How do i create wealth from my investment in Unit Trust?

1. Investment is about RETURN? Good or bad investments depends on how MUCH return that your investment can generate.

2. Unit trust RETURN is generated in 2 ways.

First is through distribution (dividend as everybody understand). Distribution usually given once a year on the total no. of units a unit holder has. Eg. If your have 10,000 units of a fund, the Unit Trust company declares, distribution of 5 cents per unit. Then your return from that investment is RM500.

Second is through capital appreciation. How? Assuming you bought a fund at 25cents per unit. Let say after 3 years, the fund price is now 30cents per unit. For each unit you have gained 5cents. If you have bought 10,000units of this fund at 25cents and after 3 years you sold it at 30cents per unit. You would have easily profited RM500.

4. So, now...for an investment in unit trust, you will get your return from combination of both the above mentioned ways. If an investor who chose to reinvest his distribution, he would easily compounded his profit. eg. Assuming the RM500 that he got from distribution, he reinvested it again and this money will have increased his units to more than 10,000units. So after 3 years when he sells his fund, the return will definately be more than RM500.

5. For you to realise the capital appreciation, one of the way is through dollar cost averaging. This can be done by doing fixed monthly investment. As your investment goes up & downs, the averaging effect will inturn create a good appreciation of your investment.

6. As adviced by investment gurus, when everbody is greedy (during market ups) we must be cautios and when everbody cautios (when market down) we must be greedy. It is a cheap sale. Imagine a fund launched at RM1, and during recession time like now, the price will definately lower than RM1. eg. Public Ittikal fund was launched in 1997 at RM1, it has gone up as high as Rm1.40 and now RM0.87 (closing price 10/7/08) If you enter the market now, and do some fixed monthly investment disregards of the markets ups & downs, you have put yourself for an golden opportunity of tapping the real potential of the fund priced at Rm1.

7. Dont be afraid of recession. Its a golden oppurtunity for real winners.