Investing in the stock market or unit trusts?
The share market has been doing really well in the last few months. And I am sure people have been making money and have been laughing all the way to the bank.
I have always been a fan of the equity market. No matter what your risk profile is, I am sure you will still find that the equity market is fascinating.
But I have this huge problem …. I do not pick stocks well. I mean, I know blue chips are great, so you just need to buy and hold and ride it through etc. etc. But then again, Transmile was a darling too right? Look where it is now.
I am really amazed with people who can tell if the stock has good fundamentals in relation to its peers or if the technicals are in line with the fundamentals, etc. And for the life of me, I do not know if the stock prices are hiking because some speculators are in the market “frying” up the stock price or not!
As a result, my winning streak with the share market is nothing to talk about, sadly.
However, I am very happy with my investments in unit trusts. I have been putting money into it every month no matter if the market has dipped or has gone up. Set amount every month and I must say after 1.5 years riding the market, I am currently about 10% up in my portfolio. And with the market looking as it is, I am confident about making more by year end.
I believe when a set amount is put aside every month without bothering about the market condition, I am effectively taking the emotions part out of the equation and hence, the investment decisions become more objective.
And when the market calls for it, switching is done automatically. Again, this is taking out the emotions since technical charts does not have a heart attached to it. I believe these calls are more difficult with a particular stock since the vulnerability is greater whereas a UT is a pool of funds and the risks are equaled at the end of the day.
So, that is me. I prefer to invest in unit trusts rather than picking stocks myself. What about you? Which do you prefer, especially in the current market condition?
This post has 2 comments
August 5th, 2009
I too do not have a knack for picking out good stocks. It’s by luck that I make good money out of any counters. As such, I thought investing in unit trust funds is a good option for me because I have the help of an agent to tell me which funds to invest in to meet my objectives, and the fund managers behind it all to make the investments work. But sadly, I don’t think I picked the right agent!
August 19th, 2009
Yeah, I think it is quite a common phenomenon, this not being able to pick out good stocks and all.
My remisier said – forget fundamentals, just go with the market, it is a gamble anyway!