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A technical analyst may impress you with all his technical jargon but how many
times does he actually hit the bulls eye? Since technical indicators do not care
much about any fundamental change, did his chart tell you precisely where the "support"
would be when the KLSE fell so sharply recently?
Many people just entering the financial world will be baffled by the inaccuracy of
some investment forecasts given by professional market analysts. Poor stock selection
is often the main cause behind many fund manager's poor performance. Thus, given
the analysts and fund managers' poor predictive performance, would an investor be
required to form his own opinions? After all, it is your money that is at stake.
So do you think you are ready to invest or manage your money more seriously after
a few years exposure in the local stockmarket or now that you have accumulated enough
tips from the all the books written by acknowledged investment gurus?
Remarkably, there are some investors who manage their money better than fund managers.
Some people outperform a fund manager by simply buying some good stocks and hold
them over a longer time period.
Perhaps this explains why investment guru Warren Buffet, with his simple technique
of "buying and holding" is regarded as the 20th century's prime investment
success.
There is no great secret behind Buffet's excellent investment success. Simply buy
the best and hold regardless of the market volatility as long as it retains its quality.
If you are thinking of setting up your own investment funds. Here is one solution.
Simply buy a selected portfolio of blue chips, be patient and wait for the returns
in years to come (long term investment).
If your capital permits, include bonds and some other form of securities for diversification.
There will be no management fees and whatever extra marketing charge. Everything
is under your control, both the risk and reward.
On top of everything, it is easier to be said than done. In the local environment,
you may not be able to get all the information you need for your decision-making.
In order to make wise investment decisions, quick and reliable information is a prerequisite
to form intelligent investment decisions.
Newspapers alone will not help much. But the real problem lies with the fact that
local investors are not interested in studying too much but would prefer to purely
listen to market rumours to invest.
You have to do more homework if you decide to manage your own money. You will have
to allocate more time for your investments and you have to basically think more systematically
and long-term which is pretty hard for local short-term speculators who claim to
make fortunes in a very short time frame. In addition, you may not have the precious
time to check the progress of your investment.
Some investors subscribed to investment advisory services and this is not, idea especially
if you are not familiar with the investment world.
In conclusion, as the market is growing more intense with so many funds to pick from,
investors should be more demanding to get back the value for their investments. Be
more critical in assessing the performance of the fund managers.
Remember that they are paid to perform for your hard-sum money. If the friend cast
you have invested have not been performing compared to other funds for the past several
years, act promptly - dump the fund manager. Be extremely selective as there are
many more fund managers available in the market now as compared to the past several
years. As an investor you deserve what is best for you.
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