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