2020 Massive Selldown: Hold or Cut Loss?

So we are here. This is indeed a massive sell-down.

In 3 weeks’ time, the massive sell-down managed to wipe out all 2019 gains of the Dow Jones Index. At home, our dear KLCI index has also dropped close to 20% since the start of the year.

To give you a perspective of how strong the magnitude of this sell-down is, picture this:

It just took 16 days of move in our current S&P 500 sell-down to reach what the 2008/09 Global Financial Crisis managed to achieve in 200+ days.

The Key Question Now: To Hold on to Your Investments, or to Cut Your Loss?

Now, this is a tricky question to answer.

First of all, for the whole context of this article, I am assuming that you are facing a paper/unrealized loss from your current positions.

In my opinion, this question needs more than an irresponsible short ‘Hold lah the market will recover’ or ‘Just cut loss lah’ respond like most content and posts you are seeing out there on social media.

It is also extremely irresponsible to sugarcoat the question and be overoptimistic at this moment.

Instead, it deserves a more comprehensive writing that includes multiple perspectives of different investors’ contexts.

This is what this article is all about, and this is the least I can contribute to the investing community as a creator (and a developing investor & trader) at times like this.

A quick disclaimer beforehand: This is by no means an absolute Buy/Sell/Hold advice. This is just an article from a random dude so please seek a professional financial planner’s opinion before making any decision.

With that, let’s start.

Which of these Descriptions Suit You Better?

Context 1: The Legit Long-Term Investor

It has already been part of your plan to hold your investment (single stocks/the whole portfolio) through this market climate from start – way before you enter this trade.

You feel minimal mental pressure and anxiety seeing your investments tumble more than 20-30%, or even 50% as it is in your game plan to hold through times like this.

These people are the group of legit long-term investors that really know what they are doing and have total confidence with their plan. If you are in this group of long-term investors, there is no reason at all for you to cut loss because holding through this market climate is part of the plan.

For the others though, it is common to think that you belong to this small group of legit long-term investors. If that’s the case, I want to challenge you to ask yourself:

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    1. Did you decide to go ‘long-term’ on this investment BEFORE you enter this trade, or AFTER you experience this crash?
    2. If this sell-down is not a sign for you to exit, then WHAT is your exit plan?

You SHOULD have an exit plan, and it should not take longer than a minute for you to figure this out because your exit plan is already been set before you enter a trade.

    1. More importantly, can you sleep peacefully knowing you are down 20-30%, or even 50% on your investments?

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If you felt any sense of doubt or uncertainties in while answering my questions, you are NOT in this group of legit long-term investors.

Context 2: The 99% That Need to Cut Loss

Now, if your ego is not in the way and you are humble enough to admit that you have never really thought about an EXIT PLAN for your current investments, stopping the bleeding and cut loss is the way to go.

Now, let me elaborate a little on this 99% of people that need to cut loss:

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  1. Your Pre-set/Mental Stop Loss level memang Got Triggered Already from this Sell-Down.
  1. You DID NOT have an exit plan in place BEFORE you buy into this particular investment/share.

An exit plan could be something like ‘If the price drops below X, I will cut loss”, or “If fundamental shows a decline in profit for X quarters, I will exit.”.

  1. You got into this investment after watching or reading a video/post from a stock investment Facebook page.

Actually, you are kind of still waiting for these Facebook forums/pages to tell you whether to continue holding or to sell.

  1. You cannot handle the mental stress of a 20-30% move going against you.

Which is absolutely normal because we all are humans, and everyone has a very different risk tolerance.

To be Clear, It Takes (a lot of) Courage to Cut Loss

You have my full respect already if you are still reading till this part as most people would have gone into a full denial mode after experiencing such paper loss – I salute your courage.

Remember, unlike what most content and posts are saying out there, there is nothing wrong at all to cut loss if your Stop Loss is long triggered AND/OR you realized that you have been doing this whole investment thingy wrong from the start.

Better to take in this lesson and start afresh with a more proper mindset, right?

Read: How to Recover from a Slump?

Why Cut Loss/Sell?

Having been through the mental challenge to Cut Loss, I understand that “Just hold on lah the market will recover long term” is the most soothing sentence that one seeks to hear at times of paper/unrealized loss.

However, I feel there is a need for me to break the false hope and tell you why ‘Holding On’ may not be the best action for most everyday investors:

(1) Psychology and Mental Stress

If you never have proper prior experience with the market and never knew what you have been doing all this while, it will be very hard or you to hold through this downturn.

By now, it should be clear that this sell down is NOT a normal pullback/correction. The magnitude of this global sell down is at its historical record.

The downturn and sell down like what we are facing now challenge the mental state and psychology of even the most experienced and prepared players in the market.

It is easy to say ‘Hold through the downturn and wait for the recovery’ but how many people, especially those who’ve been in the market without prior knowledge and experience can handle the emotional and financial pain from holding a sharp falling knife?

Fastest S&P 500 correction in history. (source: 2nd Skies Trading)

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(2) ‘This Company is Too Big to Fail’ Myth

To clarify, most market (at least the index) does recover and trend higher after a recession, no doubt about that (just look at the S&P 500 and our very own KLCI).

However, it is foolish to say that any company will survive and recover from a massive selldown/recession.

If there is anything that the world has learned from the global financial crisis, it is that even giants fall.

And even if they do not fall, some may not be lucky enough to recover from the crisis (picture below).

Not all companies can survive and recover from a recession.

(3) The Silver Lining: Cutting Loss is actually Preparing You for the Long Term (Opportunity Cost)

If you have been ‘investing’ without proper knowledge and processes, or via Facebook social media tips for the past years, you are not actually ‘investing’.

You have been gambling all these while.

“But man, I made money!”

Well, to be honest, anyone can easily make quick bucks in the longest bull run in history.

That said, a bearish sell-down requires a whole lot of psychology and different skillsets from an investor. Market movement and price action in a bear market are fundamentally different compared to a bull market.

Hence, in scenario like what we are facing right now, cutting loss might actually be a good thing for you in the long term. Consider this:

You are now holding a portfolio/share value worth RM50,000 with an RM20,000 unrealized loss – and you’ve built this portfolio up based on tips from some investing and Facebook forums, alongside some vague understanding towards the market.

Instead of holding on to a mistake, why not cut your loss then and there and make use of what’s left of your capital to learn the proper way to invest?

Invest a few hundred or thousand ringgit and equip yourself with proper investing knowledge and processes and store your remaining bullets (cash).

If you can survive this sell down and learn the proper method, you can (AND WILL) be able to live to fight (invest) another day.

Read: Why You Shouldn’t Care About What Stock Investment ‘Influencers’ are Buying on Social Media (Especially Right Now!)

No Money Lah Verdict

To be clear, as the market develops, I am also learning and picking up new lessons and skills as well.

That said, as I am writing this, I have come across many close friends that have approached me for opinions and thoughts.

This made me realized that many people have, in fact, been ‘investing’ in the market without proper mindset, knowledge and fundamental skills, which motivated me to write this article:

There is nothing wrong to HOLD, IF that’s your game plan.

And unlike what most content and post are suggesting on social media, there is ALSO nothing wrong to CUT LOSS if your stop-loss levels are triggered. (or if you memang do not know what to do all these while and was just blindly following tips on social media)

The point is to protect your mental confidence and what’s left of your capital.

The market DOES NOT care about your EGO.

The market DOES NOT care about your need to be RIGHT.

Again, as long as you can protect your capital and confidence, you can always live to fight (invest) another day.



The Hard Truth: Why You Shouldn’t Care About What Stock Investment ‘Influencers’ are Buying on Social Media (Especially at Times Like This)

So, the inevitable has happened.

With the fear and pressure from Covid-19 pandemic and drop in oil price, the market has gone real bad.

As an example, Dow Jones has just dropped by 20% from its previous peak and entered a technical bear market earlier today.

At the same time, for the first time since 2008/09, the VIX (Market Volatility) Index had a daily close above $53. Also known as the Fear Index, this means that the market is generally in fear and expects huge volatility moving forward.

In short, just like the story of ‘The Boy Who Cried Wolf’, the wolf has, in fact, arrived at our doorsteps.

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The VIX Index

At times like this, it is not rare to see (more and more) social media stock investment gurus/influencers posting about the stocks that they are accumulating at low for ‘long-term investment’.

However, I am of the opinion that these posts, if not conveyed properly (as discussed below) are deeply irresponsible and you SHOULD NOT be taking 99% of these posts seriously.

If you have been consuming the content from these stock investment gurus/influencers for tips to get over times like this, this is the cold, hard truth that you need to hear:

  1. 99% of These Posts DO NOT Tell You the Whole Picture

Yup, I know that this stock investment guru has posted about accumulating Tesla at low. Perhaps, this guru even shared about why and how he entered the trade.

But this post only covered 1/3 of the whole investment plan.

Do you know their exit plan? Do you know the If/Then statement that the guru has in mind should certain changes in fundamentals happen? And more…

  1. Do You Know How Long is this ‘Long-Term Investment’ Going to Be?

“I am holding this long-term.”

But how long is ‘long-term’ for this guru? Did he/she mention the timeframe at all? How long is this guru going to hold this investment?

Weeks? Months? Years?

Even so, without knowing the basis of the investment plan, do you have the courage to hold these investments if the price keeps tumbling after you follow this guru’s entry?

  1. YES, You are Going to have a Different Risk Tolerance Compared to this Guru

This guru/influencer that posted this stock that he/she just got in may have the patience and risk tolerance to hold through a 20 – 30% further drop in price.

But can you do so? Can you handle the mental pressure of price going against your favor for even, say, 10%?

Know your investment plan: Do Your Homework and Due Diligence.

  1. Heck, Some of These People May Not Even Know What They are Doing

The irony is, it is much easier to write and spread bullshit investing ideas and concepts nowadays via social media platforms.

Spot for Facebook and IG pages that ONLY show off about how much they’ve earned – this is the biggest red flag that you should stay away from these pages or individuals.


Instead, What Should You Do?

  1. Formulate Your Own Investment Plan

If you have any prior (proper) experience in the market, learn to be independent and formulate your own investing plan.

What’s your entry plan? What’s your exit strategy? What’s your If/Then statements if X or Y happens?

Having all of these processes done properly will give you the confidence on when (and when not) to take action and stick through your investments at tough times.

Shameless Plug: For those who are not familiar, I share about how to formulate your own investment plan and processes in my upcoming REIT Investing Workshop. Details HERE.

  1. Focus on Reliable Passive Investing Solutions

If you are not familiar with how to manage your investment actively, definitely check out reliable passive investing platforms like StashAway and Wahed.

These platforms use financial algorithms to invest on your behalf and rebalance your investments according to the market situation.

(p.s. I highly recommend StashAway for the general public, and Wahed for those who are looking specifically for Shariah-compliant passive investment.)

  1. Focus on Wealth Preservation

Of all, make sure you have enough cash flow while not simply pouring them into the market based on tips!

Once you learned how to formulate your investment plan, this cash will act like bullets for you to take advantage of when the time is right.

No Money Lah’s Verdict

Stay calm, stay rational, and be healthy.



The Cheetah and How a Struggling Trader/Investor can Learn from It

 

Many people that traded and invested in the stock market (or any market, in this case) experienced great volatility for the past few weeks.

Some made a kill, nailing their yearly return goal in a week. For many, though, it was an overwhelming time filled with emotions and anxiousness.

You are (were) probably in the red. You are (were) probably underperforming. You are (were) probably beating up at yourself for this outcome.

The reality is, this is a path that every investor and trader MUST experience in his/her journey. The difference is how one handles this hurdle that makes up to an amateur and a consistent investor/trader.

 


 

How to Climb Back Up from a Slump?

To be clear, it is NOT EASY to recover from a slump. Mathematically, it is hard (eg. a 50% drawdown will take a 100% gain to breakeven). Emotionally, it is even tougher to get back on track.

In times like these, it is crucial for one to go back to the BASICS.

Stop looking around Facebook groups and investing/trading forums for tips for the NEXT big opportunity.

Quit those groups if needed – these are noises that hardly contribute to your recovery anyway.

The point is, stop making investing/trading so complicated and difficult.

 


 

Back to the Basics

What are the trades that work the best for you? Make a list and focus on only taking these trades for time being – with smaller size.

If you are a long-term investor that has just dumped your holdings due to panic and fear, look into your investing process – have you followed your entry & exit strategy? Do you have one? Work on them one by one.

The point is NOT to remake your losses immediately. Rather, it is for you to rebuild the mental confidence towards yourself FIRST.

 


 

The Cheetah

 

 

“The cheetah, while the fastest animal on the African plain and can outrun any of the prey it feasts upon, always chooses to go for the young, weak or sick.

Once identified, it attacks with laser-guided focus and effectiveness. It is only then that the kill is most likely. That is the epitome of a professional trader.”

This is one the of most resonating trading analogy that I’ve come across lately in an article by Mike Bellafiore of SMB Capital (one of my favorite role models in trading).

As extraordinary as a cheetah is, it still focuses on the most basic kills which are also the most effective ones.

Likewise, the goal for us as an investor/trader is not to try to be smart and predict whether the market is bottoming. Rather, it is to understand our strength and take the best opportunity with probability in our favor.

Know your strength. Go back to the basics. Be a cheetah.



Wahed 2020 Review: The First Halal-Investing Robo-Advisor in Malaysia with Huge Potential!

Late last year, I was introduced to Wahed, a robo-investing platform that prides itself on being the first halal investment robo-advisor in Malaysia.

Less than 4-months of launch in Malaysia (Wahed was started in New York), Wahed has been making an impression among fellow fintech and investment enthusiasts.

Being an enthusiast myself, I have also signed up for a Wahed portfolio to personally try it out myself, and got an RM10 FREE bonus while doing so  (remember to apply my promo code “YIXCHI1” to get the bonus!). 

In this article, let’s dive deep into Wahed, and see if this is a robo-advisor that you should invest in!


(1) First thing first: What is Wahed?

Wahed is a robo-advisor that helps invest your money into Shariah-compliant investments*.

What differentiates Wahed from other robo-advisors is that they are the first company that has received an Islamic Robo Advisory license from the Malaysian Securities Commission.

As such, Wahed also takes up an important role in fulfilling the Malaysian Muslim community that is looking for an investment platform that is aligned with their values of life.

*For readers who are unclear, Shariah-compliant investments are investments governed by the requirements of Shariah law and the principles of the Muslim religion.

Wahed Invest is one of the new robo-advisor platform in Malaysia.

(2) Who Certifies Wahed’s Shariah compliance?

Wahed’s Shariah review is done by their Shariah Advisor, Dr. Aznan Hasan.

Dr. Aznan is the President of the Association of Shariah Advisors in Islamic Finance & Deputy Chairman of Shariah Advisory Council of the Securities Commission (SC). He is also a former member of the Shariah Advisory Council of Bank Negara Malaysia (BNM).

Wahed also has Straightway Ethical Advisory LLC (a US-based Shariah financial advisory firm) to advise them on matters of Shariah compliance and Islamic financial ethics at the group level.

Source: Wahed’s Official Site


(3) How Wahed Invests Your Money?

Now, though positioning themselves as the forerunner of halal investing, Wahed is at its core a robo-advisor that invest on behalf of their users too, just like its competitor StashAway and Mytheo.

Hence, Wahed is definitely a robo-advisor that you should not overlook if you are looking to build your passive investing portfolio, regardless of your religion and background.

(a) Fund Management Methodology

Just like its robo-advisor competitors, Wahed’s fund management strategy is powered by its proprietary financial algorithms. This means that there is no way we can back-test the strategy ourselves aside from the information shown at Wahed’s official site.

Unlike StashAway’s ERAA methodology, there is very little mention of how exactly Wahed manages the users’ funds.

That said, Wahed does mention that its financial algorithms are derived from the Modern Portfolio Theory (MPT). Essentially, the idea behind MPT is to help an individual create optimal portfolios that are tailored to the needs of the user based on one’s risk tolerance.

Personally, it is a little bummer to see so few details about the investing methodology employed by Wahed on their website (Wahed, take note).

More explanation about the investing methodology behind the scene would be very helpful.

(b) Investment Instruments: 5 Major Asset Classes

The good thing, though, is Wahed does give us an idea of what they are using their users’ funds to invest in.

As per my experience**, there are 5 asset classes that Wahed will invest our funds in, namely:

    1. US Stocks (Wahed FTSE USA Shariah ETF)
    2. Malaysian Stocks (MyETF MSCI Malaysia Islamic Dividend)
    3. Sukuk (Islamic Bond) (RHB Islamic Bond Fund)
    4. Gold (TradePlus Shariah Gold Tracker)
    5. Cash

There are 6 different risk profile that you can choose from. Depending on your risk profile, there will be a difference in the allocation of your funds across these assets.

**Information on assets and asset allocation is accurate is per my record when I signed up for a Wahed account. Unfortunately, unlike StashAway, Wahed does not reveal the total number of asset classes that they can invest in.


(4) Fees Comparison: Competitive, But Can Be Better

One big advantage that robo-investing services have over conventional mutual funds is its fees.

Generally, while typical mutual funds have an average fee of 3-5% per year, robo-investing services charge only a fraction of the fee (<1%).

This is important, as a few percentage differences in fee could mean a lot to your return. Here is a simple calculation to give you an idea:

 RM100,000 at 5% fee per year = RM5,000 on fees.

RM100,000 at 1% fee per year = RM1,000 on fees (and no, robo-investing services offer lower fee than 1% at RM100,000).

The question now is, how are Wahed’s annual fees compared to the other presently available robo-investing platforms – StashAway and MyTheo?

Now, every robo-investing platform has its own tiers of pricing. Hence, to make my life (and yours) easier, I am comparing the fee in terms of the category of fund amount:

Full fee details: StashAway, Wahed, MyTheo.

Now, as you can see, Wahed’s annual fees are competitive, and it gets even cheaper when your fund exceeds RM500,000 and above.

That said, in terms of versatility of fees, I think StashAway is still the robo-advisor to beat.


DON’T MISS THIS: Click HERE to Get an EXCLUSIVE $5 (RM20) BONUS When You Fund Your Wahed Portfolio today (REMEMBER to apply my promo code “YIXCHI1”)!


(5) Customer Service: Up Your Game, Wahed!

At this point in the article, I would like to say that while lower fees are important, it is not everything. A lower fee that compromises the overall customer experience is a NO-NO.

After all, what’s the point if a company has a low fee but no one is attending to customers’ issues properly?

To test out Wahed’s customer experience, I sent out inquiries to all 3 channels of customer support (as stated available in the Support section of the app): Email, Phone & WhatsApp, all during office hours.

Firstly, Wahed’s response time for email is decent. However, I failed to reach out to the support team via call and it is also disappointing to see that there is no WhatsApp chat support available yet.

As a whole, I think Wahed has to really up their game to stay competitive in customer experience when competitor like StashAway is already providing more support channels for users to reach out to them.


(6) How to Open an Account?

Opening a Wahed account is simple and can be done in less than 10 minutes (Click HERE to install the Wahed app on your phone). And while doing so, remember to apply my promo code “YIXCHI1” to get an RM10 FREE Bonus when you fund your Wahed portfolio!

The account opening process is also straightforward. You will be asked about your investing goals and your savings in order to identify your risk profile.

Then, you will be recommended with one of the 6 portfolios from very conservative to very aggressive. Of course, you can also choose your own portfolio if you have a personal preference.

Once you completed all the procedures, it will take a few days to get your account verified and you are good to start!

You will be recommended a portfolio upon completion of your profile.

(7) What do I like About Wahed?

(a) Huge Market Potential

What Wahed is providing is truly one of its kind at the moment, and fits in well with the demographics of the majority Muslim community in Malaysia.

In short, Wahed is the to-go robo-advisor platform for people that are looking for Shariah-compliant investments.

(b) Help in Promoting Ethical Halal Investing in Malaysia

Given its unique positioning, Wahed is a great platform to promote halal investing to fellow Malaysian users regardless of religion and background – of which I like its core principles and concepts.


(8) What Could be Better?

(a) Customer Service needs Some Work

As discussed above, Wahed needs to put more effort to improve its customer service. That said, I do understand that Wahed has just launched in Malaysia (Oct 2019) and may need time to build up their Malaysian team.

On this matter, I will revisit Wahed’s customer service in my review next year and see if there’re any improvements.

(b) App UI needs Refurnishing

One thing that annoys me while using Wahed’s app is that the app interface seems to have issues showing the last letter and decimals of the word and numbers (eg. Overvie’X’ and RM100.’XX’). This may be something that Wahed will have to resolve with their backend team.

Wahed must improve its UI.

(c) Minimum Deposit of RM100

Unlike competitors like StashAway that has no minimum deposit, Wahed has a minimum deposit of RM100.

While this may not be a big issue, but it is definitely not as flexible as other robo-advisors around and I would love to see this minimum being lifted in the future.

(d) Only 1 Portfolio for each User (for Now)

As of the time of writing, there is no way for me to create another portfolio in Wahed other than the one I’ve created when I opened my account.

Meaning, I am not able to open a Moderate risk portfolio if I started off with an Aggressive risk Portfolio.

This is kind of a bummer because, in comparison, StashAway allows multiple portfolios of different risk profiles.


No Money Lah’s Verdict – A Robo-Advisor with Huge Potential

Is Wahed a good robo-investing platform?

Personally, I feel that Wahed has done a good job of positioning itself at the forefront of halal investing in the robo-advisor space.

Not only that, I’ve also heard good feedback from the Malaysian community, especially their awesome referral reward: Fund a minimum of RM100 and get RM10 FREE Bonus – Instant 20% Gain!.

If Wahed is able to enhance its customer service and user experience, I foresee that it will definitely give competitors like StashAway and Mytheo a good run of their money.

If you find this review on Wahed useful, my suggestion is to TAKE ACTION on your investments RIGHT NOW: Time wasted on inactions is more painful than money badly managed.

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p.s. Which Robo-Advisor Should I Invest In?

Now, if you are wondering if you should go for one robo-advisor over another, why not try investing in these platforms and see which one fits you the best?

StashAway: Claim your EXCLUSIVE 50% off your fees for 6 months when you use my link HERE!

Mytheo: Enjoy FREE 3 months management fee when you use my link HERE!


Disclaimers:

  1. Past return is not indicative of future performance. (just like your mom may not be angry at you today doesn’t mean she will not get angry with you tomorrow) 
  2. Now, one thing that I have yet to comment is Wahed’s return. As Wahed is still new in Malaysia (since Oct. 2019), I cannot comment on the return – and neither you should take others’ words as it is. I will keep monitoring the return and give my feedback in my 2021 review. 
  3. This post may contain affiliate links that afford No Money Lah a small amount of commission should you sign up through the links.

 


My 2020 Goals: This Year, I am Allowing Myself to Say ‘No’ Without Feeling Guilty Anymore.

Have you ever been in a situation where you said ‘Yes’ to something or someone when deep inside, your answer was a big ‘NO’?

Even worse, have you ever felt really guilty after saying ‘No’ to something or someone?

That is, without doubt, one of the worst conflicting feelings ever.

But here’s the thing:

If you say ‘Yes’ to everyone and everything, chances are you will have to say ‘No’ when it comes to things & people that matter the most to you.


My Goal in 2020

2020 is an important year for me.

This year, if I were to put a theme to it, is the Year of Trading Mastery.

For me, I have always enjoyed trading, not for the reason that you may assume.

I am passionate about trading because it pushes me to become a better version of myself. Trading taught me to face my fears and ego. Trading inspired me to embrace my curiosity and keep learning. More importantly, trading empowered me to take full responsibility for my own emotions and life.

Hence, in 2020, my goal is to pursue a professional trading career in proprietary trading firms (firms that trade their own and/or clients’ funds).

Personally, I see this as a natural transition in pursuit of bigger opportunity, knowledge, and mastery in my craft.

With that in mind, having a goal is not enough. According to Jay Shetty in his recent podcast ‘4-Tier Framework to Effective Goal-Setting’, it is even more crucial to focus on your growth than the goal.


Eyes on Your Growth over Your Goals

As important as my goal is to me, the growth towards my goal is even more crucial.

This section definitely deserves a whole article on its own (which it will), but here is a brief idea of my action plan to improve and grow towards my goal, which I am presently (and consistently) practicing:

    1. Technical Skills: Allocate time daily to practice my technical & pattern recognition skills. (eg. Reading Price Action & Order Flow) – Practice, Practice & Practice.

       

    2. Mindset & Psychology: Spend an average of 2 hours daily in the study and practice of psychology, mindset & peak performance (which I really enjoy doing).

       

    3. Morning Flow Routine: Meditation, Affirmation, Visualization & Gratitude Practice (45 minutes).

       

    4. Health: Exercise 30 minutes daily (normally at night).

       

    5. Review & Feedback: Daily End-of-Day journaling, weekend & monthly trade review.

(Side note: For those who have an unrealistic expectation about trading, now you know the effort and commitment it takes behind the scene – which still DOES NOT guarantee an outcome)

The point is, all my priorities and the things that I am doing (and will do) in 2020 WILL focus mainly on the pursuit of my goal…


…Which is Why I must Start Learning to Say ‘No’

To be frank, I really, really, hate to say ‘No’ to people.

In the past, I will feel bad for rejecting a random long-time-no-see friend’s request to meet. I will feel guilty for saying ‘No’ to people/businesses that want to collaborate with No Money Lah but may not be of good fit to the theme and value of my blog (which, by the way, is my personal space).

And worse, I will feel shitty in the sense that I feel obliged to come out with reasons to say ‘No’ everytime.

That said, that WILL NOT be the case in 2020.

In 2020, I WILL say ‘No’ to protect my priorities without feeling bad.

In 2020, I WILL say ‘No’ to people and opportunities that do not contribute to my goal and values.

In 2020, I WILL say ‘No’ without feeling guilty and the need to give reasoning to do so.

For all of you – friends, readers and potential collaborators that are reading this, I am hopeful that you will not take any of my ‘No(s)’ personally.

By every means, all of you are my great source of motivation and inspiration, and I am eternally grateful that.


Here are 6 Things that I Gonna Say ‘Yes’ to in 2020:

    1. Experience & opportunities that will contribute to my career goal and my growth as a trader.

       

    2. Meeting inspiring people of the same values and goals that will drive my growth.

       

    3. Anything family-related & my 2-lifetime friends (you know who you are :P).

       

    4. Once-in-a-lifetime opportunity (eg. Meeting Bill Gates or Warren Buffett).

       

    5. Collaborations that will add value to me and my community of readers in terms of personal growth and finances - considering my personal capacity.

       

    6. Collaborations on disruptive and/or exciting financial products & services - considering my personal capacity.

Other than that, any kind of casual socializing and gatherings would be secondary in my priorities.

I cannot emphasize more about the importance of having clarity about what you would say ‘Yes’ to in 2020. Again, we MUST set boundaries to opportunities we will say ‘Yes’ to at the start of the year or we will end up achieving NOTHING by the end of the year.


Verdict: Say ‘No’ For More in 2020

You got to learn to say ‘No’ without feeling guilty in order to have more in life.

It might sound weird at first, but it is true.

The irony is, saying ‘No’ reduces distractions and enables us to place more time and energy to work on the growth we need in order to achieve our goals.

Nothing is more frustrating in life than to end the year knowing that you are nowhere near the level of growth you desired – all because you are working on so many other unrelated things.

With that, I wish for your breakthroughs and success in 2020!


Side Note: The Role of No Money Lah in My Life for 2020

First of all, no worries!

No Money Lah will remain my personal space where I will continue to write about intriguing personal growth & money lessons in my adulthood journey.

In fact, in 2020, I have built a more systematic approach towards my writing routine to allow me to work on my content efficiently.

I will continue to write about my personal thoughts and money & investing. Perhaps, I will even write more about trading and psychology too!

If you would like to see more people benefiting from my content, consider supporting me through any of the channels by clicking the 'Support Me' button below! 

As always, thank you so much for your support for the past year and I truly, truly appreciate it. :)


3 Ideas to Maximize the Return of Your Angpau Money (Tried & Tested)

Gong Xi Fa Cai! Gong Hey Fat Choy!

Happy Chinese New Year everyone – may this new year showers you with health and wealth!

If you are like me, you know that growing up, we do not get to keep our angpau money. Instead, our angpaus are being kept and managed by our parents.

The good thing? It prevented us (the child) from spending on unnecessary stuff. On the flip side, it made a lot of us pretty bad angpau money ‘managers’ upon growing up.

 If that’s the case for you, here are some solid suggestions (which I personally do) on how to best make use of your angpau money!

 


 

#1 Invest them! (Starting from RM0)

Getting your angpau invested is definitely one of the best and most direct ways to start a prosperous new year!

If you are new to investing and/or have no extra time to manage your money, be sure to check out StashAway to help manage your investments, hassle-free!

Essentially, StashAway is a smart wealth management platform that helps you manage your investments via algorithms in accordance with your risk appetite and economic condition – think of it as an (often cheaper) alternative to mutual funds.

Personally, I have been using StashAway to manage my passive investment portfolio and have no problem recommending it to people due to its reliability (regulated by Securities Commission) & lower fees than typical mutual funds.

In terms of returns, StashAway managed to give a return of around 10% for my combined aggressive portfolios in 2019 – a very respectable return by all means. Check out StashAway’s 2-year performance in the photo below.

Alternatively, there are other similar wealth management services like Wahed (Promo Code to get FREE RM40  bonus when you deposit a min. of RM100: YIXCHI1) and MyTheo (Promo Code to get 3 months FREE management fee: CHINYXWD49) of which I will be covering in the future.

If you are keen to try out StashAway, be sure to click HERE to get an exclusive 50% OFF your StashAway fees – AND no worries on how much you get for your angpau as you can get started with any amount at all!   

 

StashAway’s Performance compared to same-risk benchmark. (Source: StashAway)

 

 


 

#2 Spend on Books for even Bigger Return!

Nothing pays more dividends than acquiring new skills and knowledge.

If there is one thing that I can comfortably recommend anyone to spend on, books will top the list without a doubt.

Now, if you’ve been following me on social media, you’ll know that I am a huge book lover.

I enjoy reading books on personal growth, habits and money & investment – and here are 3 books that you should not miss in 2020:

 

(a) Mindset by Carol Dweck (Personal Development)

Mindset by Carol Dweck is a great book on personal growth that I am personally reading at the moment.

This book emphasizes the importance of having a growth mindset in personal life, sustainable leadership and long-lasting relationship – and the approach that you can apply to build this mindset.

Definitely check out this book if you are looking to make a significant breakthrough in 2020.

 

“True self-confidence is “the courage to be open—to welcome change and new ideas regardless of their source.” Real self-confidence is not reflected in a title, an expensive suit, a fancy car, or a series of acquisitions. It is reflected in your mindset: your readiness to grow.”

― Carol S. Dweck, Mindset: The New Psychology Of Success

 

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(b) Atomic Habits by James Clear (Habit-Building)

Atomic Habits by James Clear is hands down, the best book on habits that I’ve read in 2019.

Essentially, this book rips off myths on conventional habit-building methods and introduces us to simple & scientifically proven hacks to build a good habit that lasts.

If you have problem building habits that last, this is THE book to go for.

 

“You should be far more concerned with your current trajectory than with your current results.”

― James Clear, Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones

 

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(c) The Personal MBA by Josh Kaufman (Money, Personal Finance & Business)

The Personal MBA by Josh Kaufman will be my next read after I am done with Mindset.

The reason I am excited to read this book is that it covers a comprehensive aspect of personal finance and business – which I think would contain a whole lot of golden nuggets for me to discover.

Plus, you can now get this book at 41% OFF – which is really a great deal that I do not want you to miss out on.

 

“You can’t make positive discoveries that make your life better if you never try anything new.”

― Josh Kaufman, The Personal MBA: Master the Art of Business

 

 


 

#3 Optimize Your Financial Goals with a Professional Personal Financial Planner (BONUS: Free Consultation Session using my link below)

If you are looking to have a prosperous new year in 2020, you will definitely need a solid money plan on how to grow your wealth (like seriously).

This is even more important especially if you have a goal in mind that would need a big sum of money to accomplish in this new decade:

Planning to get married? Buying your first house or car? Looking to retire soon?

How about the plan for a trip to Japan, or the idea of changing your 3-year old smartphone this year?

If you have all these big (and small) financial goals in mind, and are still clueless about how to achieve them, engaging a Personal Financial Planner is the way to go.

Personally, I have worked alongside my very first Personal Financial Planner to get my 2020 financials planned with effective action steps – and I’ve learned so much about my finances.

Now, I DO NOT want you to pay for a Personal Financial Planner if you do not find value in their services.

For that, I am throwing in a FREE financial consultation session for you to find out for yourself (Click HERE to register) – I promise that it will be a time well-spent with great insights!

 

Working alongside my personal financial planner

 


 

Verdict: The Best Return of Investment in Money Spent is When Your Grow Alongside Them.

One of my biggest satisfaction when it comes to money spent is to feel or know that I’ve learned something from the transaction.

As of the case for angpau money, it is even more meaningful to use them in ways that could elevate your wealth and/or growth to kickstart the year.

For me, that’s the best return ever.

Take care and have a great festive season! 🙂

Yi Xuan

 


Disclaimers:

(1) This post may contain affiliate links, which afford No Money Lah a commission if you make a purchase.

(2) Any investment related sharing in this article is purely my personal opinion and should not be taken as a buy/sell call. Please seek financial advice from a professional financial planner for this matter. 

 


3 MUST-BUILD Mindsets to become a Better Investor & Person in 2020

Hey everyone!

First of all, I would like to take this opportunity to wish all of you Happy New Year! 2019 has been challenging yet really amazing for me. What’s more, the year was even better as I get to know everyone of you – your support and feedbacks have been tremendously motivating to me.

As I gather my takeaways as a developing trader, investor and, well, a person, I would like to share with you 3 MOST IMPORTANT mindsets that you must work on or cultivate in 2020.

From my personal experience and studies, these 3 mindsets are crucial for a person to develop and master in order to achieve any kind of significant breakthrough in his or her life & investing endeavors.

Now, it must be mentioned beforehand that building these mindsets would not promise immediate monetary returns. However, I am confident that having them will make your 2020 an extremely empowering year to live in.


#1 Mindset: Focus on Process over Outcome

A mistake that many beginning investors do is to anchor their investing performance to the return of their investments.

This mindset is what I call the ‘Outcome-based Mindset’, and it is THE BIGGEST mindset hurdle that an investor must overcome to stand a chance in the market.

Reason being, there is no 100% certainty that the market is going to give us what we want. When that happens, the confidence of a beginner investor will get shaken to the extent they may eventually develop a pessimistic view towards investing.

Hence, in 2020, focus on getting the process right. Aim to build a ‘Process-based Mindset’.

Focus on the process of learning. Focus on the process of executing your investing plan properly. Focus on the process of growing.

Amateur investors aim for the outcome, the successful ones focus on the process.

Focus on getting the process right in 2020 and the outcome will come.

#2 Mindset: Consistency is the Key

Now, when I mention consistency, I am not talking about the %/year that you can make consistently.

Rather, I am referring to one’s consistency in the execution of his or her processes.

You cannot control the market movement (external factor), but you can certainly take charge of how consistent you are in your process and effort (internal factor).

Be consistent in your routine to study financial reports & charts. Be consistent in your process to filter for quality investments. Be consistent in your risk management.

Ultimately, be consistent in your pursuit of mastery.

As cliché as it sounds, the consistency of ‘outcome’ that amateur investors dream of – they come from the consistency of ‘process’ that successful investors practice to heart.

Consistency in execution leads to consistency in outcome over the long run.

#3 Mindset: Relate to Challenges with Positivity

As the year goes by, it is for sure that there’ll be challenges in your life and investing journey.

In times like this, people with a mediocre attitude will look for someone or something to blame for their encounter.

On the other hand, people with a growth mindset will take charge of their life challenges and take it as an opportunity to improve.

Fear and challenges consume the people with a fixed mindset, but lift the people with a growth mindset.

Lady luck favors the positives.

Verdict

2020 is an exciting year. For the year and the decade ahead, things will evolve. The market will change. Some skillsets will become obsolete, and some will become high on demand.

However, a healthy mindset is timeless. No era of time will ever make a growth mindset irrelevant.

With that, I wish you the very best in your life and investing journey in 2020, and have a great, great year ahead! :) 

-Yi Xuan


Get Your 2020 Financial Goals Mapped-Out Strategically with Practical Action Steps!

Stepping into the new year (and decade) and still have ABSOLUTELY no clue about how you can achieve your ideal financial lifestyle & goals?

Or rather, you have some idea about your financials but are still 'kind-of' miserable about HOW TO REALLY ACHIEVE YOUR FINANCIAL GOALS?

Personally, I had a fair share of these experiences in 2019, until I finally consulted my first ever Personal Financial Planner to get my 2020 financials properly planned - and it is the BEST thing that I've done for myself in preparation for the new year and decade!

Hey wait - I DON'T WANT YOU TO PAY for your Personal Financial Planner if you are not convinced that they are not able to add value to your financials.

Hence, as a No Money Lah's supporter & reader, I am throwing in a FREE Financial Consultation just for YOU!

Find out HOW and CHECK OUT my personal experience working alongside my first personal financial planner BELOW!


Would we ever be ready in the pursuit of life?

It has almost been 2 years since I left my first job in a startup which paid me handsomely as a fresh-grad to explore my own path in trading and writing.

To be honest, it is one of the scariest decisions I’ve made in my life so far.

I knew nothing about trading at all when I first started.

I had no clue on how I could build a website at all, other than my neglectable experience with free website builders back in university times.

So, I did whatever I could – take a deep breath, leap, make tones of (noob) mistakes, and keep learning.




Fast Forward to Present Day

2019 has been a challenging year – and an amazing one as well.

This year, I had the opportunity to embark on many great adventures.

For one, after months of effort and painstaking mistakes, I finally made some significant breakthroughs in the skills & mindset in my trading journey (read: strategy with edge, disciplined routine & risk management, strong desire to succeed).

As someone with the goal to pursue a professional career in proprietary trading firms, this massively boosted my confidence to keep going.

Not only that, No Money Lah also opened me up to various great experiences.

First radio station interview? Done. First podcast interview? Done. First REIT investing knowledge-sharing workshop (and another 2 more after that)? Done.

Even better, I got to know and meet many like-minded readers and equally, if not even more enthusiastic folks of the personal finance & investing scene.

The best of all?

I learned a ton and enjoyed most moments in this adventure.


Gathering with other personal finance folks in 2019, courtesy of the StashAway team.




Outcast of the Norms

Whatever I am doing, I guess that made me an outcast of the societal norms with ever reliance on certainties.

I have a clear goal, but I can’t be 100% certain where exactly I will be by the end of 2020.

For sure, I can’t be 100% certain that I will have a fixed amount of income by the end of every month (Do you really think that No money lah is just my website’s name?).

When it comes to trading, it is even more obvious that I can’t be 100% certain of the outcome of my trade results every month.

In short, the only thing that is certain in this journey is risks and uncertainties.


REIT Investing Workshop – September 2019 Intake Group Photo




Lessons Learned in 2019

With that in mind, I have to take aggressive actions and mindsets to keep me going on this journey.

It is easy for one to slack off when you have no one to be accountable to. Hence, to progress in my journey, I have to:


  1. Follow a very disciplined routine to optimize my productivity (more contents about routine in 2020).
  2. Create a systematic workflow around my trading and content creation work.
  3. Be mindful of my personal expenses & financial decisions.
  4. Develop a very strong purpose and desire to succeed to keep myself motivated, and whenever needed, pull myself out of challenging times.

Most importantly, I have to embrace the fact that uncertainties are the only certainty in my journey, and make this to my advantage.


The Future Belong in Those Who Believe in the Beauty of Their Dreams.




What are your goals in life?

To be more specific, what is the ideal life that you visualize yourself in whenever you close your eyes?

For me, I want to give my parents a retirement life where they do not have to worry about money at all. I also want to have flexibility in time where I can explore the world of experiences.

Even more so, I want to be in peace and happy in my very own way of living.




Are we ever truly ready in this pursuit of ‘life’?

Why do I ask and share with you this, you might guess?

The reason is simple.

This is because I’ve seen and talked to people that want to wait for the ‘moment’ when they are ready to take the necessary actions to pursue their goals or ideal life.

But would we ever be ready for life?

If there is one key takeaway that I got in my nearly-2 years’ journey pursuing my goals, I am almost certain that most people are never truly ready for the adventure.

The fact is, you will always find hundreds, if not thousands of excuses on why you are not ready to start.

For me, it was the fear of not being enough. Not enough of a writer, not enough in knowledge, not enough in relevant experiences.

NOT GOOD ENOUGH.

Truth is, you only need one of these reasons to make you feel overwhelmed to start. But since we are creatures with imagination, we flood ourselves with even more reasons for why we will not succeed.




You Don’t Have to Know Everything, and You Only Need One Reason to Start

Give this a thought:

Our parents never really asked if we are ready for school – we just adapt and learn along the way.

Our university never really asked if we are ready for that damn tough paper – we (most of us) just grit our teeth and went through it anyway.

Isn’t it obvious that for the most part of our lives, we have never really been fully prepared for anything at all?

Yet, we still make it through and conquered life like a pro – until now.

Now’s the time to decide if you really want to be ‘truly ready’ or ‘fully prepared’ to pursue that goal or ideal life in this new decade.

You will find strong mental resistance and excuses as it would be deeply uncomfortable.

But you only need one, and only one strong ‘WHY’ to go take the leap.

I wish you the very, very best – and I would love to hear your journey someday. 😊



2019 has been a great year, and it would not be possible without my supportive parents, 2 of my lifelong friends (Victor & Eddie), and of course – you.

Thank you for being such a great supporter and motivation to me – be it if you are a reader and/or attendee of my REIT Investing Workshop in 2019.

This journey is much more meaningful and fulfilling with all of you, and please accept my gratitude from the bottom of my heart.

Wishing you a great year, and the decade ahead!

Yi Xuan

 


Working with Personal Financial Planner

I've Been Working Alongside a Personal Financial Planner - Here's My Experience with Them.

Back in October, I had the opportunity to work with my very own Personal Financial Planner to get my financials planned for the new year of 2020 – and I would like to share my experience with you today.

Now, it should be noted that I do have the habit of keeping track of my daily expenses. Plus, I do monthly reviews on my overall financial status and investments.

This means that I actually have a decent understanding of my personal financial state. That being said, why did I opt to work with a Personal Financial Planner?

The reason is simple: because I have a personal financial goal in mind, and I would like to seek professional opinion on how I can achieve my goal.

Read also: How my finances improved with the help of my financial planner in 2020!


What is a Personal Financial Planner, really?

The best way to explain what a Personal Financial Planner is to compare one to an insurance agent.

Essentially, a Personal Financial Planner covers a wider aspect of personal finance aside from insurance. In addition, financial planners are usually brokers to multiple insurance companies which means that they are able to compare and filter for the best solution (from more than one insurance company) for their clients.

A crucial difference, though, is that Financial Planners earn mainly through charging their clients a consultation fee, while insurance agents earn mainly through the commission of the insurance solutions sold

Added together, working with a Personal Financial Planner ensures minimal conflict of interest in their services as they are only accountable to their clients and no one else.  

That said, there is no one-size-fits-all solution when it comes to financial planning. One should go for the best-suited services by considering what’s best for him/her under their personal circumstances.

The difference between a Financial Planner & Insurance Agent.

What is it like to Work with a Personal Financial Planner? (My Experience)

Generally, a financial planning package (or service) is separated into 3 modes, namely:

  • Comprehensive Financial Health Check (FHC) [RM300]: You’ll go through a comprehensive fact-finding process with your financial planner. Then, you'll be presented with an analysis and report of your overall financial state with recommendations for improvement.
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  • 1-year Modular Financial Planning (MFP) [RM 1,500]: You’ll get everything from the Comprehensive Financial Health Check above. PLUS, you can choose to focus on EITHER Investment/Insurance/Estate Planning and your financial planner will support you in the implementation for 1 full year.
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  • 1-year full financial planning (FFP) [RM 3,000]: You’ll get everything from the Comprehensive Financial Health Check. PLUS, your financial planner will support you in the implementation of ALL aspects of your personal finances (Investment + Insurance + Estate Planning) for 1 full year.

Now, it is also important to note that both packages of financial planning also include an in-depth analysis of one’s cash flow status and financial health check. This is extremely crucial in helping us to understand our current financial strength for future planning.

Personally, I opted for a modular financial planning package from Wealth Vantage Advisory (WVA), specifically in investment as I want to explore how I can best optimize my cash on hand to achieve my financial goal.

A glimpse of my current financial strength, courtesy of WVA's trademarked Wealth Vantage Score.

The Flow of Working of a Personal Financial Planner (Step-by-Step)

Personally, I find working with my Personal Financial Planners from Wealth Vantage Advisory (Stev & Catherine) really simple and straightforward (to be honest, I thought it was going to be a complicated process initially).

Step 1: First Engagement

It all starts with an initial meetup in October in Stev’s office after signing up for my financial planning package.

The objective of this meetup is to do some fact-finding, expectation, and goal-setting. Along with the meeting, I also sent in my personal financial details required to my Personal Financial Planner.

Now, it should be noted that not everyone is equally comfortable sharing their personal financial details, even with a professionally trained Personal Financial Planner. I, for one, resonate with this very much as I felt vulnerable when I was asked to do so.

However, Stev and Catherine’s professionalism towards their work eventually made me really feel safe for doing so. Furthermore, the existence of legal paperwork in this financial planning process also ensures the privacy of our personal data.

Behind the Scene…

So, what happened after I submitted the details required by my Personal Financial Planner?

In WVA, they have a team of certified & professionally-trained financial planners to analyze my financials and put up detailed action-steps to help me achieve my goals.

Knowing this gives me peace of mind knowing that not just one, but a team of experts is working behind the scene to produce a solid financial plan that’s in my best interest.

Working with a Personal Financial Planner helped me to realign and be accountable for my financial goals.

Step 2: Implementation Meeting (1 month after first engagement)

About one month after our first meeting (October), I met up with Stev again for our first implementation meeting in November.

By now, my financial plan is prepared and Stev essentially, in detail, went through my (1) current financial health and (2) investments’ strengths and weaknesses with me.

The meeting was really an eye-opener as I have never been exposed to such detailed financial data of myself.

Essentially, I was given an aerial view of my current financial status including the health of my cash flow, net worth, asset allocation, and more. With that, my financial plan also includes precise action steps in order for me to achieve my financial goals (more in ‘My Takeaways’ section).

What I really like about WVA’s Personal Financial Planning session is that although I opted for a modular financial planning package in investment, Stev and the team also helped me analyze my insurance plans.

With that, they also provided me with suggestions on how to optimize my insurance expenses by comparing my current package with the other solutions in the market  – a nice touch indeed.

Behind the Scene…

Having a Personal Financial Planner is not just about giving you a plan and say bye-bye to each other.

In fact, the good thing about having a Personal Financial Planner is to assist and keep you accountable for the execution of your plan.

I find this very useful as it provided me with a push to get certain things that I’ve always wanted to do done after the meeting.

Detailed analysis of my personal financial status and precise action steps for me to achieve my financial goals are prepared.

Step 3: Follow-Up Review Meetings

Review Meetings are done to keep track of the execution of one’s financial plan. Not only that, it is set up to see if there is any further implementation needed to achieve one’s financial goals. 

For someone that is opting for a modular financial planning package like myself, Review Meetings are done on a half-yearly basis (twice in a year). For people that opt for a full financial planning package, Review Meetings are done once every quarter (4 times a year).

For sure, this is a great structure as you get all the accountability and support in getting your plans executed properly.

The full flow/timeline while working with a Personal Financial Planner, schedule courtesy of Stev from WVA. (click to enlarge)

My Takeaways

An important takeaway for me in my financial planning session with Wealth Vantage Advisory comes in the form of my asset allocation. While I have been conscious of my financial status, I did not realize that I am not optimizing my assets to their full potential.

Namely, I have a relative sum of emergency cash reserves that could be put into Fixed Deposit (FD) alternative like Money Market Fund. Doing this will give me better returns on my cash reserves while still ensuring the liquidity of my cash (unlike FD).

In addition, I also like that the proposed action steps are precise and straightforward. In my case, the plan proposed a fixed % of cash allocated to the Money Market Fund. This is a sweet touch considering most people (okay, maybe it’s just me) are just too lazy to make decisions nowadays.

Not only that, going through a financial planning session also pushed me to rethink my approach towards my income stream. As in, how can I improve my active income flow while pursuing my goal to become a professional full-time trader?

This made me realized that sometimes all people need is a push and accountability to really do what it’s needed to achieve their financial goals – and engaging a Personal Financial Planner is no doubt a great way to do so.


Do You Really Need a Personal Financial Planner?

Now, I personally think that most people need a Personal Financial Planner more than they think.

Even for me that practice the habit of keeping my financials in check, I still found enormous value while engaging a Personal Financial Planner. The question is, do you need one?

If you are a young adult planning ahead for your wedding, family planning, and any other financial goals – go for it.

If you are a parent planning for your children’s future education and life – go for it.

If you are in your 30s, 40s or even 50s looking to retire earlier and/or manage your after-life asset allocation but not sure what to do – go for it.

Even more so, if you have a lot of savings in hand but have little to no clue on how to deal with them – GO FOR IT.

Getting a Personal Financial Planner will give you a clearer picture of your financial strengths and weaknesses – and support your journey towards achieving your financial goals.


Get Your First Financial Consultation Session Today – FREE OF CHARGE!

Before we continue, I think it is helpful for you to know that a 1-year Full Financial Planning package from WVA is priced at RM3,000. Meanwhile, the 1-year Modular Financial Planning package (Investment/Insurance/Estate Planning) is priced at RM1,000.

To be clear, I DO NOT want you to pay for a Personal Financial Planner unless you are convinced that they are able to add value to you.

That said, I also want you to give yourself the chance (like what I did) to make the best use out of your hard-earned money and achieve your financial goals in life.

Hence, I am working together with Wealth Vantage Advisory to bring a FREE session of Financial Consultation Session to all No Money Lah’s readers!

When you sign up for this FREE consultation session, you will learn more about your overall financial state. Not only that, you can gauge if a Financial Planner is going to add value in the pursuit of your financial goals – regardless, you are doing yourself a favor for the year to come!


Disclaimer

This article is made possible through a collaboration with Wealth Vantage Advisory. Special thanks to Stev and the team for making this collaboration such an impactful one.

Wealth Vantage Advisory did not receive copy approval rights on this article – that means they are reading this article for the first time, right alongside you. 🙂

p.s. This post contains affiliate links, which afford No Money Lah a small referral if you sign up for any paid services.


Are the Newly Listed Leveraged & Inverse ETFs for You?

TradePlus by Affin Hwang Asset Management has recently listed their highly anticipated Leveraged & Inverse ETF (FANG+ 2x Leveraged, FANG+ Inverse, HSCEI 2x Leveraged, HSCEI Inverse) on Bursa – the first in Malaysia.

Essentially, this means that local traders now have the opportunity to be exposed to the foreign market (US Tech sector & Hong Kong’s listed Chinese companies) via local platform. In addition, local traders also have more versatility when it comes to trading the market – with the advantage of leveraging and the ability to profit with inverse ETF when the market goes south.

That said, are these ETF products for you? Let’s find out:

First of all, what is an ETF?

Exchange-Traded Fund, or ETF, is a fund that tracks a collective of specific securities that is traded on stock exchanges.

Simply put, instead of a single stock, look at ETF as a basket of stocks that are being sold in the stock market – tracking the collective performance of stocks within the basket.

A great illustration of ETF, credit to Investors.com

So…What are the newly listed Leveraged and Inverse ETFs?

For a typical ETF or stock investment, you earn 1% when the investment moves up by 1%.

Technical details (boring stuffs) aside, the newly listed FANG+ and HSCEI 2x Leveraged ETF allows one to double his or her return when the trade moves in one’s favor. Generally, it means that when the ETF moves up by 1%, your return would be 2%, which is twice (2x) the price movement.

On the other hand, the newly listed FANG+ and HSCEI Inverse ETF would allow a trader to profit when the price of the ETF goes down instead. Simply put, think of it as you are buying an Inverse ETF with the outlook that the price of the ETF is going to drop.

An illustration of Leveraged & Inverse ETF, courtesy of Equities Tracker and TradePlus

What are the stocks that the FANG+ and HSCEI ETFs track?

FANG+ 2x Leveraged & Inverse ETF tracks a basket of 10 US highly-renowned tech stocks, which is great if you have a specific trade idea on the US tech sector and is wondering how to trade the sector. (Interesting fact: FANG+ stands for Facebook, Amazon, Netflix, Google & Others)

An illustration of Leveraged & Inverse ETF, courtesy of Equities Tracker and TradePlus

On the other hand, HSCEI 2x Leveraged & Inverse ETF tracks a basket of the 50 largest Chinese companies that are listed in the Hong Kong’s stock exchange. Some of the notable companies include Tencent (tahu Wechat?) and Ping An insurance.

HSCEI ETFs are a great choice for traders with trade ideas towards Chinese companies.

An illustration of Leveraged & Inverse ETF, courtesy of Equities Tracker and TradePlus

Related Fees

Just like investing in a stock market via your broker, you’ll be charged your normal brokerage fee when buying the FANG+ and HSCEI 2x Leveraged & Inverse ETF.

Also, certain annual charges will be imposed too, kind of like mutual funds.

More details HERE

Is it For You? (and the Risks Involved)

Now, it is super clear that these ETF products are very niche and is NOT for everyone. Even in the product page itself, it has been stated specifically that Leveraged and Inverse ETFs are more suited to be traded short term instead of long term investing.

In particular, 2x Leveraged ETFs, while could deliver 2x the return, could also deliver a loss that is twice as much to traders when a trade goes wrong – hence should be carefully approached.

That said, this product is superb specifically for experienced traders with large capital. As such, these are traders that would like to profit from their short-term view of the US tech sector or from the thriving HK-listed Chinese companies via leveraged and inverse products.

That aside, Leveraged & Inverse ETFs are NOT for people who:

  1. Have little to no experience in trading.
  2. Do not understand the risk of leverage.
  3. Have small capital (because your brokerage fees alone could screw you up)

How to Trade?

For traders that are interested to trade these newly listed ETF products, you can do so today via your Malaysian stockbrokers - just search for the respective ETF names/stock code and you will be able to start trading them!

FANG+ 2x Leveraged (E830EA), FANG+ Inverse (E831EA), HSCEI 2x Leveraged (E832EA), HSCEI Inverse (E833EA)


No Money Lah’s Verdict

In short, it is very interesting that we are starting to see more interesting investment alternatives that are coming up in the local scene. While clearly not designed for most everyday investors, TradePlus’ Leveraged & Inverse ETF products are definitely there to fulfill the niche for certain traders in the market that are looking to profit from their view of the foreign market.

For the general everyday investors though, my recommendation to check out the normal (and equally exciting) locally listed ETFs or stocks like REITs to invest for the longer term.

Side note: For the niche group of traders who are interested in the Leveraged & Inverse ETFs, I will be trading them for a bit – and will write about my experience real soon – so stay tuned!


Real Estate Investment Trusts (REITs) is one of my favorites to invest in the stock market, as they provide relatively stable dividends – hence making them a great passive income source.


Disclaimer: This article is written based on my best research as of the time of writing, and should not be considered as a buy/sell recommendation. Please do your own due diligence and/or seek professional advice when making your investment decision.