The Search for Alternative Investment in Malaysia
Here’s the dilemma faced by the modern
investor: current instruments are insufficient. Does one invest in stocks,
which are volatile, can be highly risky, time-consuming, and require a certain
amount of expertise? Or should one invest in investment funds, which despite
their fees, are still considerably risky? What about fixed deposits, bonds, or
equities, whose relative safety comes at the cost of low interest rates,
usually so low that they struggle to keep up with inflation rates? Many of
these instruments have a lock-in period (usually years) which means that the
returns are only received after a long wait.
Malaysian investors are not insulated from
the above issues, the fixed deposit rates are fairly low at ~3.5% and have a
lock-in period, unit trusts charge high entry fees and expensive annual
maintenance fees. Add the fact that it only makes sense to invest in unit
trusts over a medium to long-term horizon to account for the initial buy-in
costs and the typical Malaysian investor will have to think twice. Some unit
trusts can charge up to 5% for buy-in and 1-2% for annual maintenance costs.
Other forms of investment like stocks are either too risky or need expertise.
What most investors need is an investment
instrument that occupies a nice middle ground, a source of alternate recurring income
that provides higher but relatively safe returns. For the savvy investor there
is an additional need for diversification.
It’s quite astonishing that there is no
such product which can satisfy the important criteria of high returns, easy to
understand, and low entry barriers for the Malaysian investor! We have an
answer, a solution, and a surprise, all at once. Stay tuned! We have an announcement