- First house
- First car
I do dollar-cost-averaging for all the funds as advised by the book, in which I put in RM100 monthly via standing instruction for all of them. So, it is a forced saving of RM500 a month.
Now, all the 3 unit trust funds will be my children education fund. Retirement fund & others will be in the stock market directly.
The smallcap & PIOF are aggressive funds while PDSF is more on the conservative side.
For those who have no time or interest to invest directly in stock market, unit trust might be a good option as a safer investment tool that beat the fixed deposit. History has shown that unit trust can fetch 8-10% annually.
As shown in the graph of Public Dividend Select Fund above, it has gained more than 170% since its inception in May 2005 which is 9 years ago. But if you buy this fund in the end of 2007 or early 2008, you will suffer loss for 1-2 years. If you keep longer, you will reverse the loss and gain even more.
We have to pay a management fee of around 5% to the fund managers but only when we do initial or additional investment. In the long run, as unit trusts also pay dividends and appreciate in value, the little management fee will be well worth it.
Anyway, unit trust will remain one of my diversification in investment and I will continue the practice of dollar-cost-averaging in my 3 existing funds.
As for the "Financial Freedom" book above, I highly recommend it to every person who wish to know the basic of financial planning.