What does it Mean Unit Trust Investment is Better than Stock Investment?


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The article on “Unit Trust Investment: a Better Choice than Stock” is recently getting to the top spot of reader’s attention. Up to today statistic, it has attracted 3,898 views since published on October 16th, 2017. It often appears in the “Recent Top View” article category amount hundreds of other articles in my blog website, I feel the burden to write again to clarify what I mean by investing through unit trust over the choice of stock investment.

First of all, the article only appeals to those who are serious about finding an effective tool for investment. It does not write to those who want to find thrilling experience in the money business enterprises. Unit trust investment is a slow-going investment vehicle. It does not generate heap and high effect psychologically. This is good enough that it will not lure or breed your greedy nature. Rather, it trains your patience and keeps your greed and fear at bay.  

Secondly, it doesn’t mean you will earn more than stock investment in short time. But more earning will come when you do not lose money as fast as stock market vehicle. Especially true when you find your correct way of investment. So,you still have to learn investment strategy even though you use unit trust as your investment choice.

Thirdly, I do not advocate passive investment like other professional sale agent who promises guarantee return when you invest through unit trust because there are professionally trained fund managers helping to manage your investment. You can set back and relax. Let them do their investment job! No, this is not the way to invest through unit trust. (For more discussion, please read “Misleading Information No 1. Unit Trust investment is Safe.) If you do that, you will lose money with no difference than buying stock. You still have to do your homework and be aware and alerted about financial market development.

But the difference with buying stock is that you don’t need to do those detail, rigorous and guessing work. You only need to keep yourself updated about macro-economic development only. If you are busy, afraid to miss anything, I have often help investors to keep themselves updated and alerted with related news articles. You may subscribe to my Facebook page at “Invest Interest Group” if you have not done so.  

Fourthly, I do not recommend any investor to just drop your capital in any unit trust provider and leave it there for years. You need to find a good platform, which not only charges low cost at entry prices, but also allows you to do free switching at will anytime and provides globally available fund choices for you to switch back and forth without additional charges. Such kind of unit trust platform available for Malaysian will be like Fundsupermart, or Phillip Mutual Bhd.  

At the end of the day, you still need to monitor, such as doing switching for your own fund at appropriate time, build your own risk managed portfolio etc. The purpose is to maximize return. But this kind of effort will come much easier compare to stock for different degree of magnitude in volatility. You don’t have to gaze at the computer stock screen hourly or daily. You may only check once a week or even once a month.  

For all in all, we all have to recognize that there is no free lunch on earth. We all have to earn our profit for living. But the effort is much comforting and rewarding especially when you are considering retirement in few years’ time ahead of you.

Happy investing but invest safely!  

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Disclaimer

The view and opinion expressed are personal views of the author and are subject to change based on market and other conditions.  This write up does not constitute sole advice for investment decision. Investors are advised to do further reading and research to conclude individual decision.

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