Services – Fund

FUND INVESTMENT

Why funds investment?

If that’s a question you have in mind, you’re looking at the right place for answers.

Let’s start things off by talking about our income. It’s the basis of everything. After deducting our income with our expenses, we would end up with what we call surplus money.

Here’s the key. What do we do with this surplus money, or some say disposable income?

Some say putting it in a bank as fixed deposit, current account, or savings accounts. Some say using it to start a business or buy some properties or shares.

Funds investment is another option you could explore. But why? Let’s compare the pros and cons between the several options for your surplus money.

Fixed deposit / Current Account / Savings Account

  • Pros: Stable interests, no risk
  • Cons: No potential of increased return

Starting a business / Purchasing properties / Purchasing shares

  • Pros: Potential of increased value and return
  • Cons: Risk of failed investments, hassle of constantly monitoring the market (shares)

However, with funds investment, it offers security by being what we call an “all weather” investment. In other words, it floats according to the market. Your funds associate would analyze the market and offer advice based on it.

A key component here is the Accumulation of Units concept. For example,

When the price per unit is $1, you go for 1000 units for the investment of $1000.

When the price per unit is $0.50, you go for 2000 units with the same investment of $1000.

When the price per unit is $2, you go for 500 units with the same investment of $1000.

There you have it. It’s a reactive way of investing in which you neither over-commit or under-commit.

When we mention about funds, we cannot go without mentioning the 3D, in which it represents Discipline, Dollar-cost averaging, and Diversity

Let’s go through each of the Ds:

Discipline:

A vital part of funds investment as it involves a load of discipline.

Rash decisions shall not be made when it comes to funds investment.

A thorough analysis of both the investor and the market shall be made in order to find the best suited investment.

Dollar-cost Averaging:

A strategy to invest fixed amount of money at regular intervals, regardless of market movements.

The accumulation of units explained above is an example of how this works, where you keep a constant amount of investment despite market movements.

The amount of shares purchased is determined by the market. Thus when the price is lower, more shares would be purchased with the same amount of investment.

Diversity:

It’s never one set of solution for all when comes to funds investment.

Depending on your risk tolerance, preference choice, and financial goals, you may choose either a conservative, moderate, or aggressive approach.

With a conservative approach, you generate income funds, in which the goal is to provide a safe and consistent return via investments.

This is a relatively low-risk, low-reward approach which allows you to have a peace-of-mind. With a moderate approach, you generate balanced funds, in which the goal is to seek both growth and income.

This is where your funds will constantly be balanced out according to a pre-determined ratio, creating what we call an auto-balancing effect. For the adventurous ones, going with the aggressive approach involves generating dynamic funds, in which you invest in companies whose growth potential is considerably higher than others. This is a relatively high-risk, high-reward approach.

Nevertheless, technical as it may sound to you, fret not as Great Vision is here with a team of experienced associates who work closely with our business collaboration partners, whose aim is to provide you with the best advice and assistance in achieving your needs.