game. It is to make sure that you know in and out before you're going into the game.

Stock Market - don't be the Investor
Many people are interested in stocks. Some are traders, some investors and some are both. People in the stock market are generally optimists, else they wouldn't dare to risk there money. It is fair to say that both, traders and investors, believe in what they are doing and probably both think that they know it better than the other side. Here are some methods investors are using to put their money at work:

• Look for chart patterns suggesting that a stock has become abnormally cheap and at the same time will likely go up from where it is now.

• Be a fundamentalist, analyze and examine every data that comes out of a company, and then buy only cheap at a reasonable price.

• Make global judgements about the economy and hit the right turning point for a general entry into the market to elegantly avoid analysing details of pea size.

• Buy the broader market with index funds, based on the idea that overall the stock market reflects the ongoing advance in the world and thus stock indices are doing well long term.

• Delegate the work of making investment decisions to a professional, who, because being a professional, should outsmart the market.

Most investors adhere not only to a single pure form of these strategies. They rotate between them, they try different flavors of them, they mix things up, they even start an investment with one strategy and close it with another. Or they started trading and end up with an investment. Nonetheless, all these behaviors seem to have good arguments. These rational looking strategies and huge stock price advances picked and presented by the media probably cause the general belief that investing in the stock market will make people wealthy. Now let's consider an uncommon view of the underlying mechanism.
The stock market - a table with six players
In the middle we have Mr. Doe, the private investor. Left to him sits a professional fund manager and at the right there is a professional money manager for individual clients. Let us refer to all of them as the investors. On the other side of the table we have a broker, a market maker and Mr. Company. We could add in the middle of both groups the trader, but in this model we want to examine the relation of the investors to the "sell side".
These opponents are all doing what the market does, they are exchanging stock shares and bank notes, putting them on the table and taking them away at times. Let us concentrate on the money only, after all the money is the only thing that counts. Neither has the table a hole through which money could vanish, nor does money rain onto it. All money put onto or withdrawn from the table has to go through the players' hands. Let us have a look at the broker's hands first.
The broker only sells and always wins
He charges a fee for simply forwarding an order from the investors to someone else. All that without risk and pain, and after doing so he pockets a fee. He can't make a loss, so with a bunch of marketing tricks he animates everyone to give him as fast as possible a new order. Important here is, what he does with regard to the table. He never puts money onto it, he only takes money away.
The market maker is the strongest trader
He is the one who takes the other side of a trade and makes a mostly riskless business with the spread, the difference between buy and sell price. Furthermore, he has state of the art equipment, which he watches like a hawk all day in a big room with others doing the same, hoping that many hawkish eyeballs are seeing more than single prey's ones. The market maker is known to be in a strong trading position, as he works for a big company with real money, which other traders fear.
With the capital behind him he is able to drive prices up and down, enticing euphoric investors into high prices and shaking out trembling ones with a loss at low prices. For example, the market maker likes to initiate breakouts. He is buying low within a price range that he even may have formed for that reason, bringing the price to the upper edge and selling higher into the following rush of buyers, who may falsely interpret this breakout as a signal. The same game can be played with first fuelling a trend to an exaggerated level and then bending it around and initiating a swing into the opposite direction.
If investors fall victim to these traps they are called sometimes the "weak hands", because they are doing the opposite of what real investors are supposed to do, namely buying cheap and selling higher, never or on changing fundamentals only. They are confused investor-traders, market participants who mix trading and investing strategies in an uncontrolled manner, a sure way to burn money. One extreme is the trader who misses his stop and decides at much lower prices to become an investor and the other one is the investor who finally becomes weak and sells with a severe loss. The worst case is oscillating between both extremes.
Some badmouthing tongues even argue that market makers make money with illegal insider information, front running or stock pumping. Not enough with that, they are said to create up- and downgrades, something like home made news, just to influence supply and demand of a stock to force its price to a level where they can sell or buy with more profit or a smaller loss. If it is not the market maker himself doing these things, he may have his buddies whispering with him through chinese walls and violating well-meant laws. Overall the market maker seldom makes a loss, on average, he always wins. To make it short, he also takes only away money from the table.
The stock market is a real gold mine - for Mr. Company
He has a special seat, with a big sign above it, on which is written -on his side so that the investors won't always see it- "Capital source". The other side of this sign could be labelled "Capital drain", but that would lower the mood, so it only says "Welcome". Mr. Company comes to the table right away from the printing press, with a big chunk of newly created stock certificates - paper, which he dumps on the table while cashing in tons of money. Will he ever give this money back? Hehe, stupid question, no he won't. The alternative for him is to borrow money by issuing bonds, which he obviously thinks of being more expensive in this case than selling paper. After all, in the bond market he would have to give back what he borrowed after paying interest for it.
In few cases a company not only survives but also prospers. Then, in the far distant future, it is expected to pay back something to its investors. Mr. Company can ignore such an expectation for a long time or even for the whole lifetime of the company. There is no law requiring him to fulfil it. But he can do so by paying a marginal dividend or by buying back directly some shares from current holders, preferably when stock prices are low. That looks good and may cost him no money at all, because there are some nice ways to offset such payments:

• First, while making these payments, he can do a secondary offering. Mr. Company simply comes back to the table and dumps again a chunk of paper on it. Sounds primitive? No problem, he can mask the operation a bit.

• He does it just a bit before or after the phase of payments, preferably after his company has experienced a good time, its reports and news have been tuned to sound even more optimistic than usual and its stock price is relatively high. Selling high and buying back lower the own shares is a fine additional business for a company.

• Or he creates sort of options by printing the words "warrant" or "convertible bond" on the paper. That means that he starts two dumping actions, one now for the option paper and one later in the future for exchanging the option paper for the original paper, cashing in twice.

• Even better, he splits off a part of his company, declares it being a new one and sells paper with a new company name printed on it.

• If he is lazy, he simply distributes paper with the old name to the employees of his company. He can pay smaller salaries this way. Employees get shares proportional to their importance, meaning that he gets the biggest share, because he considers himself being most important. Instead of one big, many smaller lots of paper are now sold at the market.

There is another rare and special case how money comes back from Mr. Company, a cash paid take over. Another Mr. C arrives at the market and buys with real cash all paper of Mr. Company from their original investors back. But often this other Mr. C got himself at least part of the money from the market, so that only a fraction really comes back.
Stock market operators behind the scenes
Actually Mr. Company is supported by two other gold mine diggers. The investment banker helps carrying Mr. Company's paper chunk to the table. With much trumpeting he praises its quality as an investment. If the investors are still skeptical, the market maker, with his many tricks, makes the new stock's price going up. Then the private investor loses all doubts and shoves the missing tons of money over the table to Mr. Company and his investment banker. The investment banker's risk is that he projects too big a chunk of paper, so that he effectively has to play the role of the investor, at least temporarily. But that happens rarely. Mostly the investment banker just gets his fixed percentage of the sale from Mr. Company. Seen as an entity both will of course always drain money from the market during this initial public offering.
Mr. Company's second supporter, the venture capitalist, got beforehand his own chunk privately from Mr. Company in exchange for money, hoping that Mr. Company raises the seed and is invited by the investment banker to the market eventually. He may even get a chunk from Mr. Company later when the stock is already on stage, typically for a better than the price at the market. In both cases he hopes that he can sell his chunk for a profit, which may or may not come true, but at the market he will never do anything else than selling his shares and raking in money.
So we have three gentleman at the table taking away money. Some do it gently but constantly, some more raid-like. Finally the taxman appears every now and then, grabs some money from the table and out of the trouser pockets of everyone and grins. Of course he never puts money onto the table either.
What about our three investors? They are fighting for who has to pay the least amount of money to feed the other side. We know that the fund and money managers are acting on behalf of the private investor. They get a riskless payment from him for this fight, so it is not really that important for them whether they lose more or less.
It looks as if poor Mr. Doe is the real loser in this game. Interestingly he has a different perception of this.
But I already made a nice gain with stocks!?
This seems to be a paradox. Yet it is none. The table view of the stock market is a totalized one, a view which cares only for averages. Of course there are many individual investors having made their profit in the market, but on average the private investor is the big loser. He just doesn't know it yet.
There have been market makers, who suffered big losses, which they never recovered, because they went broke. There have been also brokers going out of business, because their clients made losses that they couldn't repay. But these are single failures. On average both are working businesses.
Of course there are also companies caring for their shareholders with buying back stock shares and paying dividends with every free cash they earn, not offsetting these payments with tricks the private investor is not aware of. But the times have changed. One century ago a stock company was strongly expected to pay out a high dividend. Back then all stocks of large companies had dividend yields higher than the one of bonds, reflecting their higher price risk.
Fast gains vs inner value
Today stocks are more seen as speculative vehicles. Their price swings are bigger and the IPO market works mostly decoupled from expected dividend payments. For a long time new companies do not pay a dividend at all, arguing that the money is better put into further growth. When finally dividends are flowing, they are much smaller than they used to be, decades ago.
To get the real picture of what comes back through dividends one has also to take the inflation into account, which often eats up dividend rates completely. Add to that the long delay of the first dividend payment after the IPO and the small percentage of companies that make it to this point and it becomes clear why so many start-up entrepreneurs want to become a Mr. Company.
A second point of confusion is what happens away from the market. The market maker and the broker may have to pay a hefty monthly bill for their equipment, salaries and rent, so that they only break even. A venture capitalist may enthusiastically invest in any nonsense idea he hears of, so that he overall makes a loss. Mr. Company may have the wrong concept, not enough talent or too much competition, causing him to burn all money and go broke. Perhaps he is a genius and his company is a fantastic growth machine.
All that is not important for the table model of the stock market. Even a rising price of a stock doesn't matter. It looks like the investor side is winning in this case, but alas, high prices are only tempting Mr. Company to sell more shares instead of buying back his paper. The only question that counts in the table model is: Does a player's money flow from or to the market?
A negative-sum game
The futures market is called a zero-sum game, because for every contract traded, there is a buyer and a seller and what one wins must be paid by the other. There is the proposition that the stock market is a positive-sum game, because over a long term, let's say some decades, stock market indices went up. The table model suggests that the opposite is true. For the private investor it is a negative-sum game. How can that be?
Over time problematic index stocks get replaced by fresh ones with brighter future perspectives, so indices are distorted. But the main reason is simply that all the owners of stocks own paper but not money. If they all wanted to exchange their paper into money to get what the ever rising indices promise, these indices would drop to zero immediately. The stock market is basically a pyramid scheme, which implodes eventually, sometimes self-induced, sometimes triggered by external events.
More often it implodes only partly for some stocks or temporarily and so that not all stocks recover. Every general bear market and every crash of an industry shakes out numerous stocks, but the indices look still well in the long run, which may be one reason why all this is so hard to believe.
You think people like Warren Buffet are constantly disproving the stock market table model? First, Warren Buffet is unique and for every investor similar to him one could find a myriad of not so savvy or lucky ones. Yes, this has also to do with luck. Picking the one that is truly outstanding out of the millions of others is equivalent to spotting trading chances in hindsight. With regard to Buffet there is something else. He has already difficulties to sell many of his holdings, because there is a growing number of Buffet or Berkshire Hathaway imitators. So, contrary to the first impression, he is probably the best example of an individual investor that demonstrates at least aspects of this phenomenon.
The dark secret of the modern stock market
Back to the beginning and the smart looking strategies how to beat the market: Will they not allow you to make money in the stock market? The sad answer is, the private investors and their professional helpers are essentially fighting for a positive piece of a negative cake. The odds are against the investor. Planning the exit of all positions and selling regularly, in other words becoming a trader, would improve his situation. Of course, this is not easy, either. You are still facing the competition of the market maker and his many dirty tricks. He has the advantage and you and other traders are still trying to eat a negative cake.
To overcome this tough environment a trading method or system is necessary. Don't expect to be able to fend off the systematic advantages of others with impulsive decisions. Moreover, you have to have an edge. At least some elements must set your trading apart from what others do. The market constantly adapts itself to the wisdom of the crowd. A working system has to meander around the various traps of the market and still center around a real imbalance and exploit it. Traps and imbalances are hidden. If they were obvious for everyone they wouldn't exist.

Different types of Investors as discussed by Robert T. Kiyosaki

I've read books about Robert Kiyosaki, and if I used words like "Financial Expert" or "Highly Financial Intelligent", in ways he used to discuss about finance. No one would give a doubt on those words. 

In one of his book "The CashFlow Quadrant". I've read about the different kinds of Investors which I think the way he explain is so complete and so I would like to share some of the ways he explained about the types of Investors.

The different kinds of investors as describe by Robert in as below:

Level 0: THOSE WITH NOTHING TO INVEST

These are the people that spend everything they made. According to Robert it also consists of those "rich" people you see out side which they seems like very rich but spend more than they can afford and they will spend more and more. And 50% of adults falls into this categories. 

Level 1: BORROWERS

These are the people that solve their financial problems by borrowing of money. They use one credit card to cover another credit cards. They borrow from one friend to pay for the debts of another friend. 

They loves to pay installment and they tends to buy things that will depreciate in values. They love shopping and always tell themselves "you deserve it". "You're worth it". 

If they have money it will be spent and if they don't, they will borrow. Their problems will always be not making enough money. Even their income constantly growing but it doesn't seems enough for them. Their habits of borrowing, spending and shopping is out of control.

Level 2: SAVERS

These are the people that always put aside small amount of money to save. The money are in low risk, low return such as savings, FD. They normally save to consume rather than save to invest. They believe in paying cash. They are afraid of credit and debt. They like the security of the money in the bank.

Even by showing them that saving turns out negative return (after inflation), they still unwilling to take the risk. They do not know that US dollar has lost 90% of its value since 1950. They often have whole-life insurance policies because they love the feeling of security.

They waste their most precious asset which is time on something small and would save them pennies. They will look for discount, vouchers, coupons, etc.

"A penny save is a penny earn" is something they will tell you. Their almost opposite of Level 1 Investor. 

Level 3: SMART INVESTORS

A total of 3 types of smart investors here.
3a: people here is "I Can't Be Bothered" group. they have convinced themselves that their not good in money or numbers. They are too busy and won't learn about money. They leave everything to financial planner who help them diversified. Work very hard and tell himself he has a retirement plan or saving plans from insurance.

3b: This categories is known as cynic. The know a lot about investment. Too much that they know how it will not work well. They are dangerous people around. Often too intelligent, speak with authority and are successful in their field. They are professionals and read everything they can possibly know about financials. They can tell you how each and every investment will fail and ripped you off your money. Yet these people follows the market and read all financial news. They know about the financial investment jargon. When bad news happens, they will say "I knew it". 

Deep down they can see people getting rich from investment, but security is more than fun. 

Cynicsm is a combination of fear and ignorance, which in turn causes arrogance.

They often enter market swing late, waiting for the crowd of social proof that their investment decision is right decision. Because of the wait, they buy late normally at market top and sell late as well. They will get ripped off most of the time. Everything they were so afraid of happening happens again, and again. 

Worst Cynic is among those academia, government, religion and media who only want people to acknowledge them when something turn out not right. But when things turn out well, they will talk less and jump into the market late.

3c is the gambler. They treat investment just like gambling and they don't set rules nor having any principles. They will love it when the market turns out in their favor but most of the time they will be ripped off. They always look for the holy grail and search for secret of investing. They loves tips and shortcut. They jumps into any kinds of investment and trying to win big but usually strike out. They only remember the one stock they pick that wins but ignore those that they have loss. 

Level 4: LONG TERM INVESTORS

These groups of investors aware of the benefits of investing. They are actively involved in their own investment decision. They have long term plan and objectives. They seek advice from competent financial planners. They invest in real estate, business, commodities and other exciting investments but taking conservative long term approach. Most millionaires in America are in this categories.

Level 5: SOPHISTICATED INVESTORS
They afford more aggressive or risky investment strategies. They have good money habits and solid foundation of money and is also investment savvy. They cut losses and usually focus and not diversified. While hating to lose but they are not afraid of losing. They look at loss a lesson. They are clear with principles and rules of investing. 

Level 6: CAPITALISTS

Few people in this world reach this level. They are people who change the world, creating jobs, creating economy and create investment of themselves to help people. They do not being just rich but they make others rich as well. Involving in projects, products, company that masses find it popular. Names like Henry Ford, Steve Jobs, Bill Gates are from this category.

Which one are you?

Life of a Intraday Trader..

Trading US equity Market

After your dinner, you look at the clock and it shows 8pm. You played with your kids for a while more and you go to your working desk. Switch on your laptop / personal computer and starts to read some major news. 
You open up your trading platform and you do your analysis on stocks. You draw some technical data onto the basket of stocks you monitored and you're ready to start your day. 

9.30pm (Malaysian Time), US Market opening bell rings. You monitor the stocks and the price movement and you're reading once again on the market data. You're confident that the trade is good and the opportunity is up and you put in your entry. You set your stop loss and you place your alert. 


You continue to watch news and monitor other market data. You watched your trade and it turn out to your favor. Around 12am at night you look at your summary with an unrealized gain of US300, you're satisfied and you think it reaches the target profit. You close all your position and happy with what you've made for the day. Switch off your laptop and you're prepared to read some books, watched some movies before you go to sleep...


You can even start your day ANYWHERE in the world as long as you have internet. 


Now would you like such a life?

How to trade stocks online?

Trading in stocks is no longer the same like 10 years ago. With the revolution of Internet, trading stocks is now much easier, faster and cheaper. I strongly urge all of you at least to try and open up an online trading account even if you're not ready to start your trading business.

Benefits of Online Trading
1. You get cheaper brokerage fees. Normally in Malaysia it will up at a rate of 0.42% compared conventional brokerage fee which can be up to 1.25%. That's more than 50% saving.


2. Connect directly using the web and provide you with faster and better view of the price and volume compared to using a remisier.


3. You'll be able to check out more data such as volume, moving price range, chart, some technical data, etc and these data is difficult to provides to you by your remisier.


4. You can check out your stocks anytime, anywhere as long as you have Internet connection. Go traveling around the world and still monitoring your stocks. 


5. Better control of the price by setting Good To Date and Good to Day which means you won't missed the chance of buying it when the price dropped until your desire price.


You see that there are many advantages of online trading. How do you get started?

1. If you're already having a trading account with a stockbroker, you'll just need to inform them you need to activate your online trading which normally comes free. 
2. If you're new to stock trading. Go to any stockbroker of your choice and open up a trading account and tell them you need to have online trading. They'll assist you in opening up your CDS (Central Depository System) with a mere RM10.
3. You're required to also provide them with some documents including of your income statement, IC. 
4. You'll need to deposit a minimum amount into the trading account but this differs for different stockbrokers. 


I personally used CIMB Securities for Malaysia's stock market due to my preferential rates with them, however I saw RHB Investment Bank providing an online trading platform that is quite impressive and you may check it out.