5 Things that I Look for When Investing in REITs!

In my previous article, I shared about how and where I invest my money. When it comes to active investing, my niche and strength mainly in researching and identifying opportunities in the Real Estate Investment Trusts (REITs) sector in the stock market.

REITs are great options for investors looking to build a consistent dividend income portfolio, while also having exposure to the commercial real estate sector. 

In this article, I would like to share 5 fundamental aspects that I consider when I invest in REITs.

These 5 aspects are also discussed in detail in my live REIT Income Investing Coaching Sessions, so if you are interested to build a consistent dividend income portfolio via REITs, be sure to click HERE and check it out!

Without further ado, let’s start!


#1 Is the REIT’s business nature suitable to grow in this current environment?

Not all REITs are born the same.

As an example, IGB REIT is REIT that runs a retail business that runs the operation of Mid Valley and The Gardens. On the other hand, Al-Aqar REIT is in the healthcare business where they own and/or operate hospitals and healthcare centers like KPJ Hospitals.

In other words, while both companies are categorized as REITs, the opportunities and risks involved with both IGB REIT and Al-Aqar REIT are fundamentally different.

Hence, it is important for us to recognize the business nature of a REIT and identify whether the REIT is suited for growth current (and future) market & business environment.

Related: Pros and Cons of different REITs HERE


#2 Healthy Balance Sheet

For REITs, a healthy balance sheet is extremely crucial in the operation of the business.

In essence, the health of a balance sheet refers to how well a REIT is in managing its liabilities (mostly debt) in relative to its asset (ie. Cash).

One very good measure of a healthy balance sheet is via Gearing Ratio. Gearing Ratio measures the company’s borrowings relative to the value of its assets.

This also means that Gearing Ratio is able to tell us whether a REIT is overborrowing. Generally, a REIT is required to maintain a gearing of 50% or less.

But personally, I like to be more stringent with my selection and will only go with REITs with gearing of 40% or less.

How to look for Gearing Ratio?

Method: On quarterly/annual report > Ctrl + F "Gearing" 

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IGB REIT's has a Gearing of 26% and 27% respectively for Financial Year 2019 and 2018. (Source: IGB REIT FY2019 Annual Report)

#3 Income Growth

As an investor, of course I am always be looking to invest in a business that keeps growing.

This translates to past consistent growth in revenue & profit of a company. In REITs, this is no different.

As a real estate business that earns mainly on rental income, it is crucial that under normal circumstances, the income of the business keeps growing consistently.

A consistent growth in income will, for most of the time, ensure growth in dividend payout to investors.

How to look for the details of a REIT's income?

Method: Via the income statement in quarterly/annual report, or via apps like KLSE Screener

Axis REIT's Revenue & Profit growth over the years. (Source: KLSE Screener)

#4 Occupancy

As a real estate business that depends on rental income, the lifeline of REITs is highly dependent on the occupancy rate of their properties.

As an example, IGB REIT’s income will be highly dependent on how well occupied the rental is in Mid Valley and The Gardens.

I will go more in-depth on this topic in future articles, but in general, there are 2 rental models of REITs:

The first rental model is around a short, normally yearly rental contract, where REITs’ management will have to renegotiate new contract terms on a yearly basis. This is usually seen among Retail REITs like IGB REIT and multi-tenant office building on Office REITs.

The second model is a longer, multi-year rental contract (or lease), where REITs’ management secure longer-term contracts (usually 3-5 years and even longer) with tenants. This is usually seen in Industrial REITs that run factories & warehouses, Hospitality REITs that manages hotels and Healthcare REITs that run hospitals.

How to look for a REIT's Occupancy Details?

Method: On the annual report, Ctrl + F "Occupancy"

Occupancy rate of both Mid Valley & The Gardens was at 99% respectively. (Source: IGB REIT FY2019 Annual Report)

#5 Potential Acquisition

While investing in REITs, an important indicator to gauge potential income growth of a REIT is through potential acquisitions.

As a real estate business, the major way for a REIT to improve income is to acquire quality properties under its portfolio.

This will ensure longer-term rental income growth and translates to better dividend payout for investors.

How to look for a REIT's Acquisition Details?

Method: Now, this will be a little tricky but generally, under Quarterly/Annual Report, you can Ctrl + F "Acquisition". Otherwise, I recommend reading through the Quarterly Report and you'll easily spot any acquisitions under the pipeline.

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Atrium REIT proposed new acquisitions (Source: Atrium REIT 4Q FY2019 Quarterly Report)

No Money Lah’s Verdict

So here you go! These are 5 fundamental aspects that I look into when I invest in REITs.

For sure, there are several other little details that will help in my decision-making process, but these 5 aspects generally make up my initial impression of a company.

Are you investing in REITs as well? What other aspects do you look into a REIT before making your investment decision? Share with me at the comment section below!

Else, if you have any questions or things that you would like me to cover on REITs or investing in general, do let me know at the comment section too! :)


p.s. Keen to Learn More About How You Can Build a Reliable Dividend Income from REITs? Click HERE to Find Out More!


How I Invest My Money as a Self-Employed Person (Detailed Breakdown!)

Where do I invest my money?

In this article, I want to talk a little bit about the breakdown of my (boring) investment portfolio. I’ll also shed some info on the asset classes involved and what I want to improve or refine further. 

By the end, I’ll share some of my core investing mindsets (or principles, whatever you wanna call them) that I follow closely in my decision-making process.

Have a good read!

Now, a few caveats…

1. The market is dynamic (so is life). Our financial priorities change as we grow older. Hence, I am pretty sure how I invest today will evolve along with time and my priorities in life. 

2. The focus of this discussion will be on my long-term investment portfolio. This means that invested assets will be focused 100% on achieving my financial goal (Financial Independence, or FI). 

They will not be cashed out for other purposes other than portfolio rebalancing. 

3. Money allocated for savings and emergencies will NOT be included in this discussion. This is because there is a high chance that these monies will be used for purposes other than to achieve my financial goals. 

Read my articles on savings and emergency funds HERE and HERE

4. Money allocated for short-term trading will not be included in this discussion. The nature & purpose between trading and investing are extremely different and there is no reason for me to add them to this discussion.

With that in mind, please approach this post with a pinch of salt. Your investment approach and style should be aligned with your own priorities in life, risk profile, and more. 

Do consult a licensed financial planner if you are serious about building your own investment portfolio. I am also working with my personal financial planner and have written about my experience HERE


No Money Lah’s Investment Portfolio + Breakdown Discussion – June 2020

#1 Cash in Hand for Investment Purposes

There are a few reasons why 40% of my portfolio is in the form of cash.

Reason #1: Risk of income fluctuation as a self-employed. 

There are certain months where my income may be less than my intended average figure. 

Hence, at this point in time (June), I have a 3-months cash buffer allocated for my monthly investment routine as you’ll read in this article.

Reason #2: Cash reserved for different opportunities.

We never know what’ll happen in the market tomorrow. 

Especially in this current market condition, I have extra cash reserved to take advantage of any opportunities that may come knocking on the doorstep. 


#2 Stock Market (REITs) – Active Income Investing

How I Invest: Every month, barring nothing special happens, I will pump a specific sum of money into my selected REITs.

When it comes to the stock market, I focus particularly on Real Estate Investment Trusts (REITs)

This is the part of my investing routine where I am involved actively to research and study what to invest.

The reasons why I focus on REITs are because REITs’ volatility is generally milder relative to other sectors in the market, and I like the idea of consistent dividend payout from REITs (something like collecting rent as a landlord). 

Simply put, REITs are my niche and it is a sector that I can utilize my thought process & analysis skills with high competence to generate alpha (edge).

What I’d like to refine further: Starting to expose myself more to foreign REITs (ie. Singapore, HK & US REITs) for the 2nd half of 2020.

Note: Click photo to access this article.

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p.s. I am often asked if I feel ‘sayang’ for missing out on all the hot headline stocks. To be honest, I don’t.

For one, I do not have time to study these companies for long-term investment. Secondly, the moment you see a stock appear on the headline, you are probably way too late to join the game.

I focus on my niche and strength, and will not touch something that I am not familiar with. 


#3 Robo-Advisors (StashAway + Wahed) – Automated Passive Investing

How I Invest: Monthly automated debit order.

Yes, I am aware of the risk of overconcentration by just investing in REITs. 

Hence, I am also passively invested in robo-advisors like StashAway and Wahed to diversify my portfolio into ETFs of various industries and other asset classes (ie. Bond, Commodities, Sukuk). 

In terms of risk profile, I am mainly focusing on medium-risk portfolios from both platforms (StashAway: 14% Risk Index, Wahed: Medium Risk Profile).

The beauty of robo-advisors is that I can invest passively at a reasonably lower cost than conventional unit trusts. 

What I’d like to refine further: Nothing.

p.s. Use my: StashAway Referral Code and get 50% off your management fees for 6 months, as well as Wahed Referral Code (Code: YIXCHI1) and get RM10 bonus fund!

Note: Click photo to access this article. 

#4 PRS – Passive Investing

Just to take advantage of tax and government’s previous incentive.

Note: Click photo to access article

#5 Gold – Monthly manual debit order

How I Invest: Manual debit via HelloGold’s Smart Savers program

Personally, I think of Gold as a wealth preservation asset and a correlation hedge against overall market volatility. 

The reason why I choose to stick with HelloGold is that it allows me to be extremely flexible with the purchase amount, whereas other platforms have a minimum purchase of 1g. 

What I’d like to refine further: Increase monthly allocation in Gold, and start to have exposure in Silver in line with the increment of my income in the near future.

Note: Click photo to access article

#6 EPF – Passive Investing

How I Invest: Monthly manual debit order

EPF is an interesting matter to me as a self-employed. This is because unlike normal employment where there is a standard to how much you and your employer will contribute to your EPF, I have to manage my own EPF account.

This is done by opening my own EPF i-Saraan account and manage my own EPF contribution.

What I’d like to refine further: Increase monthly allocation in line with the increment of my income in the near future.


#7 Bitcoin – Not adding any positions 

Presently, most of my bitcoin positions are my unsold positions during my purchase in mid-2017.

They are relatively small as I was lucky enough to sell off the majority of my position nearly at the height of bitcoin’s $20,000 peak by the end of 2017.

That said, I am also eyeing to start increasing my holding on digital currencies moving forward. Just gotta dive in and do some research first.

What I’d like to refine further: Do deeper research into digital currencies.


#8 ASNB – No Luck

Seriously, if you can get your hands on Amanah Saham Fixed Price Funds, get it. 

The consistency of return and the nature of ASNB unit price (fixed at RM1.00/unit) makes it a no-brainer if you are looking to invest passively.

Unfortunately, I never really got much luck to get many units since I’ve written my piece on Amanah Saham last year *sigh*

Note: Click photo to access article.

Context: My Situation

I am 26 this year. As a self-employed, I run this blog and actively organize live REIT Income Investing coaching sessions – both of which I have a lot of fun doing.

In my downtime prior to Covid-19, I am also an International Table Tennis Federation (ITTF) certified table tennis coach (though that stream of income is no more today).

More importantly, I am also passionately working behind the scene to become a full-time funded trader (*fingers crossed*). This part of my life requires a dedicated post, but suffice to say it is a very challenging, yet exciting journey.

I am single and currently living with my family (it’s a blessing). Hence, I am able to reduce my living expenses significantly which enables me to pursue my goals wholeheartedly, while maintaining a respectable savings ratio.

All in all, my situation is likely going to be very different from many people, as I do not have a fixed monthly income. 

Financially, my situation requires me to be extremely disciplined with money. It also pushed me to think 2 to 3 steps ahead in terms of my income streams, which is why you’ll see things like cash buffer in place for my monthly investment routines.


My Investing Mindset + Approaches

1. Create a disciplined financial and investing routine. For me, I review my financials and investments every month-end, so I am always aware of my financial state. 

2. Take time to discover your investment style. Not everyone has the time & commitment to pick individual stocks. Not everyone can invest in volatile businesses. Everyone is different. 

For me, a hybrid routine of active REIT income investing coupled with low-cost passive investing makes the most sense to my personality, time, and commitment. 

3. Foundational skills like how to analyze a financial report is a MUST in active investing. I think there’s really no shortcut here. 

4. A stock investing plan without an exit strategy is NOT a plan. Market and businesses are too dynamic to buy and hold forever. 

5. 99% of headlines are mostly for entertainment purposes. Until you know what you are looking for, headlines and news can be extremely overwhelming. 

p.s. I don’t really care about the hottest stock in town. 

6. Leverage on technology. Low-cost passive investing platforms like StashAway and Wahed helped complement my investment routine so I am always diversified in other industries. 

7. Avoid investing with borrowed money. I avoid leveraged accounts and invest only with the money I have (ie. Cash Upfront account on Rakuten Trade).

8. Learn to make independent investment decisions. I use various resources to help me gather insights, but ultimately, I make my own investment decisions. 

Nothing helps me improve more than taking ownership of how I invest my own wealth. 

9. Focus on the process – keep learning and stay humble. Whenever I feel like I know everything, the market will prove me otherwise. A little humility goes a long way in the market. 

10. In the long run, successful financial goals and investing depend on one’s habits, mindset, and skillsets. And yes, it’ll take time. 


No Money Lah’s Verdict

Oh my, this is a long article! Thanks for reading till the end, and hopefully you find this post an insightful one!

Ultimately, it is crucial for us to acknowledge that investing is a very personal matter. How I invest will likely be very different from you, and there is really no right or wrong approach here.

Either way, personal finance and investing is a life-long journey. Our money and investment routine have to evolve as we step into different stages of life.

Hence, keep learning, stay humble.

p.s. Curious, where do you invest your money in? Feel free to share with me at the comment section below! 

Talk soon! :)


This is an article that I’ve always wanted to write about. In fact, I have several drafts for this topic, yet I never really landed on an approach to this article.

Big thanks to Mr-Stingy’s article on 'How I Invest My Own Money' (check it out!), which has helped me decide how I should approach this topic. You can also check out a similar topic from Ringgit Oh Ringgit HERE.


You Might be Interested: What'd I do If I Were to Start Investing All Over Again?


4 BETTER Ways to Save Money in a Low Interest Rate Environment! (detailed comparison)

Since the Covid-19 pandemic started earlier this year, central banks across the world have been lowering interest rate in hope to spur the economy with increased consumption & borrowings.

On the flip side, under a low interest rate environment, the yield of conventional financial vehicles like Fixed Deposit (FD) are affected negatively. 

In fact, Bank Negara Malaysia (BNM) has just announced the lowering of interest rate from 2% to 1.75% this month (July), which is never seen even during the Global Financial Crisis in 2008/09.

Simply put, savers suffer in this historically low interest rate environment.


The question is obvious:

Is there anywhere we can place or save our money in this low interest rate environment? 

Let’s find out together.

Malaysia's Interest Rate at Historical Low (source: Tradingeconomics)

Firstly, Our Goals & Criteria:

What I intend to achieve with this article is to share what I think are suitable alternatives to FD for most people to place their money.

The main goal here is to seek options that can allow most people to PRESERVE the value of their wealth. 

Hence, please approach this article from a wealth & value preservation mindset, NOT from an investment mindset.

Since we are talking about potential FD alternatives here, there are a few criteria that I consider while planning for this article:

  • #1 The majority exposure of these financial vehicles must be limited to low-risk asset classes.

  • #2 Ideally, we’ll want to have a low barrier of entry to these options. Meaning, we can start even with a small amount of capital.

  • #3 A flexible deposit & withdrawal feature would be a plus point.

  • #4 No troublesome tiering conditions where I must spend up to some amount or swipe my card X times a month to be eligible for the yield. (too mafan)

Now, a huge disclaimer (confirm people will mention): NONE of the options mentioned below are insured by PIDM and NONE of them have guaranteed yield or return. So if that’s your thing, this article is not for you.

With that in mind, let’s start!


1. Money Market Funds

Money Market Funds are mutual funds that typically invest in cash equivalent short-term debt instruments with short maturity (normally around 1 – 2 years, sometimes even shorter).

In other words, Money Market Funds place your money in instruments like government treasuries, corporate, and bank securities. Also, Money Market Funds' managers typically attempt to keep the price of the funds fixed (ie. RM1/unit), so only the yield will fluctuate.

In nature, Money Market Funds are considered lowest in risk within the fixed income asset classes as the short maturity (a.k.a. expiry) of the instruments invested lower the risk of default and reduce exposure to long-term risk in the market.

Generally, yields are paid out in the form of dividends either monthly or quarterly.

Personally, I have most of my money placed with BIMB Dana Al-Fakhim (via BIMB’s BEST Invest) and Phillip Capital Money Market Fund for non-investment related purposes. 

Average Past Return: Around 3 – 4%/annum

Pros: 

+ Higher return than FD;

+ Low barrier of entry (RM10 for BEST Invest);

+ No lock-in period (deposit & withdraw anytime).

Cons:

- Funds’ return can be impacted by low-interest rate, albeit they are still better than FD.

- Minimal amount of management & trustee fees will incur.


2. StashAway Simple 

StashAway Simple is a cash management service from robo-advisor StashAway. 

Essentially, StashAway Simple is also invested in Money Market Fund. However, I think it deserves its own place in this article due to its unique value proposition as shown below: 

Historical Return: Between 3.6 - 3.7%/annum (data taken from the historical performance of Eastspring Investments Islamic Income Fund*)

Projected Return: About 2.4%/annum (this is an estimated potential return and SHOULD NOT be compared to the historical returns of other funds)

Pros:

+ Lower fee structure compared to typical Money Market Funds (~0.165% vs ~0.5%/annum). There’s no management fee from StashAway though there’s a minor fee charged by the underlying fund manager.

+ Zero barrier of entry. You can literally start using StashAway Simple at any amount you want.

+ No lock-in period (deposit & withdraw anytime).

Cons:

- The cons listed under Money Market Funds.

*The underlying fund of StashAway Simple is Eastspring Investments Islamic Income Fund that invests in Islamic debt instruments offered by financial institutions. You can find out more about the fund HERE.

StashAway Simple is a financial product with a unique value proposition


3. Bond Funds

Bond Funds are mutual funds that mainly invest in bonds (okay haha what am I doing here). 

Essentially, when we invest in a bond fund, the money collected from investors will be pooled together to buy various bonds (ie. debts from governments and corporations) with different yields & maturities.  

Unlike Money Market Fund where the unit price is typically fixed, the value of Bond Fund units generally fluctuates inversely with interest rate.

In short, this means that the lower the interest rate, the higher the value of the bonds invested in a Bond Fund, which may lead to an increase in the value of the Bond Fund.

However, the opposite can also be true, where an increase in interest rate (which will definitely happen in the future) will lead to a drop in the value of bonds.

Return: Around 3-8%/annum, depending on the type of Bond Fund you invest in.

How to buy: Fund SuperMart (FSM)

Under FSM’s fund selector, select ‘Fixed Income’ under Assets Class. Then, if you want to filter your selections further, tick ‘Recommended Funds Only’ and click ‘Generate Funds Table’.

You’ll see a list of FSM’s recommended fixed income Bond and Sukuk Funds, and you can dive deeper into the particulars of the funds. 

Note: Let me know in the comment section below if you want me to write more about Bond Funds! 

 

Pros: 

+ Lower interest rate generally increases the value of bonds within a Bond Fund.

Cons:

- The opposite of pros can also be true.

- Higher min. investment of RM1,000 for most bond funds.

- Typical management & trustee fees apply.

p.s. In terms of risk, Money Market Funds are considered to be less risky compared to Bond Funds, but it also offers a lower yield in return.


4. Low to Medium Risk Portfolio on Robo-Advisors (eg. StashAway, Wahed, MyTheo)

If you are looking for something more diverse, putting your money in low to medium risk portfolio on Robo-Advisor platforms like StashAway, Wahed or MyTheo may be a good option.

Typically, in a low to medium risk portfolio, robo-advisor platforms will allocate the majority of the funds towards bonds and money market instruments, alongside a minimal allocation to equities and commodities.

In short, a low to medium risk robo-advisor portfolio will give you a good bond-focused allocation, with a dose of exposure to asset classes like equities and commodities.

Pros: 

+ Potentially higher returns due to exposure to the equity market.

+ Low barrier of entry

+ No lock-in period (deposit & withdraw anytime)

Cons:

- Potentially higher volatility and risk due to exposure to the equity market.


Robo-Advisor platforms having a healthy weightage of government, corporate bonds, and money market instruments in their low to medium risk portfolio.

p.s. Use my: StashAway Referral Code and get 50% off your management fees for 6 months, Wahed Referral Code (Code: YIXCHI1) and get RM10 bonus fund and MyTheo Referral Code and get 100% off your management fees for 3 months!


But hey, What About Amanah Saham Fixed Price Funds?

Now, some of you may have Amanah Saham Fixed Price Funds in mind, but there is ONE key reason why I’ll not include them in this discussion: 

Reason: High exposure to equities (risky asset class)

One of the criteria that I mentioned earlier in this article is that the options must have the majority of its exposure in low-risk assets.

As such, Amanah Saham Fixed Price Funds (ASB, ASB2, ASB3, ASM, ASM2, ASM3) do not fulfill the criteria as the majority of these funds are parked with equities

This simply means that the actual risk involved while putting our money in ASB is actually higher and hence in my opinion NOT a suitable choice for wealth preservation purposes.

Asset Allocation of ASB2 (Source: ASB2 Annual Report)

No Money Lah’s Verdict: Explore Your Options in this Low-Interest Rate Environment

With the low interest rate environment that we are living in right now, it is crucial for us to explore alternatives beyond FD to preserve the value of our hard-earned money.

Be it for emergency or savings, I think the options mentioned in this article will be suitable for most people to get started.

Have you start placing your money with any of the options mentioned above? Did I forget to mention any other options in this article?

Let me know in the comment section below – can’t wait to hear from you! 


Disclaimer: This article is produced for informational purposes only and SHOULD NOT be viewed as a buy/sell advice. Please seek financial professionals before making a financial decision.


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.



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. 

 


Malaysians' Guide to Gold Investment

Gold is an asset that has been universally recognized as a store of wealth since ancient times. Despite not being a legal tender form of exchange (read: currency) these days, gold is still widely accumulated by the society and countries alike.

In this article, let’s look at some interesting (and lesser-known) facts about gold, WHY invest in them, and HOW to invest in gold as a Malaysian.

What Makes Gold So Attractive?

(1) Gold is uniquely beautiful

Gold is stunning on its own. As such, gold’s shinny and elegant nature make it an attractive choice for jewelry and life accessories alike.  

(2) Gold is scarce

Gold is a type of commodity. This means it is a rare metal and the amount of gold available to mankind is limited.

Not only that, the mining process of gold is also painstaking and expensive, making gold an even more valuable asset to own.

(3) Gold is durable and useful

Gold does not decay or rust – and it is almost indestructible. All the gold ever mined is still around in one form or another.

In addition, gold is a good reflector of light and an excellent electric conductor. This contributes to the extensive usage of gold in electronics such as circuits, dental fillings and more.

(4) Gold is homogeneous

One pure gram of gold is similar in value to the next gram. This makes it easy for people to ascertain gold’s value and utilizing it in trade and commerce.

Having understood the characteristics of gold, it is useful for us to understand WHERE gold is being supplied and HOW gold is being used in the world.

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Characteristics that make gold such a special commodity.

Supply & Demand of Gold

Have you ever wonder how is gold being supplied all around the world?

According to the World Gold Council (WGC), around 75% of the world’s gold demand is contributed by gold mining. Unlike paper money which can be printed with relative ease, the only known way to produced gold is to mine them.

That said, gold that is mined is usually not enough to meet the demand for gold. Hence, the remaining 25% of gold demand is met by the recycling of gold. These recycled gold supplies come mainly from jewelry (~90%) and gold extracted from technological hardware.

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Gold supplies all around the world

If that’s the case, WHO is buying gold around the world?

There has been 4 main use of gold worldwide.

The first use of gold, which takes up around 50% of the total demand, comes from (you’ve guessed it)jewelry.

This is followed by investment-related purposes (eg. Gold-backed ETFs), which contribute to around 25% of total gold demand. In addition, gold is also accumulated by central banks all around the world. This takes up around 13% of total gold demand.

Lastly, gold usage for industrial production takes up the rest of the demand.

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Gold demand around the world

Which country holds the most gold?

Now, as mentioned, gold is highly accumulated by the central banks of many countries. Gold is being held as part of a nation’s reserves, mainly due to gold’s nature as a safe haven asset and an effective diversification of their portfolio.

The role of gold to central banks (Source: World Gold Council)

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With that in mind, let’s make a smart guess before you proceed – which are the countries that hold the most gold?

As of October 2019, the United States holds the most gold in its national reserves (8133.5 tonnes!) – which takes up near to 78% of the total reserves. The far second is Germany with a total gold reserve of 3366.8 tonnes, making up 72.9% of the country’s total reserves.

Countries like China and India have a gold reserve of 1942.4 tonnes and 618.2 tonnes respectively, making up less than 8% of these countries’ total reserves.

Back in Malaysia, we are placed at 53rd (out of 100 countries) when it comes to our total gold holdings. This translates to a total gold holding of 38.9 tonnes – which is 1.8% of Malaysia’s total reserves.

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Malaysia is ranked #53 in global gold reserves.

Why invest in gold?

(a) Hedge against the drop in interest rate & geopolitical uncertainties

With global powerhouses like the US reducing its interest rate, it is inevitable that there will be a drop in return (or yield) of major bonds in the market. This will cause the return of bonds less attractive in the eyes of investors.

Adding on to various geopolitical uncertainties, this makes gold especially appealing as a safe-haven asset for institutions and retail investors alike in search of protection against uncertainties.

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(b) Portfolio Diversification 

Gold is also an effective instrument for you to diversify your investment portfolio. This is because, for the past 10 years, gold has almost no correlation (0.04) with the stock market movement.

In short, this means that gold price is generally not affected by the ups and downs in the stock market, making it a good wealth diversification vehicle.

Useful link: S&P 500 vs Gold price movement for the past 10 years

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There are many solid reasons to have gold as part of your portfolio

How can Malaysians Invest in Gold?

#1 Recommended – HelloGold 

HelloGold is a mobile app that allows you to buy and sell gold for as little as RM1. This is really a big plus point, considering that the other offerings in the market have a barrier of entry of a minimum of 1 gram of gold (~RM200). Some of the advantages of HelloGold are:

  • Low barrier of entry - Invest in gold starting at just RM1!
  • No-hassle account opening - The easiest way to get started in gold investing. Open your account via HelloGold's mobile app - no need to be physically present at counters to do so. 
  • Shariah-Compliant
  • Automated investment - If needed, you can automate your monthly gold investment via HelloGold’s SmartSaver plan.
  • Flexibility in managing your gold holdings - With HelloGold, you can buy and sell gold via the app anytime, and even send gold to your family and friends via the app.

This flexibility is a huge thumbs up considering that I used to have to visit the Maybank counter myself to withdraw my gold investment as a Maybank Gold Investment Account holder.

In terms of security, every gold bought is yours and is held at HelloGold’s vault provider in Singapore (which, you can redeem them if needed), and is well-insured by insurance company.

With that in mind, unless you really need to hold solid gold, I definitely recommend HelloGold to most people that are keen to invest in gold. 

 

#2 Physical Gold

Should you fancy physical gold bars and coins, you can also get them via sites like BuySilverMalaysia. That said, I personally feel that unless one has specific needs for physical gold, I do not recommend them due to safety and storage hassles. 

#3 Gold-backed Exchange Traded Fund (ETF)

TradePlus Shariah Gold Tracker (Code: 0828EA) is Malaysia’s first shariah-compliant commodity ETF that tracks the performance of gold. Essentially, think of it as investing in a fund that goes up and down with the price movement of gold.

With some fees, you can invest in gold without having to take care of physical gold. 

#4 Banks’ Gold Investment Accounts (GIA)

Alternatively, you can also purchase gold through banks’ gold investment account (eg. Maybank, CIMB). That said, GIAs usually charge a spread when you buy and sell gold.

Also, just a personal experience from using Maybank’s GIA: while I could purchase my gold online, I have to visit the counter should I wish to sell my gold holdings, which is a real hassle by today’s standard.

Note: (1) **Refer HERE (2) CIMB GIA has an annual fee of RM5 if year-end gold balance <5g (3) Details about Gold-backed ETF HERE

No Money Lah Verdict

With gold being an effective portfolio diversifier for your wealth, there is no doubt that one should accumulate gold as part of his or her portfolio.

However, the million-dollar question has yet to be answered: Is now a good time to buy gold?

In the next article, I will discuss about the price of gold and if it is a good time to invest in gold - Stay tuned!

Meanwhile if you like this article and would like to open a HelloGold account (and get RM5 off when you invest a min. of RM50, be sure to click HERE and use my referral code ‘CHIN012W’!)


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

Click HERE to find out HOW you can pick and invest in quality REITs!


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.

 


Fundamental vs Technical Analysis (& How To Use BOTH of Them to Invest)

Disclaimer: I do not claim to be an expert in any of the methodologies mentioned in this article. This article is just my general opinion on FA and TA, and should not be treated as Buy/Sell call by any means.


One of the most interesting discussion, when I get to meet stock investors, is definitely one’s application of Fundamental Analysis (FA) or Technical Analysis (TA) in investing – and which is better.

While there is no right or wrong answer to this discussion (of which, sometimes turn into a debate), I thought that maybe I can share my 2 cents on this matter in this article:


First Thing First: What is Fundamental Analysis (FA), and What is Technical Analysis?

FA and TA are essentially 2 different schools of thoughts when it comes to investing. Simply put, they are two different approaches towards achieving the same financial goal in investing – to profit from our investments.

  • Fundamental Analysis (FA)

FA is an approach used by investors to identify the underlying intrinsic value (a.k.a. the real worth) of a company or stock via studies on industry and company’s data & financial statements, economic cycle and seasonality and more.

Ideally, investors that use FA aim to invest in a company while its shares are being sold at a price lower than its intrinsic value. As such, investors will then profit from the dividend returns and when the price of the shares increases down the line - a.k.a. Value Investing.

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Fundamental Analysis (FA) - the use of economic and financial data to study a company inside out.

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  • Technical Analysis (TA)

TA, on the other hand, is another approach towards investing via the analysis of price charts. Through price charts, investors are able to identify important details such as the price trend and the momentum of a company's price.

From that, investors will be able to gauge their ideal entry and exit price.

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Technical Analysis (TA) - the use of price charts to study trends and momentum.

So…Which Approach is Better?

Simply google for this topic and you will get a lot of heated debate between pure FA and TA investors criticizing the approach by the other party – and for good reasons.

  • The Problem with FA

For one, while FA takes into account of various data from financial statements, economic outlook and cycles and, heck, even project future growth with projection models, it CANNOT run away from making underlying assumptions (eg. Assuming X% growth annually, Assuming company X gets this government contract…).

Meaning, assumptions made MAY or MAY NOT come true – hence affecting the outcome of a particular investment decision.

In addition, buying into undervalued stocks with high intrinsic value DO NOT mean that your investment will increase in value the next day (psst..it may take years).

Reason being, the market (reaction between buyers & sellers) is not rational, and may not reflect the underlying intrinsic value of a stock’s price. As such, for certain investing decisions made purely on FA, it will take a lot of patience for things to work out in one’s favor.

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Do you have the patience to wait for your investment decision to reach its potential?
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  • The Problem with TA

On the other hand, the use of TA is widely subjective on 2 underlying elements: time horizon and techniques. Let me explain:

The time horizon of an investor when it comes to TA can affect one’s view on the market for a various degree. As an example, a long-term investor (5 – 10 years) may look into the below chart and have a bullish (a.k.a. positive) view on a particular stock, yet a shorter-term investor may have a bearish (a.k.a. negative) view on the stock.

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Another thing when it comes to TA is that there are so many different methodologies (Price Action, Turtle, Ichimoku, Elliot Wave, etc.) and indicators (MACD, RSI, Bollinger Band, etc.) out there, it is almost impossible for all TA investors to come into agreement for one particular set of price chart.


Why Do I Use Both FA and TA in Making My Investing Decision?

So far, it is not hard to see both the strengths and weaknesses of each approach when it comes to investing:

FA enables us to study a company inside out via financial data and economic/industry outlook, yet lack the precision needed for investors to enter the market.

On the flip side, TA allows us to look into price charts and time our entry into the market with the help of price action and indicators. However, TA methodologies could be different depending on who’s using them, hence making it very subjective.

But hey, WHY NOT leverage on the strength of both FA and TA to improve our overall investment decision?

As in, WHY NOT leverage on FA to help analyze a stock inside out and obtain its underlying intrinsic value (which TA lacks), and apply TA to assist us in our entry into the market (of which FA is weak in)?

Make (a lot of) sense?


Example

A very common way of identifying if a REIT’s intrinsic value is through comparing a REIT’s market place against its Net Asset Value Per Unit (NAVPU). Generally, a REIT that is sold at a market price less than the NAVPU is considered undervalued.

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Note: Market price is RM1.38 as of the time of writing. (Source: i3investor)

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Now, considering that due-diligence has been done and given that YTL REIT has a NAVPU of RM1.606 – meaning, rationally, this is where the market should price YTL REIT in an ideal scenario. Yet, on the price chart below, even at an obvious upward trend, market is still pricing YTL REIT (RM1.38) way below its NAVPU of RM1.606.

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NAVPU (RM1.606) > Market Price (RM1.38) - Undervalued.

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In general, as an investor that purely use FA in his/her investing decision, any price below intrinsic value would be a decent buy. However, one may find it challenging to identify a relatively better entry without the use of TA. (eg. While buying at an all-time high of RM1.38 is still a fundamentally lower price, yet wouldn’t it be better if you are able to enter at, say, RM1.20?)

Now, after using FA to identify undervalued stocks, I’ll normally apply one simple TA method call Moving Averages (MA) cross (refer to picture below). This method would help me identify trend changes on price charts:

Simply put, when the 50-Days MA (Green line) crosses above 150-Days MA (Yellow line) and both MAs are sloping upward, it would signify an uptrend movement and would be an ideal entry point for me.

Therefore, even when YTL REIT is valued below its intrinsic value (RM1.606), with a simple TA method, I can identify a relatively better entry. This is a better gauge for entry for sure, if you were to ask me.

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The use of Technical Analysis (TA) provide investors guidance on a relatively better entry and exit.

No Money Lah’s Verdict

So here you go! This week’s article goes a little more in-depth about investing methodologies and approaches, and I genuinely hope that you learn or gain something out of this!

With that in mind, if you find this article useful, do consider SHARING this article out, and be sure to subscribe for more value-adding content from No Money Lah!


 


Introduction: REITs and Why Invest in Them?

As a kid, two of my most visited shopping malls are Mid Valley and Sunway Pyramid. While both are without doubt huge malls, an experience stood out the most while I visited these malls every time as a kid: it was pretty damn hard to look for a parking space!

Wouldn’t it be amazing if you can own part of these crowd-magnet malls, or get a share out of their profit?

Well, in a way, you can!

Today, I would like to talk about Real Estate Investment Trust (REIT), a personal favorite subject of mine.

Can you guess how much is the monthly rental of a little kiosk like this in Mid Valley? (Source: Mid Valley)

(1) What are REITs?

Real Estate Investment Trusts (REITs) are companies that own and/or operate real estate. Publicly listed REITs are traded just like any stocks listed in the stock market, making it very easy to invest in REITs.

Some of the more well-known real estates that are part of Malaysia REITs portfolio include Sunway Pyramid (SunREIT), Mid Valley (IGB REIT), The Gardens (IGB REIT), KPJ Hospitals and Specialist Centers (Al-Aqar REIT), Pavilion (PavREIT), JW Marriott hotel (YTL REIT) and more.

In short, REITs are great investment instrument for those who wish to own or profit from popular and profitable real estates – where others spend and consume on these places, you profit from them.

Source: Sunway City

(2) How do REITs make money?

To recap, REITs are companies that own and/or operate real estate. When it comes to real estate, it is not hard to understand the underlying business model of REITs – a.k.a. How do REITs make money?

Mainly, REITs make money through rental income from the real estates that they own and/or operate.

As an example, IGB REIT’s income is derived from the rental collected from its tenants for both Mid Valley and The Gardens Mall.


(3) Why Invest in REITs? – the Pros of REIT Investment

REITs are especially well-received among people longing for long-term investment for some of the reasons below:

a. High proportion of Income Distribution

In order to be qualified as a REIT, companies are required to pay out at least 90% of its net income as dividend to their investors.

Which lead me to my second point…

b. Attractive Dividend Yield – making it a great passive income stream

Due to the dividend payout nature of REITs, dividend yield from REITs is generally better than typical stocks dividend in the market.

In general, Malaysian REITs yield a decent 5% – 7% dividend on a yearly basis. Aside from that, should investors time their entry point properly, they are also able to enjoy growth from capital appreciation as well. (eg. Buy at RM1.00/unit. A price rise to RM1.20 will make up to 20% capital growth for investors)

Yield Performance of REITs vs other instruments.
Sources: Respective instruments' official page, CEIC Data

c. Relatively less risky than typical stock investments

REIT investment is also relatively less risky compared to typical stock investments due to most REIT’s business model that lock in tenants for at least 1 – 3 years, ensuring a relatively stable income stream for REITs.

REITs volatility in comparison to the market. (Source: Investing.com)

(4) Cons & Risks of Investing in REITs

a. Less capital growth opportunity

Due to its nature of being more stable in relative to typical stock investments, REITs growth in revenue and profit is often predictable, making it less exciting for short-term speculators and traders to speculate the REIT sector.

In other words, REITs growth are more likely supported by its fundamental business growth – making REITs an answer for those who seek long-term investment opportunities, but not so much for short-term speculators and traders.

b. Exposure to Market Fluctuation

Unlike conventional real estate investment, publicly listed REITs are also constantly exposed to a certain degree of market fluctuation due to its nature of being listed in the stock market.

Meaning, regardless of the fundamental stability of a REIT business, REITs are still prone to a certain degree of price fluctuation in the market.

c. Change in Portfolios’ Fundamental

Similar to conventional real estate investment, REITs also have the risk of having a strong income-producing real estate turning otherwise due to changes in market demand or fundamentals.

As an example, Sungei Wang Plaza (CMMT) and Subang Parade (Hektar REIT) used to be the to-go malls in the 90s, yet the rise of more attractive malls eventually replaced their glory.

Subang Parade - once known as the longest shopping mall in Southeast Asia. (Source: Subang Parade Official Facebook Page)

(5) How to Invest in REITs?

There are both private (Alpha REIT) and public-listed REITs (eg. SunREIT, IGB REIT, Axis REIT, YTL REIT) in Malaysia.

Generally, the easiest and most common way for one to invest in REITs is through the stock market, as there is where one can find publicly-listed REITs to invest in.


No Money Lah’s Verdict

Personally, I find REIT investment relatively simple to understand and work around, due to its business model that is (most of the time) straightforward.

In a way, REITs allow retail investors to invest in a portfolio of income-generating real estates, while enjoying the convenience of participation of the stock market. (eg. Buy and sell as instantly as you please, unlike conventional real estate/property transactions)

With that in mind, I believe that there is no harm to have REITs in your investment portfolio.

In the coming posts, I will dive into the different type of REITs and an overview of REITs in Malaysia, so stay tuned!

Do you invest in REITs? If you do, what REITs have you been investing lately? Would love to hear from you!


p.s. REITs are my personal favorite when it comes to long-term investment due to its decent dividend and simple-to-understand business model.


How to Make your First Trade on Rakuten Trade?

From my previous article, I have shared about the important elements that you should consider when opening a stock trading account. I have also shared a step-by-step guide on how to open a Rakuten Trade stock trading account too.

That said, opening a stock trading account does not solve ONE key problem:

How to make your first trade?

Reason being, every stock trading account has a different interface and it could be overwhelming especially for someone new to the stock market to start making transactions if one does not understand how and what certain key functions mean and works.

In this article, I am going to share a simple step-by-step guide on how to execute a transaction on Rakuten Trade, and explain some key terminologies along the way (Don’t worry it is very straightforward once you get it!).

Before we move on, I am assuming you have read my article on How to Choose a Stock Broker and have opened a Rakuten Trade (Cash Upfront) account. If not, you can read it HERE.

With that in mind, buck up, and let’s go!


Step-by-Step guide to Buy a Stock on Rakuten Trade

 

Upon logging in to your Rakuten Trade account for the first time, you will have to first fund your trading account using the funding methods available. In short, the easiest method is to fund your account using your savings/current account.

 

Step 1: Search for the stock that you want to buy at the search bar.

 

Step 2: Click ‘Buy

Order Page

 

At the order page, there are a few key sections that you got to familiarize yourself with:

1 – Trading Limit: How much capital you have to invest.

2 – Market Price: The price where a share is traded most actively between buyers & sellers.

3 – Best Buy & Best Sell Table (Market Depth): This table shows us what is the price that the people are lining up to buy/sell and the volume.

The more volume it is for a price, it means that the faster you will be getting it once you execute an order. (eg. You will be able to buy at RM1.28 immediately compared to trying to buy at a lower price of RM1.27)

4a – Board Lot & Odd Lot:

Board lot means you buy in a minimum multiple of 100 units. (1 Board Lot=100 units of shares, RM1.28*100=RM128)

Odd Lot means you can buy in a multiple of 1 unit.

•Since more people will buy in Board Lot, your order will usually be filled easier compared to buying in odd lots.

4b – Quantity:

•If you buy in Board Lot, your quantity will be in the multiple of 100. (eg. Put 2 if you want to buy 200 units of shares)

•Odd lot means you are free to key in any number of units that you want. (eg. Key in 88 if you want to buy shares in 88 units)

5a – Order Type:

  • Limit Order: Queuing to Buy LOWER than market price. (if you are selling means you are queuing to Sell HIGHER than market price)
  • Market Order: Buying or selling at MARKET PRICE. (order will be fulfilled almost instantly)

5b – Limit Price (not available if ordering at market price):

  • The price you want to buy below market price. (eg. Queuing to buy cheaper at RM1.26 instead of the market price of RM1.28)
  • Note that buying below market price may not 100% guarantee that your order will be fulfilled.

6 – Validity (only available if buying/selling via Limit Order):

  • Day: Your order will be canceled if it is not fulfilled by day end (5pm). (eg. If you queued at RM1.26 but did not get fulfilled, then your order will be canceled by 5pm the same day)
  • Good-Till-Date (GTD): You can decide the validity of your order. (eg. You queue for the price of RM1.26 until X date)

7 – Trading Pin: Your numbered pin to approve your trade. (Set when you open your account.)

You have successfully made your first transaction!

Step 3: Fill in the details of your trade, your Trading Pin and click Confirm Order.

Note:

1. Decide if you are buying Board Lot or Odd Lot.

2. Decide your Quantity.

3. Decide your Order Type.

4.Key in your trading pin.

5. Confirm Order.

6. Wait for your order to be filled.

And we are done! This is how exactly you can buy your first stock via Rakuten Trade.


KLSE Market Operating Hours

The market is open from Monday to Friday, except for public holidays. Details on active market hours are as stated below:

Stock market operating hours

No Money Lah Verdict

With a good understanding of the terminologies and functions, hopefully, you will not be so overwhelmed with these stock trading platforms!

  • If you find this article useful, and would like to open your Rakuten Trade stock trading account, do consider using my referral link HERE to register for your account (or enter ‘NoMoneyLah’ under ‘Educator’ when you register). For that, you will gain 500 RT points from this registration. Otherwise, you can always google for Rakuten Trade and open your account too.

Open Your Rakuten Trade Account Today!


Read more:

(1) 5 BIGGEST MISTAKES that I Made In Stock Market Investing

(2) Have a question about Rakuten Trade? Get your solution here!

(3) Read this before opening your stock trading account!

 


What is Amanah Saham & How to Invest in it? (Part 1)

I have never paid much attention to Amanah Saham investment until a recent request from a reader to write about it sometime back in May.

In fact, my initial impression towards Amanah Saham was that most of its funds are for Bumiputras, and funds that are open to the public are very hard to buy – and that was everything I knew. But thanks to the request from that reader, I have found myself researching about arguably one of the most reliable investments that give a very solid return.

Without further ado, let’s find out more about Amanah Saham!

What is Amanah Saham?

Amanah Saham are funds that are managed by Amanah Saham National Berhad (ASNB), a subsidiary of Permodalan Nasional Berhad (PNB). ASNB was established on 22 May 1978. In short, ASNB is a government-supported unit trust management company.


Fixed Price Fund vs Variable Price Fund

As of the time of writing, there are a total of 14 Amanah Saham funds under the portfolio of ASNB, and of all, there are 6 Fixed Price Funds and 8 Variable Price Funds:

Funds open to all Malaysians are highlighted in yellow.

(A) What’s the difference between Fixed Price Funds and Variable Price Funds?

 

Fixed Priced Funds

Variable Priced Funds

Value Fixed @ RM1/unit. Varies according to the market.
Sales Fee 0% 3% - 5%
Performance Consistent (6%-7%) Fluctuating

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To give you a better picture, just take Variable Price Funds just like the conventional mutual funds in the market. As the name suggests, Variable Price Funds are funds that will fluctuate in value in accordance with the market movement. In terms of fees, Variable Price Funds also charge sales fees between 3% - 5%.

Simply put, for your Variable Price Fund investment to match the return of a 3% Fixed Deposit (FD) rate, your fund’s return will need to be at least 6% (assuming a sales fee of 3%) – which I wouldn’t recommend putting your hard-earned money in considering the inconsistent performance of all Variable Price Funds for the past 3 Financial Years.

On the other hand, ASNB’s Fixed Price Funds are the ones that everyone is talking about. The key strength of Fixed Price Funds (well, you have guessed it, didn’t you?) is the value of the fund will be fixed at RM1/unit no matter the market condition. Not only that, there is also no sales fees (yes, 0%) charged by all 6 Fixed Price Funds.

The best thing? All 6 Fixed Price Funds have been paying an average 6%-7% dividends consistently for many years, making them one of the most reliable investment vehicle in the market.

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Comparing 2 of ASNB's most established Fixed & Variable Price Funds

(B) All hail, Fixed Price Funds! (Benefits)

For all the reasons above, I will discuss specifically on Fixed Price Funds as these are what everyone is talking about when it comes to Amanah Saham investment.

Personally, I am genuinely happy to see that out of the 6 Fixed Price Funds, 3 (ASM, ASM 2, ASM 3) are actually open to all Malaysians, and I was delighted for good reasons:

#1 Unit value is fixed at RM1/unit:

Meaning, any market fluctuation will not affect the fundamental unit value of these funds. In other words, in the instances where the market is so bad that there is no dividend payout at all, at least the value of your fund will remain constant.

This makes Fixed Price Funds stand out as one of the best Unit Trust investment available in the market.

#2 Consistent Dividend:

Fixed Price Funds are famous for good reasons. One of them is because they are able to deliver a solid and consistent performance for a long period of time.

From my research, all 6 funds are able to deliver an average of 6% - 7% return on a consistent basis for the past 5 financial years (More about their performance on Part 2).

A consistent 6% dividend, when reinvested (which these funds do), will bring you a massive compounded return over a long period of time.

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RM10,000 compounded at 6%/year vs simple return

#3 Dividend Earned is not Taxable:

So you do not have to worry about tax filing.

#4 No Sales Charge:

Another highlight feature of Fixed Price Funds. Meaning, you do not have to pay any sales fee if you purchase any new units.

That said, Funds have full discretion to charge a 1% sales fee – just saying.

#5 On-The-Spot Redemption:

You can withdraw your investments and get your money immediately (either via cash/cheque/bank transfer).


(C) Risks & Cons of Amanah Saham investment (Fixed Price Funds)

One thing that we have to keep in mind is that there are no investments that are 100% risk-free. Here are some of the risks and cons of investing in the Fixed Price Funds of ASNB:

#1 Market Risks and Interest Rate Risk

All Fixed Price Funds’ performance and return are subject to the fluctuation of the market and interest rate.

While it is true that the unit value remains fixed at RM1/unit, dividend payout may fluctuate in accordance with funds’ exposure market and interest rate fluctuation.

#2 Capital not Protected

Your capital is not protected by Perbadanan Insurans Deposit Malaysia (PIDM) if ASNB goes bankrupt.

#3 Availability of Funds

As there is a quota capped to our race to these funds, when the quota is fully filled, you will have a hard time trying to get into these funds (unless suddenly someone let go of their units).

#4 Withdrawal Hassle

Any withdrawal of funds must be made over the counter at ASNB’s branches.


How to Register for an ASNB Account?

To register for an ASNB account, you must bring along your IC and the minimum cash needed for the initial subscription for the funds (RM10 for Fixed Price Funds), and apply at any ASNB branches or agents.


No Money Lah’s Verdict

In my opinion, I honestly think that if you can get your hands into any of ASNB’s Fixed Price Funds, it is no doubt one of the best money decisions that you will ever make, period.

For myself, I will go and open my ASNB account and start trying my luck to get my hands on any of these funds, and I will keep you all updated on my experience (so stay tuned and subscribe if you haven’t already!)

In Part 2, I will introduce and go through the performance of all 6 Fixed Funds with you, so you can decide which one to invest in after that! As for Part 3, I am going to share my personal view on Amanah Saham investment (plus my rants - you gotta check it out!).

Have a good read!


Disclaimer: The accuracy of this content is based on the best effort by myself and at the time of writing. I do not guarantee the validity of this content as details and performance of ASNB and its funds will change over time. This article is also not a buy/sell recommendation. Please seek professional financial planner's advice on this matter.

Credits to MyPF and MyFinTalk for their comprehensive writings on ASNB!


Note: For all my Bumiputera friends and readers that may be asking about to buy into Amanah Saham via cash or ASB Financing, definitely check out the articles by Crezki & KC Lau for more tips and info!