Despite the current state of the global economy it is good to be reminded that in every dark cloud there is always a silver lining. So stay clam. There is no need to raise the red flag or press the panic button.
Just imagine you are in an elevator heading towards the penthouse. Midway through the journey up, the lift changes direction and moves to a lower floor. What do you do? Exit? You don't obviously. You will ride to the ground floor, Right?
The point here is when you put money into unit trusts, the goal is to make investment grow to meet long term objectives such as as retirement and children's education. Now the market has suddenly taken a detour just like the elevator. What should you do? Redeem? Or you hang on? If you redeem, you will lose out and you will not be able to fulfill your long term goals. It would be like exiting at the wrong floor. It is not advisable to do that.
Statistics has proven that whatever goes down will go up eventually. In times like this, it is imperative to stay calm and not lose focus. Practise ringgit cost averaging to ride out the volatility. Recognise this time as an ideal time for you to build a nest egg for the retirement or follow-up on other financial goals due to the low entry price of equities. This is also the time to consider transferring conservative savings such as fixed deposits and savings account and diversify them into selected equities as the potential returns over the long-term will outperform and certainly hedge for inflation.
And to quote Warren Buffet, "If you wait for the robins, spring will be over".
MFGAM Tey Kok Tai, Muar
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