How to Buy ETFs in Malaysia Easily and SAFELY

How to buy ETFs in Malaysia, you ask? You’ve come to the right place. Short for exchange-traded funds, these investments are gaining popularity and may be a better option than unit trusts.

So here’s a quick run-through some questions I sometimes get: (1) are ETFs a good investment, (2) are there good ETFs options in Malaysia, and (3) do I personally have investment in ETFs.

And the answers are, (1) yes, with caveat (2) yes, and (3) yes.

In this article, I’ll share why ETFs is a good investment (or not), how to buy ETFs in Malaysia, through which platforms (plus pros and cons of each), and answer some FAQs on buying ETFs in Malaysia. Let’s start with,

Is ETFs a good investment?

Yes. Yes it is. ETFs are awesome. It is recommended by many top personal finance experts I respect, including Sallie Krawcheck and Ramit Sethi.

Ellevest
 (where Sallie is the CEO) has the easiest-to-understand definition of ETFs:

“Exchange-traded funds (ETFs) are baskets of investments that resemble mutual funds, but trade on an exchange like a stock. They also tend to have low fees.”

The low fee part is important.
 Even
Bursa Malaysia Exchange-Traded Funds page
 said ‘Lower annual management fees for ETFs compared to unit trusts makes ETFs economical to buy and to maintain in the long run.’

However, this is not a blanket statement – ETFs may NOT be a good investment if:

You have not completed Step 3 in the
 7 Steps to Achieve Financial Freedom in Malaysia
 guide

You do not invest with long-term horizon (for short-term savings, use these
Savings Accounts
 instead)

You play around with Leveraged/Inverse ETFs without knowledge (those are for high-risk investors/traders)

How to Buy ETFs in Malaysia

There are 3 main ways to invest in exchange-traded funds in Malaysia. I’ve ranked them (loosely) from easiest to hardest:

Via robo advisors

The ones listed on Bursa Malaysia

Via online investment platforms

(Are there more? Let me know in the comments 🙂

Note: You can also buy ETFs via other platforms outside of Malaysia, but I wouldn’t recommend it. I don’t care if other people use it and claim it’s safe. I wouldn’t.

Not only it is UNREGULATED, it also requires you to open a foreign account before you can top up your accounts. It’s also messy and inconvenient, so ignore this option if you want to keep it safe and simple.

#1 – Buy ETFs via robo advisors

The easiest way to invest in ETFs in Malaysia is through robo advisors. This is a great method for most investors – just top up monthly or regularly.

As of time of writing, there are 8 robo advisors serving the Malaysian market – at least 1 of them will be perfect for you. See comparison between them in
Ultimate Comparison Between 8 Robo Advisor in Malaysia
 article.

With robo advisors, you may not invest in just one ETF, but rather a combination of, depending on your portfolio (they will help you choose). For example, this particular portfolio has 65% allocation in Global Stocks, 20% in Emerging Market Stocks, Sukuk and Cash.

Pros of investing in ETFs via robo advisor:

Amazing UI/UX. Easy to navigate and beginner-friendly

They help you select which ETFs to invest in and/or % of ETFs in your asset allocation, based on your risk appetite and goals <— this is a HUGE pro!

Access to ETFs in global markets

You can automate monthly topup so it’s a nice way to invest passively. A set-and-forget system. This strategy is called
dollar-cost averaging
 – arguably the best investment strategy there is

No matter how many times you buy or sell ETFs, you only pay a set annual fee, calculated in %. It’s very straightforward and affordable

Cons of
investing in
ETFs via robo advisor:

People who have excessive Domestic Ringgit Borrowing (local loans/debt) may not be able to open an account. BNM rules

#2 – Buy ETFs listed on Bursa Malaysia

The second way to invest in ETFs in Malaysia is to buy the ETFs listed on the Main Market of Bursa Malaysia.

As of writing time, there are 16 ETFs available, divided in the following categories:

Commodity ETF

Equity ETF

Equity ETF (Shariah Compliant)

Fixed Income ETF

Leveraged & Inverse ETF (avoid this if you are new in the stock market/ investing in general, concentrate on Commodity, Equity or Fixed Income ETFs first)

You can read more info on each ETF listed on Bursa Malaysia in the
Explaining Every ETF You Can Invest and Trade from Bursa Malaysia
 article.

Buying ETFs listed on the Main Market of Bursa Malaysia should be easy if you are already familiar with the stock-buying process. Just use your CDS account to find and buy the ETFs you want. If you don’t have a CDS account, you need to open a stock brokerage account first.

Pros of
investing in
 ETFs listed on Bursa Malaysia:

Options available for low risk, medium risk and high risk investors

Access to Malaysia, China, US and some Asian markets

Cons of
investing in
 ETFs listed on the Main Market of Bursa Malaysia:

Unlike robo advisor, I don’t think you can make automatic monthly topups. Let me know if it’s possible

You’ll be charged per trade so there’ll be some strategy involved. You don’t want to make small, but frequent trades = will lose a lot %-wise in fees

You need to be aware of your own risk profile so you can pick the right ETFs for yourself

#3 – Buy ETFs via online investment platforms regulated in Malaysia

AFAIK, there are 3 online investment platforms that allow you to buy/sell ETFs easily in Malaysia:

MIDF Invest (read my
MIDF Invest review
)

FSMOne

Rakuten Trade

(Let me know if there are more online investment platforms that offer ETFs in Malaysia!)

Pros of
investing in
 ETFs via online investment platforms:

A LOT of ETFs options

Access to ETFs in global markets

You can also use the same online investment platforms to buy stocks in various markets, unit trusts (I use FSMOne to buy my
PRS fund
), bonds and more

Cons of
investing in
 ETFs via online investment platforms:

You’ll be charged per trade so there’ll be some strategy involved. You don’t want to make small, but frequent trades = will lose a lot %-wise in fees

The fact that there is a LOT of ETFs options can also be a con. They may offer educational materials and selector tools but at the end of the day, YOU as the investor must know your own risk profile and investment goals

I am not kidding about how many options there are. As of writing time,
FSMOne
 alone offers 3,420 ETFs in their platform! (If this alone overwhelms you, just use robo advisor or pick ETFs listed on Bursa Malaysia)

FAQs Section on Investing in ETFs in Malaysia

#1 – Which is the best ETF in Malaysia

The best ETF in Malaysia is the one that suits your risk profile and diversification strategy. Are you a low risk, medium risk or high risk investor? Are you over or under-invested in particular markets?

If you don’t know, then I highly recommend using Option 1- robo advisors, or engage with a
financial planner
 – they can suggest some suitable ETFs combinations suited for your portfolio.

#2 – Can I invest in gold ETFs in Malaysia?

Answer: Yes, you can invest in gold ETFs in Malaysia. Here are some ways:

Open a Wahed Invest account and open a Gold Portfolio. It invests 97.5% of the funds in
TradePlus Shariah Gold Tracker
 (
download Wahed Invest from Appstore/iOS
 and
use my referral code ‘surbin1’ to get free RM10 bonus

Buy
TradePlus Shariah Gold Tracker
 directly from your CDS account. It’s listed in the Bursa Malaysia Main Market

You can buy various types of Gold ETFs from online investment platforms

Note: You can also buy Silver ETFs in Malaysia, but only from online investment platforms

Are there other ways to invest in gold ETFs in Malaysia? Let me know in the comments 🙂

#3 – Can I invest in US ETFs in Malaysia?

Answer: Yes, you can invest in US ETFs in Malaysia. Here are some ways:

Open a Wahed Invest account and open a US Stocks Portfolio. It invests 97.5% of the funds in
Wahed FTSE USA Shariah ETF
 (
download Wahed Invest from Appstore/iOS
 and
use my referral code ‘surbin1’ to get free RM10 bonus

Go to
Ultimate Comparison Between 8 Robo Advisor in Malaysia
 article and see the Best Roboadvisory in Malaysia: Global Exposure section

Buy
MyETF Dow Jones U.S. Titans 50
 directly from your CDS account. It’s listed in the Bursa Malaysia Main Market

You can get various types of US ETFs from online investment platforms too (probably the easiest way to get the famous
Vanguard S&P 500 ETF
 in Malaysia)

Are there other ways to invest in US ETFs in Malaysia? Let me know in the comments 🙂

#4 – Can I invest in China ETFs in Malaysia?

Answer: Yes, you can invest in China ETFs in Malaysia. Here are some ways:

Open a Wahed Invest account and open a China Stocks Portfolio. It invests 97.5% of the funds in
VP-DJ Shariah China A-Shares
 (
download Wahed Invest from Appstore/iOS
 and
use my referral code ‘surbin1’ to get free RM10 bonus

Go to
Ultimate Comparison Between 8 Robo Advisor in Malaysia
 article and see the Best Roboadvisory in Malaysia: Global Exposure section

Buy
Principal FTSE China 50 ETF
 and/or
TradePlus S&P New China Tracker
 and/or
VP-DJ Shariah China A-Shares
 directly from your CDS account. It’s listed in the Bursa Malaysia Main Market

You can get various types of China ETFs from online investment platforms too

Are there other ways to invest in China ETFs in Malaysia? Let me know in the comments 🙂

#5 – What is the best ETFs investment strategy?

I maintain that for most people,
dollar-cost averaging
 strategy is the best investment strategy they can use. How it works is:

Put in RMxxx in Week 1, Week 2, Week 3… until Week 52 and repeat, or

Put in RMxxx in January, February, March… until December and repeat, or

Put in RMxxx in Q1, Q2… until Q4 and repeat

You get the gist

AFAIK, only robo advisors (see #1) can automate this process – let me know if others can as well.

I myself primarily invest in ETFs through robo advisors (secondary: online investment platforms). Otherwise, you have to manually make the order yourself every week/month/quarter. Easy in theory, but easy to skip (speaking of myself).

Do you do ETF investment in Malaysia?

If yes, which ones? How long? How is it so far?

As for me, you can view my ETF performance via the robo advisor that I chose – see
The Ultimate Wahed Invest Review (3+ Years In, RM11,000 Invested)
 article.

I’ll end this here. What tips, pros and cons related to investing in ETFs in Malaysia would you add in this article? Share in the comments so all of us can learn!


[VIDEO] A Conversation on Socially Responsible Investing feat. Najmuddin Mohd Lutfi, CEO of BIMB Investment

Let’s talk about SRI, or
Socially Responsible Investing
, also known as S
ustainable Investing
,
ESG Investing
 (Environmental, Social and Governance) or otherwise under the umbrella of
ethical investing
. I like the idea of my money being used for good, even while investing it.

But – how do you invest in ‘good’ companies? How do you even quantify ‘good’? Joining me is Mr Najmuddin Mohd Lutfi, CEO of BIMB Investment Management Berhad. That’s the company behind BEST Invest app, which offers sustainable funds for retail investors (ie you and me) to invest in.

In this video, you’ll find out:

The terms SRI and ESG Investing

How it is defined, from the financial point of view

The usage of data in quantifying ‘good’

How it is used to make better (read: more profitable) investments

The catch of using this method of investing

Plus my commentary on accountability

View the full video below 🙂

Do you factor in ethics while making investment decisions? What investments you *won’t* do because it doesn’t reflect your values? Tell me in the comments section!

Further reading:
[SPONSORED] I Tried BEST Invest by BIMB Investment, the ‘First Robo-Intelligence Shariah ESG Online Investment App’


Forex Trading Malaysia: My Experience with 3 Forex Brokers

Let me just start this forex trading Malaysia guide by saying that yes, forex is legit, but many forex brokers are not.  If you combine that with the haram factor (oh yes,
forex trading is haram
), then it’s not the most appealing of industries to enter.

But I’m getting ahead of myself. Let’s start from the beginning. We will cover terms like forex trading, leverage, and my experience with forex brokers.

The Forex Temptation

If you’re a finance nut like me, chances are you have been exposed to Forex broker advertisements. Maybe from Facebook, maybe from YouTube, definitely from Google.

I mean, you’ve ignored those forex broker ads, of course. You’re already used to it. It’s likely that your eyes sorta glaze over those ads, barely even registering it.

But once in a while, they catch your attention. And you, with your tight budget, starts to wonder,
what if forex trading is the solution to my financial problems?

As someone who felt the exact same thing and kinda dabbled in it, let me give you the lowdown on forex trading, including my experience with a few forex brokers.

Forex trading Malaysia basics:  What is Forex trading

Forex
 is short for Foreign exchange market, and
trading
is buying and selling, so forex trading is essentially
the buying and selling of currencies
. It’s the world’s largest liquid market, and literally any currency from a sound government can be traded against each other.

(Liquid means that the value is ready to be spent, to be transacted. RM1 million in cash is highly liquid, you can use portions of it for anything. RM1 million in property have to be sold in order to be spent, so it’s not considered liquid)

Financial institutions and individuals (aka retail investors) trade currencies in this market. Forex trading for beginners starts with learning the simple principle of supply and demand – if a lot of people are buying currency X, the price will go up. If a lot of people are selling currency Y, the price will go down. (It’s more complex that than but enough to know for now).

Forex exchange market hours are Monday-Friday. It is closed during weekends and public holidays.

Basics of buying and selling currencies

You have used the services of the currency exchange booth, either at the mall or bank, yes? They usually display their buy and sell price, for example:

Sell 1 USD for MYR 4.25
Buy 1 USD for MYR 4.05

They make money by charging you a fee for the service, as well as pocketing the margin, or the difference between buy and sell price.

How about you? Can YOU make money this way? Yes, IF you previously bought USD for a lower price and wait to sell it at a higher price. For example, if you bought 100 USD for MYR 3.50 each a month ago (let’s say), and sold it to the currency exchange booth for MYR 4.05 each, then you would have made 55 sen profit for each USD (before deducting fees).

What a simple way to make money, right! Theoretically, if you bought USD1000 at RM3.50 and sold at RM4.45, you would have made
RM950
, or 27% profit in less than a year.

But of course there’s a catch: wild currency fluctuations don’t happen very often. The forex chart above happened in 2015, and since then USD/MYR pair has been comparatively stable. In 2021, USD/MYR traded between the MYR 4.00-4.25 range.

In fact, this type of ‘trading’ is considered so safe, you can open foreign currency accounts in banks and hold many types of foreign currencies. Your deposits are even
protected by PIDM
.

(Alternatively, you can also keep the money as physical cash. Or if you’re crypto-savvy, you can keep a type of
cryptocurrency
called stablecoins. Up to you).

Image screenshot: Maybank

Forex brokers and forex leverage

Now, the above example is NOT the high-risk, high reward forex trading you’re thinking of. Some of you may even think – USD 1000 capital and
only
 RM950 profit in a good
year
? That’s not good enough for me! How about the people who profited thousands within days? I want to know *that* type of forex trading.

That’s where
forex brokers
which offer forex
leverage
 come in. You no longer care whether the currency will rise or fall, because you can profit from both circumstances.

Forex brokers essentially make money by charging you fees to enter trades. Most, if not all brokers offer a service related to technical analysis, whether webinars, seminars, classes, or their own forex chart software, helping you spot patterns and trends.

There are countless forex brokers out there, and aside from the technical analysis service, one of the main features people look for is how much forex leverage they offer. For example, let’s say you have USD100 in capital:

If they offer
1:10,
that means you can trade USD 1000 worth
If they offer
1:100
, that means you can trade USD 10000 worth

This is what makes it high risk, high return
. If you have winning trades, you can 10, 100x your profits. But the reverse is also true – and that’s the dangerous part.

Technical Analysis and Reading Forex chart

So I mentioned patterns and trends. I won’t go too much into details right now, that’s literally whole books and courses. Basically, there are forex chart indicators that a trader can use to predict whether the market will go up or down, and by how much. From the information, they will ‘long’ or ‘short’ the market.

This sounds simple in theory, but because the market is so wildly unpredictable, and indicators can be read wrongly,
many inexperienced traders will lose money
.
 Technical analysis is not an easy skill to learn.

Image credit: tradingview.com

The problem: many forex brokers make it sound easy

So if you ask me, can you make money from forex trading in Malaysia, I will say yes, it is, but you have to be super careful where you learn forex trading from, because forex brokers will usually try to make technical analysis sound super simple. This ad says you can learn in 4 days (??!! many people take months/years to learn! And they have probably lost a lot of money as ‘tuition fee’ in the process!)

As mentioned, Forex brokers charge you fees to enter a trade, so basically
they don’t care if you make a profit or a loss
 – they will make money either way.
It is in their best interest to encourage you to enter as many trades as possible in the shortest time frame
.

It’s not uncommon for inexperienced traders – people who were misled into thinking technical analysis is easy – to wipe out their whole account in a single trade. On top of that, they may even owe debt!

There’s no hard data (that I can find), but this article says that
95% of traders lose money in Forex
. In the comments, someone said that he is still losing money despite being 3 years in!

Not all forex brokers are unethical… but many are

To be fair, some forex brokers are more honest than others. They have the reputation for offering good customer service, transferring your earnings quickly, and have easy-to-use trading platforms.

Some forex brokers use the ‘Free to start. Free to try. Free bonus money.’ approach. Understandable, a lot of companies use this tactic too.

Others are a bit more… unethical. I’ve seen forex brokers that do advertisements that appeal solely to your emotional, desperate side. ‘Get $XXXXX of cash in a few days!’-types. If you are financially tight, this would be very dangerous.
Emotions make a shit trader.

Other forex brokers hire
forex influencers
who imply forex trading is an easy way to get rich. You know the trope: posing in front of big houses and cars, bling outfits, bling watch. This is not bad, per se – but they conveniently ignore people who lose all their money while trying to copy them.

Let me share my own experience with 3 forex brokers. You’ll see what I mean by unethical.

Forex broker #1 – That time I unknowingly worked in a forex company

In my early twenties, I applied for a lot of jobs in KL and was selected for what I thought was an executive-something position. This company has (had?) a really fancy office with KLCC view. Their office space took a whole floor in a shiny office tower, the fixtures were swanky, and the staff looked professional.

I was told that before they can sign me on, I have to undergo a week-long training. Monday came, I was really excited, although I didn’t really know what the job really entailed. I was a Shah Alam kid and this was a job in KL – whatever it was, I was eager to learn.

I was put in a small group of about 4 people to train together, and mentored by an elder woman who asked us to call her Madam. From the start, she was really nice, and encouraged us to bond.

I didn’t realise this at the time, but the ‘training’ was actually a crash course in technical analysis. She printed out forex charts, showed us how to spot indicators, and asked us to practice calculating potential profits from the example trades.

Right off the bat, we were making
hypothetical thousands of ringgits
 in just a few hours. She showered us with praises when we correctly spotted trends, and her manager told me that she foresee me doing really well, at the rate that I’m learning.

By mid Day 2, I thought that the job was to manage funds for other people. The thought didn’t scare me. I was high from all the praises – I even thought I was naturally talented at it!

By Day 3, Madam told me that I have a lot of potential and should continue to work there, but she said, and here I quote, ‘
it would be really hard for people to view you as respectable fund manager if you are not managing an account
‘.

How do I get an account, I asked.

We fund our own accounts, she said.

Madam told me she managed her husband’s account, and how it turned out to be more profitable than they thought and their retirement is all but guaranteed. ‘You should get your family members to join,’ she said, ‘so your family will be richer, instead of random people’.

She pointed to the large screen which showed a bunch of live currency forex charts. ‘I get all the support system for trading here, we colleagues help each other so our accounts get bigger’.

She pointed to some staff members and told me the accounts they managed. That staff also manages her family account. That one over there manages two accounts for friends and family.

All it takes to open an account, she said, is RM500,000.

RM500,000.

I’m ashamed to admit that I was so brainwashed with the idea that I asked my dad if he could open an account. I might have freaked him out. He said no real fast.

When I told that to Madam, she said that she was disappointed with my father’s ‘lost opportunity’.
She then suggested that I should find some family friends to ‘pool together the RM500,000.’

By this time the alarm bells rang. The next day, I didn’t even bother turning up.

I don’t know if the company was a scam. The paperwork, the establishment screamed legit.

I think that this is just the way this company, which is actually a forex broker, recruited clients. Other forex brokers use ads. They used the job vacancy section.
They turned their employees into clients.

That was a bullet dodged. Thank goodness we didn’t have RM500,000 lying around, like normal people.

Forex broker #2 – Get customers from Webinars and Seminars

On another occasion, I enlisted myself in a
12-week technical analysis forex trading webinar
. The quality of the material was good but not great, and they kept dangling the ‘pro classes’ where they promised to teach me how to make money while I traded live.

Did you get that? The classes were a customer recruitment method for a forex broker, after all! After the webinar ended, the staff followed up via email and phone calls relentlessly, for months in an effort to sign me up.

That wasn’t the only one. I also went to a free
‘learn ways to make extra income’ seminar
 advertised in The Star. Their ‘special method’ for forex trading uses Chinese astrology, I kid you not. I can’t imagine how they even use dragons and sheep in technical analysis!

(They also pushed for the audience to buy the full coaching course, which carried a 4-5 figure price tag (credit card payment is available of course).

Forex broker #3 –  Online Forex Copy Trading broker

Yes, I got sucked in forex copy trading as well. Basically what happened what I funded my account with cryptocurrency, and ‘copied’ the trades performed by high-performing traders.

Needless to say, I
lost all my money
 there. I say this from experience – don’t believe forex copy trading’s ‘easy way to make money’ promises. It’s not as easy as they make it sound.

Forex trading Malaysia: What you NEED to remember

I shared these stories not to scare you, but to remind you that the financial instruments may be legit, but many parties out there will want to exploit your desire to make money.

After all of these learning experiences, I became more selective with my investment opportunities. I also developed extra sensitivity to the psychology of limited-time offers. The moment some coach is like, ‘IS FEAR HOLDING YOU BACK FROM RICHES’, I’m like, STFU YES SO WHAT.

I’m happy being a slow investor. I like to have time to research, and have a healthy sense of fear. Perhaps it’s not making me fast money, but I’m not losing money either.

Remember, No 1 Rule of making money:
Don’t Lose Money
.
 I think it’s fine to lose *some* money – it’s inevitable in the learning process, and even the best investors/traders lose money at least some of the time. But definitely learn to
limit your losses
. If you wan’t to dabble with forex out of curiosity (like I did), only use play money, not rent money.

Do you have any experience with forex trading? Was it positive or negative? Share in the comments section so all of us to learn.


[SPONSORED] 20+ Interesting Gold Coin and Gold Bar Designs

If you’re keen to collect
something
, why not collect gold coins and gold bars? They tend to appreciate in value in the long run. If you get bored of your collection or need money, you can resell it and get back what you paid (and perhaps more than that). You can’t say the same for most other collections.

In this collaboration post with
buysilvermalaysia.com
 (which actually sells a lot of gold too despite the name), we would like to share some interesting gold coin and gold bar designs for your visual pleasure. Your inner pirate will appreciate this.

All gold coins and gold bars from
buysilvermalaysia.com
 have 99.99% purity and backed by reputable companies such as PAMP Suisse, Perth Mint and Royal Canadian Mint, or backed by banks and governments. Most of them come with authentication certificates.

Gold Coins

Perth Mint Series

TIL Perth Mint releases Chinese Zodiac animals-themed gold coins. No prize for guessing who they’re targeting. Three choices available are Lunar Dog, Lunar Rooster and Lunar Monkey. Queen Elizabeth seems to be a popular choice as back design. Check her out in Lunar Rooster – got cheekbones for days wow.

Lunar Dog

Available in 1/10 oz |
Link

Lunar Rooster

Available in 1/10 oz |
Link

Lunar Monkey

Available in 1/10 oz |
Link

Perth Mint Series

Aside from the Lunar series, Perth Mint also released the Australian Kangaroo coin and a rectangle (???!!!) dragon coin.

Australian Kangaroo

Available in  1 oz |
Link

Dragon

Available in  1 oz |
Link

Royal Canadian Mint

No other country is as obsessed with a
leaf
 like Canada, correct or not? Even the Golden Eagle design also got leaf there.

Noting with interest the different coin denomination (see back designs). The smallest coin is 50 cent; the bigger and biggest coins are 50 dollars and
200 dollars
.

Maple Leaf

Available in 1 oz |
Link

Canada Maple leaf

Available in 1 oz |
Link

Canada Golden Eagle

Available in 1 oz |
Link

Canada Maple Leaf

This one is also from Canada but not from Royal Canadian Mint specifically. It’s backed by the Canadian government. To commemorate Idk 25 years of worship for maple leaves probably.

Available in  1 oz |
Link

Gold Britannia Series

This is probably my favourite design in this list. So cool, so detailed. This coin, under the Gold Britannia series is backed by the British government

Available in 1/10 oz |
Link

People’s Bank of China Series

It’s China, so not surprised by the panda-themed coins. One closeup shot, one full body shot. Both chubby.

Chinese Panda

Available in 30 grams |
Link

Chinese Panda 2

Available in 3 grams |
Link

Gold Bars

This section is all about gold bars! I was surprised by the offerings, tbh. The packaging is much more amazing than I thought!

PAMP Suisse Series

PAMP Suisse is one of the biggest names in gold industry – their reputation is solid.

It slightly bothers me that the Lady Fortuna image is anatomically incorrect. How you hold the gold coins if your body turned sideways like that?

Lady Fortuna

Available in different sizes as little as 1g!
Lady Fortuna 5g
 is very popular |
Link

Lady Fortuna

Available in 10 grams |
Link

Romanesque

Nice design. If you’re offended for any reason, just imagine it’s the letter ‘t’.

Available in 5 grams |
Link

Love Always

Makes a
very
acceptable present.

Available 5 grams |
Link

PAMP Suisse Lunar Series

Another Lunar series, this time by PAMP Suisse. Amazing details! The dog and goat got anak!

Lunar Dog

Available in 5 grams |
Link

Lunar Rooster

Available in 5 grams |
Link

Lunar Monkey

Available in 5 grams |
Link

Lunar Dragon

Available in 5 grams |
Link

Lunar Goat

Available in 5 grams |
Link

Lunar Horse

Available in 5 grams |
Link

Lunar Snake

Available in 5 grams |
Link

Perth Mint Series

Available in two designs: a surprisingly sleek-looking kangaroo design and ‘Oriana’ design. I don’t know who Oriana is. Google says it’s a medieval name. It’s also the name of a ship and a hotel in Malta.

Kangaroo

Available in 1, 5, 10 and 20 grams |
Link

Oriana

Available in 5 and 10 grams |
Link

Gold bars

These are the ugliest gold bars among the lot, but the most valuable
by sheer volume
. Yes, that’s how 50g, 100g, 500g and a kilo of gold looks like. That’s what banks stack up in vaults. In movies, you always see a mountain of them right? Click the link to find out how much ONE of them cost.

50g / 100g |
Link

500g / 1kg |
Link

Last Words

Gold is considered a safe store of value
provided you get them from reputable sources
, and suitable for diversification purposes.

BuySilverMalaysia.com
 is a wholesaler for gold and silver which has been in the market for over 7 years. If you want to buy gold for investment, do check them out as their prices are 20-30% lower than the retail gold shops!

Another reason to buy from them is their prices are based on 24 hours Live International Pricing. This means that you can buy at anytime of the day and reap maximum savings when the gold price is low.

To view all of these gold coins and bars in one place, as well as silver coins and bars, check out
buysilvermalaysia.com
.


17 Halal Investment Options: Find Best Shariah Compliant Investments in Malaysia

A decade or so ago, halal investment options for Muslims are limited. Nowadays though, there are many! Learn how to invest halal in this article – I’ve compiled everything I know about halal investing in Malaysia!

I love the underlying values behind halal investing, like how usury (interest) or riba is prohibited, and how excessive risk-taking or gharar is not encouraged, and how maysir or gambling is forbidden.

I also love how Islamic finance and banking are structured in the for-the-good-of-the-ummah outcome, even though admittedly
things are never perfect in practice
.

Your Halal Investment Options

Throughout the years, I’ve researched all the different types of Shariah-compliant investments in Malaysia, which are deemed either halal or harus.

It came up to 17 halal investment options, which I’ve divided into 4 categories:

Islamic Unit trust in Malaysia/ Mutual funds/ Diversified funds

Shariah-compliant stocks
 and equities in Bursa Malaysia

Fixed deposits and cash management platforms

Others

Before you proceed with this article…

There are four things I need to say first:

#1 –
Muslims can still make non-Shariah compliant investments

No one is going to stop you. There is no Islamic police who will arrest you or anything. It’s a personal choice.

#2 –
Non-Muslims can do halal investing in Malaysia

You absolutely can, no problem. The only downside is the selection is much smaller, and at times non-existent –
warrants
, futures, and options trading are all
not
 Shariah-compliant.

(Don’t @ me, this is completely true)

#3 –
Spellings may differ

For example, sometimes you’ll see Syariah, sometimes Shariah. Doesn’t matter, same thing.

#4 –
I’m taking it in good faith

Islam may be perfect (for believers), but Muslims are not. If Islamic finance experts and bodies gave an Islamic product the halal stamp, I’ll add them here, even if there may be conflicting views about the ‘Islamic-ness’ of it all.

With that in mind, let’s start.

Category #1: Islamic Unit trust in Malaysia/ Mutual funds/ Diversified funds

There are many options for diversified funds, including Islamic unit trusts and mutual funds in Malaysia. Let’s go through them one by one.

#1 – Tabung Haji

Tabung Haji is fully Shariah-compliant. They will also
sort out and pay zakat contribution from your investment profits on your behalf
.

Those of you who want to go on hajj, you HAVE to open Tabung Haji account and maintain a minimum balance of RM1300.

#2 – ASNB funds

The most popular ASNB (
Amanah Saham Nasional Berhad
) funds are ASB (Amanah Saham Bumiputera) and ASN (Amanah Saham Nasional).

To be absolutely clear, even though a significant chunk of the fund is invested in non-Shariah compliant assets, it received the
‘harus’ fatwa
 from the National Fatwa Council based on the principles of Maqasid al-Shariah (top row, furthest right).

#3 – EPF/KWSP

If not mistaken, accounts registered before 2017 are conventional accounts by default. So if your EPF account is registered before then, you need to do the switch from conventional to Shariah yourself.

The process to switch from conventional to Shariah is very simple:

Log in to
EPF i-Akaun portal

Find Simpanan Shariah at the top bar

Complete e-akad

Done; it will be implemented from 1 Jan the next year

#4 – Islamic unit trusts from Private fund management companies

As for other Islamic unit trusts, you can generally (but not always) find out if the fund is shariah-compliant or not
by looking at the fund name
. If it has the words ‘
Shariah
‘, ‘
Islamic
‘, and/or ‘
Sukuk
‘ (Islamic version of Bonds) in the name, it’s an Islamic investment.

You can also tell that they’re Shariah-compliant investment if they use Arabic terms like Al-[name] in the name, or it’s issued by an Islamic fund management company, like AIIMAN.

To learn more about investing in unit trusts and where to find them, please refer to my
3 Ways to Pick the Best Unit Trust in Malaysia (Advisory & DIY Method)
 article.

#5 – Robo advisor

As of writing time, Wahed Invest is the ONLY Shariah-compliant roboadvisor in Malaysia.

Originally from New York, this platform is great for Muslim investors who want to diversify their investments easily, as they can guide and suggest various portfolios suitable to one’s risk appetite. They also have very affordable fees.

I love it as they help me diversify into US and emerging markets, and help to calculate zakat pelaburan as well, making the purification process easy.

 Read my review:
The Ultimate Wahed Invest Review After 3+ Years In, RM11,000 Invested

Category #2: Shariah-compliant Malaysian stocks and equities
 in Bursa Malaysia

All Shariah-compliant stocks and equities are managed by Bursa Malaysia Islamic Services Sdn Bhd (BMIS), a wholly-owned subsidiary of Bursa Malaysia which is regulated, transparent and fully Shariah-compliant.

Important note:

It is possible for stocks to be added to the shariah-compliant list, or taken
out
 of it. Refer to the most updated list

Shariah-compliant stocks, ETFs and REITs make up a fraction of the overall stocks, ETFs and REITs
.
For example, only 5 out of 19 REITs are Shariah-compliant investments.

Bursa Academy
 is a GREAT place to learn – workshops available all the way from beginner to advanced investors

All the data here are taken from
List of Shariah-compliant securities
 from Securities Commission
.

#1 –
Shariah-compliant Stocks in Bursa Malaysia
 (i-Stocks)

Go through the latest halal stocks list and see which ones you may want to own, whether for short or long term. You still have to apply
stocks investing strategies
.

Note: Even though everything in the halal stocks list is Shariah-compliant, you still have to avoid Interest, Uncertainty and Gambling (Riba, Gharar and Maysir) as they are prohibited under Islamic Finance guidelines.

For example
, using one’s life savings to invest in just one stock based on a rumor would be considered speculative bordering on gambling and therefore not encouraged, even if it is a Shariah-compliant stock.

#2 –
Shariah-compliant Exchange-Traded Funds
in Bursa Malaysia
 (
i-ETFs
)

As of writing time, there are 6 Shariah-compliant exchange-traded funds listed in Bursa Malaysia:

#3 –
Shariah-compliant Real Estate Investment Trusts
in Bursa Malaysia
 (
i-REITs
)

As of writing time, there are only 5 out of 19 REITs are Shariah-compliant. Here they are:

In addition to the above REITs,
AHB
 or Amanah Hartanah Bumiputera is fully Shariah-compliant. They will also
sort out and pay zakat contribution from your investment profits on your behalf
.

#4 – FCPO Contract (Crude Palm Oil Future Contract)

If you want to do halal trading in Malaysia, this is the one for you!

According to
Bursa Malaysia
, Crude Palm Oil Future or FCPO contract is Shariah-compliant. Muslim traders can check out this option. Apparently even short-selling is permissible (how does that work..? Nevermind)

*This is the extent of my knowledge on FCPO contracts. If you have experience, or know good places to learn, please add in the comments section.

Category #3: Fixed deposits and cash management platforms

#1 – Shariah-compliant fixed deposits

It’s super simple to identify Shariah-compliant fixed deposits in Malaysia. All you have to do is make sure the fixed deposit name ends with
‘-i’.

RinggitPlus.my makes fixed deposit product comparison easy. You can just click on the Islamic tab, and choices will appear on the right-hand side. You can even further sort it out by tenure.

#2 – Shariah-compliant cash management platforms

Cash management platforms are like fixed deposits, except with no lock-in period. There is no early withdrawal nor penalty for taking out your money whenever you want. In effect, I consider it a better than fixed deposit.

At the time of writing, there are 4 cash management platforms in Malaysia.
Only Touch N Go’s Go+ is Shariah-compliant.

FAQ: Is Stashaway Halal?

No, Stashaway is not Shariah-compliant. Stashaway Simple used to be Shariah-compliant, but not any more.

Category #4: Others

There are various types of assets that Muslims can invest in and profit from capital gain and/or dividend and/or revenue. Some examples include gold, property and more. Let’s cover a bit about them:

#1 – Gold

As an investment, generally speaking, gold is super halal. In fact you can even say that Islam LOVES gold. So much that the
State of Kelantan wants to be more Islam by trying to promote gold dinars and dirhams usage as legal tender
.

You can invest in gold through a few methods:

Physical gold – coin, bar, jewelry

Digital gold – e-gold, gold investment account

ETF – Trade Plus Shariah Gold Tracker (GOLDETF) (you can get at Bursa Malaysia, Wahed Invest etc)

Note:
You can read more about investing in gold in Malaysia in the
The Beginner’s Guide to Buying Gold in Malaysia
 article.

How to determine gold investments’ halal status

Physical gold
‘s halal status is easy enough to determine. Like property, all gold jewelry, coins, bars, etc, must be bought with halal income/salary and it’s halal.

With
e-gold or digital gold or gold investment accounts
 though, it can be a bit trickier to determine. Unethical parties HAVE used the gold name to promote Ponzi schemes, or sometimes claim that they have the gold but in fact, don’t.

(A requirement to halal status is the company MUST have the gold in their possession. It can’t be some ‘hypothetical’ gold).

Gold scams happen fairly often, which is sad.

#2 – Global stocks and ETFs

Many brokers allow you to buy global stocks and ETFs, of which a fraction of it are halal investment funds. To learn more, visit my
How to Buy ETFs in Malaysia Easily and SAFELY
 article (you can also buy stocks from the platforms mentioned in the article).

Here, I must give a shoutout to
MIDF Invest
 – it can help you filter Shariah-compliant stocks and ETFs easily (not all brokers have this feature).

#3 – Property

Properties, whether house or land is considered shariah-compliant investment provided it is not obtained via illegal or unethical means, nor used for illegal or unethical purposes.

One should also be mindful to take Islamic finance products (ie Islamic loans and takaful) instead of conventional when purchasing and managing said properties.

#4 – Cryptocurrency

Hold up, some of you might say.

Is cryptocurrency halal investment?

Some types of assets may have conflicting fatwas depending on their usage. For example, there are various fatwas on
cryptocurrencies/ digital assets
, with some fatwa councils in some countries issuing the ‘haram’ ruling, while others giving guidelines on cryptocurrency zakat (thus implying permissibility).

Therefore, fatwas must be taken into context – for example, cryptocurrencies may be viewed as haram if used for overly speculative or risky activities, such as trading with leverage.

If you don’t know what you’re doing – and most people don’t – it’s just borderline gambling and therefore haram.

However, if you keep and treat cryptocurrencies like (digital) gold, then it is permissible
.

#5 – Equity Crowdfunding (ECF)

Ethis Co
 is an equity crowdfunding platform specialising in projects benefitting the ummah.

My personal opinion is this type of investment opportunity is only for Muslims who have reached
financial freedom
 and would like to use their wealth to benefit society.

#6 – P2P Financing

Funding Societies is a peer-to-peer financing platform. Essentially, you gain profit by lending money to SMEs.

As of May 2022,
Funding Societies
 have started offering Shariah-compliant Islamic financing option.

Obligatory
Funding Societies referral link
: Get RM30 when you deposit a minimum of RM1000.

#7 – Other assets

For other assets or investments without the Shariah-compliant label or certification, it is wise to refer back to Islamic Finance guidelines – it’ll tell you
whether the investment fits the Islamic investment criteria by its activities.

According to Bursa Malaysia, companies will be deemed as Shariah non-compliant if they are involved in the following core activities:

Financial services based on
riba
 (interest);

Gaming and gambling;

Manufacture or sale of non-
halal
 products or related products;

Conventional insurance;

Entertainment activities that are non-permissible according to Shariah;

Manufacture or sale of tobacco-based products or related products;

Stock broking or share trading on Shariah non-compliant securities,

and Other activities deemed non-permissible according to Shariah

Halal investments I personally have

My own halal investing portfolio includes:

ASB
 +
ASB loan

Tabung Haji

EPF and PRS for retirement fund

Cryptocurrencies
 (I accumulate most of my
crypto stash for free by working for it
)

Wahed Invest
 – love the US and China ETFs (obligatory referral code – use ‘surbin1’ to get signup RM10 bonus)

Best Invest

Gold
 (I have both digital and jewelry)

MIDF Invest
 – I have the S&P 500 Shariah ETF

(Disclaimer – none of these should be taken as personalised investment advice.)

So which is the Best Shariah Compliant Investments in Malaysia?

You might see all these halal investment options but what you really want to know is… which is the best Shariah compliant investments in Malaysia? Which one(s) should YOU invest in?

I personally invest in a lot of different types of Shariah compliant investments but that’s only due to my work as a personal finance content creator.

You don’t have to do ALL the investments I did – the best halal investing strategy can be as simple as following these 3 Steps:

First, complete Step 1:

Save up 3-6 months’ expenses in ASB, Tabung Haji, and/or Touch n Go Go+

At the same time, open up retirement accounts like EPF and PRS and invest consistently there.

Then, Step 2:

Continue increasing your income and investing consistently in any of the diversified funds (see Category #1). Start with what you can afford – RM100 per month, then increase to RM200, RM300 and so on

Continue until you accumulate six figures. In the meantime, if there is anything else you’re interested to invest in, only allocate 1-5% of your savings to that investment to start*

*This will help you avoid losing (a lot of) money due to inexperience and/or scam, but still allow you the chance to learn and make mistakes (everyone will make mistakes)

Ongoing – Step 3:

Hire a financial planner
 so they can give you personalised investment recommendations and advice

If you’re new to investing, I suggest starting with this article:
3 Best Investments in Malaysia (+ The Best Way to Invest Your Money)
. It tells you which investments to prioritise first and general guidelines before doing risky investments

Any other ways to invest halal in Malaysia?

That should be most of the halal investing options available in Malaysia, for Muslims and our friends. At this point in my life, not ALL of my investments are halal, but most of them are. I’m a work in progress, as we all are.

Are there any other ways to invest halal? Please help me to improve this halal investing article – I’m no Islamic finance expert, just a passionate student. I’m also someone who sins a lot and tries her best to make up for it by writing (hopefully helpful) articles like these.

Thanks for reading. God willing, my pahala points – and yours – will add up 🙂


DividendMagic Taught Me How to Read Financial Statements and Buy Stocks

If you’re into Malaysian stocks, you must have heard of Leigh from
DividendMagic
, the 28-year old financial blogger. Leigh’s investment of choice is dividend investing, and in his blog he freely (and anonymously) share the stocks he keeps (and sells) and how they perform over the years.

I told Leigh how stocks have always been intimidating for me, and asked if he could teach me how to read financial statements so I will know what information to look out for in that long-ass document. He said yes 🙂 With his permission, I’m sharing what I learned with you people too!

Some basic info before we start:

I can be considered a
complete beginner in the stock market
. I don’t follow the news at all. Thus this article is suitable for blur blur people like me too.

Other people may have
different ways of reading financial statements
. We’re not saying this is the right and only way – this is simply one beginner-friendly way.

This article is for people want to do
fundamental analysis
, not technical analysis. (Note: See the difference between the two in #1 at ‘
I just want to invest; what does these investment terms even mean?
‘ article)

Don’t ask us which stocks to buy in Malaysia
. Like seriously just don’t. Both of us have the same principle – we share what we invest in, sure, but we never tell people what they should buy.

“Orait Suraya, just print out the latest annual report of the company you’re interested in,” said Leigh cheerily, “and we go through what BASIC info I personally look out for before I decide to buy the company’s stocks.”

Leigh and I have been friends for a couple of years now and until now it messes with my head how this tattooed fella is a legit certified financial planner. Registered with the Financial Planning Association of Malaysia all.

The company I’ve always been interested in is
 AirAsia Group Berhad
. I went to their website, found ‘Investor Relations’, and downloaded the 2017 Annual Report. (Note: not linking back to AirAsia because I’m not promoting them. They’re just an example here).

AirAsia’s 2017 Annual Report is like 386 pages long. And the cover, woah. If I didn’t know any better, I would have thought they’re an MLM.

“It’s usually not like that…,” said Leigh, “usually annual reports are much shorter… 100 to 200 pages or so… and have old men on the cover or something boring like that.”

Ah ok. AirAsia is just damn extra then. They don’t reflect other public-listed companies. Got it.

How to read financial statement (for Malaysian companies, at least)

In this section, I’m going to cover all the sections in the financial report where Leigh pointed and said ‘that one important.”

I was worried it was going to take long. It didn’t. Excluding our chit-chat, it was like 10-15 mins looking at the report in total?

Here’s what we looked at, in order.

#1 – Key highlights page

“Just have a glance at the company statistics,” said Leigh, “AirAsia nicely turned this section into a visually-pretty infographic, but it’s not always like that.”

It’s important to note that
some statistics are industry-specific
. For example, load factor is super important for the airline industry. The higher it is, the better. I’m guessing this is why they say you should invest in industries you’re familiar with, so you intuitively know what metric and information to look out for.

#2 – 5-Year Financial Highlights

At first, this page intimidated me. I mean, look at the numbers packed in here!

So here’s the most important figures to look at and why.

Some notes:

Note the
industry-specific statistics
 on this page. They are important too. In this case, for airline industry, increase in passengers carried and load factor are considered good

‘
Restated
’ (see under 2016) means last time maybe got material inaccuracy and this data is the correct version

Most times, you
won’t
 get a company financial report that show everything is perfect one. As long as most are good (ie whatever that should increase, increased), then the company have potential. Case in point: AirAsia recorded -RM908 million negative cash flow in 2016, but it was due to its financing activities.

#3 -Look for these ‘statements’

Statement of profit and loss
. I think in this particular case, it’s unique because AA just incorporated in August 2017 and that’s why it has a net loss of RM6.336 billion? I mean most other metric record increase in growth and revenue so that much loss doesn’t make sense..

Income statement
 – Just kinda have a look at their revenue, what they spend on, and how they calculate their ‘net profit’ total.

Statement of financial position
 – check ‘liquidity ratio’, ie do they have enough money to pay their debtors if all ask at the same time. Calculation: net current liabilities divided by assets.

In AirAsia’s case, it’s in the negative. That’s not good actually.

What to do after reading financial statement

If you liked what you read, buy the stocks. DividendMagic has a comprehensive guide
here
.

If you don’t like what you read, don’t buy it. Pick up another financial statement and do the above simple analysis all over again. Over time you’ll understand a bit more and a bit more until you expert.

I was curious about
when
to buy the stocks, so I asked Leigh if we should wait until the price is ‘right’. Leigh said:

If the fundamentals are good and it just so happen that the price is negatively affected due to temporary bad PR or other factors (CEO died or something), get it like NOW. Usually the price will increase again soon (but not always!)

If fundamentals are good and we’re not sure if the price is going up or down, then if you want it, just get it because the price really could go either way. If you wait too long, you may not act. The slower you act, the less you get hands-on learning, the actual process that makes you a better investor. Remember to always stay invested.

Other stocks-related questions

I asked Leigh what’s his usual
process of picking stocks
. He shrugged and simply said he buys stocks of companies that offer products / services that its customers generally cannot live without and use on a daily basis.. If you look at
his portfolio
, he has a combination of company stocks, from banking to food to property.

How many different types of stocks
 should one have, I asked. Maybe stocks from around 5 or 6 companies to start?, Leigh said. Diversify a bit. No max, but maybe cap at around 20 because the more you have, the harder it is to keep track and update your portfolio.

What’s your
routine
 like with stocks, I asked? I log in my trading app occasionally to review prices, maybe once a week, Leigh said. And then really delving into companies if a particular share is doing extraordinarily well or badly. I also read The Edge to keep up with recent updates.

I shared with Leigh my plan to pick stocks – go with process of elimination. First, eliminate all the non-syariah companies. Then look through the remaining companies and see if I’m familiar with their industry enough. If yes, I’ll take a stab at reading their financial statements. If they look good, I’ll consider buying their stocks.

Can also, Leigh said.

(Side note: you think Bumi and Muslim people get many privileges in this country. But it also eliminated a lot of our investing options! I can never invest in Genting boooo)

Why choose stocks as investment, though?

I mean, you can just get mutual funds or unit trusts, right? They are comprised of individual stocks, usually across different industries for diversification

BUT
mutual funds and unit trust charge fees. Some pretty low at 0.35% (ASB), some pretty high at 3% or more.

SO..
 by picking your own stocks, you’re avoiding those fees. It can add up to quite a lot. Read up DividendMagic’s calculations in his
That 1% Fee Impact – Mutual Funds vs Investing on your own
 article.

(note: stocks is not fee-free either. There are charges when buying/selling them).

But fund managers are smart people, I hear some of you protest. You’re paying them the fee for their ability to pick good stocks!

Here I have to let you know that actually
 fund managers don’t necessarily make the best stock picks
, despite all the jargon they spew out. In fact,
random stock picks may perform better
 (source:
this Nasdaq article
). I’ve also heard the story about the monkeys choosing stock picks by throwing darts and even those outperformed picks by fund managers?

So, like, I guess I feel intimidated over stocks over nothing? All the hard language they use, all those people in powersuits… doesn’t make a difference? Makes you wonder what else the financial industry makes you feel inferior about (even though it’s probably unintentional on their end).

Personal opinion. Feel free to give your counter-arguments in the comments section 🙂


What to Invest with RM1000: 15 Options You Should Know

So you are new at investing, and wondering what you could invest with RM1000 that you’ve finally, painfully saved up.

That is not an insignificant amount to you. Truthfully, even though you’ve been told ‘investing is important!’ and ‘you should invest early!’, you’re afraid.

There are two types of fear here, and they compound each other. One is the fear of losing money, which is understandable. The second is the fear of playing it too safe and NOT maximising profit potential!

It’s ok, I’ve been there, I’ve felt the nerves you’re experiencing. Here are some suggestions on where and what you can invest with RM1000, written for beginners in mind. Disclaimer: Not financial advice.

First off – Pay off debt

Before you start investing, take note of what you owe first.
Credit cards, bank loans, and other high-interest loans
 charging 8% or so in annual interest MUST be paid off first.

Why? Because if you skip this step, whatever profit you get from your investments goes straight into paying off those interest instead of padding your pocket. If your investment return is less than your debt, you’re even making nett loss!
No point in investing like that.

No bad debt? Good. Go on to the next line.

Related:
Explaining Snowball Method, The Best Way to Pay Off Debt

#1 – Invest with RM1000: Practical Mode

If you want to be really practical about it, you can prioritise these investments:

EPF
 (Employees Provident Fund aka KWSP) – for retirement
PRS
 (Private Retirement Scheme aka kinda like optional, secondary EPF) – for retirement
SSPN/SSPN-i
 (education fund for your children) – for children’s education

Read more about these investment options in:
3 Most Practical Investments in Malaysia (Prioritise These Over Others

These are the most ‘practical’ investments to make, even if they’re not particularly exciting. You’ll need the money in the long term anyway so might as well start now. You get tax relief and other benefits too.

The only downside for these investments is you CANNOT withdraw and use the funds before retirement/for its intended purposes.  If that’s important for you, then consider…

#2 – Invest with RM1000: Emergency savings

Unlike #1, these options does NOT ‘lock’ your money – you can withdraw them anytime. This is a good option if you want to grow your savings while studying other investment options in #3. They are easy to understand and have minimal maintenance – just deposit and get on with your life.

ASB/Tabung Haji
High-interest savings Account
Fixed deposit/cash management portfolio
 (ok FD does lock your money for the short term, so the latter is better)
Gold
Foreign currencies

Read more in:
5 Best Places to Save Money in Malaysia, Ranked

By this point, you have easily used up your RM1000 allocation – it’s not uncommon for people to save up six, seven-figure amounts in the options in #1 and #2 alone. Personally, I would divide my first RM1000 into 2, 3 or even 4 different ones, just to learn by doing.

#3 – Invest with RM1000: Diversification mode

It’s been a few months/years since you worked on increasing your savings in #1 and/or #2. And you’re thinking of yourself – now that my ‘safe’ investments are sorted out, maybe I should use some (not all!) to diversify into other investments. What other options are out there?

Lots. Too many, perhaps. Let’s see..

There are
roboadvisor
 platforms (a great place to start tbh)
Best Robo Advisor in Malaysia: Lowest Fees, Syariah-Compliant, Global Exposure and More

There are individual unit trusts, some of which you could get under
EPF i-Invest

[SPONSORED] All You Need to Know About Buying Unit Trust Through EPF i-Invest

There are
stocks

7 BEST Articles to Read Before You Jump into Stocks Investing in Malaysia

There are
cryptocurrencies

How to Buy Cryptocurrencies in Malaysia [2021 Guide]

There are real estate investment trusts aka
REITs

5 Things I Learned About REITs in Malaysia (From a Bursa Malaysia-Sponsored Workshop)

There are
warrants
 (do stocks first)
[SPONSORED] The Beginners Guide to Warrants in Malaysia

There are
p2p lending

[SPONSORED] I Asked Hard Questions to the CEO of Funding Societies Malaysia

Which one to pick from #3?
Follow your curiosity.
 If you’re like most people, you will have a natural interest in one or more options, so you’ll start your exploration there. For example, stocks appeal to people who like keeping up with news about what big companies do. That’s already a ridiculously big world to explore.

Personally, I don’t care about stocks and properties, so I don’t even bother with them. I absolutely love cryptocurrencies and roboadvisors, so those are my picks. You can see my portfolio breakdown here:
Breakdown of My (SUPER HIGH RISK) Investment Portfolio

Important: you don’t have to rush #3. It’s good to just take your time learning as much as you can, without making rash decisions.

Conclusion

So, what will you do? What will you invest with RM1000 (or more) that you have?

As mentioned, start with #1 and #2, then slowly introduce #3 into your life. In any case, the key is to START, then learn as you go along.

Hope this helps anyone looking to start investing their first RM1000. Questions? Give em here or comment via FB, Twitter, etc 🙂

P/s – Have you gotten insurance? It’s not strictly an investment, yes, but I argue the best offense is useless without a good defence. It’s like putting all attack-type players in your party with no healers – bad idea. Read my insurance article:
9 Things You MUST Know Before Buying Insurance in Malaysia


6 Things to Know When You’re Investing for the First Time

The other day, someone wrote to me. She asked, ‘Suraya, can you do a post about
getting over one’s nerves when investing for the first time?
‘

This person has saved up some money but found it difficult to proceed to the next step – actually starting with the investment. She doesn’t have any high-interest debt. She knows that she will have to invest her money for her future, but how can she be ‘sure’ of her investment choice, she asked?

Investing for the first time, the checklist

This post is not about the ‘process’ side of investment. She knows very well how to open investment accounts, how to research different investment types, how to use online tools. It’s the ‘being sure’ side that she wants to know.

So I told her I’ll write about what works for me, and the steps that I go through when I add a new type of investment into my portfolio. Hope this will help everyone else.

Disclaimer: I’m not a certified financial planner or anything. Take this article with a pinch of salt, and ask other people more knowledgeable about this. If anything is wrong, please let me know by commenting.

#1 – You checked for red flags. It’s not there.

The first line of defense when considering every new investment opportunity is making sure it’s not an investment scam. I wrote about identifying these in the article
How to spot investments that are actually investment scams.

Note that sometimes it’s not the investment type, but the
company
 offering it that is scammy. If the investments you’re considering tick any of these boxes, you need to reconsider.

Multiple hits from Google search when you type ‘Company name + scam’

Any variation of ‘guaranteed return of investment’ or ‘daily/weekly/monthly profit’. If the company promises this, run.

The company’s founders and/or management team was involved with some dodgy things in the past.

Any mention of recruiting investors under you. That’s a sign of MLM, or worse Ponzi schemes

Know for sure that the company is reputable and legit? Awesome, let’s move on.

#2 – You are comfortable with the investment’s risk level

Investments are not created equal (you already know this). Some of them are truly safe; you know with a degree of certainty that you won’t ever lose your money, like fixed deposits. Some of them have higher risks and can possibly make you lose (a portion of) your initial investment amount.

Simplistically,

If you are
investing for the first time
, choose a safe investment first. The learning process will prepare you for the higher-risk investments. Safe investments should be boring; usually just do one time and forget about it. For the record, I’d consider the following as safe investments: fixed deposits, low-fee unit trusts/mutual funds, blue chip stocks, ASB and similar.

If you
already have mostly safe investments
, consider medium or higher risk investments that you have an interest in. Many factors will affect the return on investment – you want to make sure that you have the mental capacity to be at least mildly excited about news updates and make adjustments to your portfolio when needed.

My first ever investment was ASB. That was boring; go to the office, create an account, transfer the minimum amount, then periodically add more money to it via online banking. Find out the dividends announcement once a year, and if I’m not lazy I’d go to the post office to update the accounts book so I can grin at my new balance.

(Technically, my first investment was EPF. That one more boring and mandatory anyway, so I won’t count it)

My second investment was
gold
, if I remember correctly. Still considered a safe investment, but in recent years it’s a bit more volatile so I’d rate this as medium risk. I still keep gold now and once in a while I check back that it’s still performing okay. If it the value drastically goes up or down, I’d consider selling or buying more gold. The fancy phrase for this process is ‘rebalancing your investment portfolio’.

Higher-risk investments tend to have higher returns on investment, but only if you can stomach the risk. This brings me to…

#3 – Your risky investments = the amount you can afford to lose

I’m still young, so I can afford to take higher risks at this stage in life. For example, I keep more than 50% of my money in high-risk investments (
bitcoin
 and
cryptocurrencies
). I’m aware I can lose that 50% very fast if the market decides to turn against me (touch freaking wood).

However, I know I can afford to lose that amount if shit hits the fan. If that happens, I will work my ass off and earn back the money through active income (ie my day job). Time is on my side.

If say my safe investment: risky investment ratio tips over to 10:90.
I am not okay with this. I do not want to potentially lose 90% of my money
. So I turn back some of the bitcoin to MYR and channel it back to safe and medium-risk investments. I’d say 50% or more in high-risk investment is my max.

The ratio is different for everyone. Men tend to take higher risks, so take note – this can be your downfall. As a general rule, the younger you are, the higher your risk tolerance, because you can still recoup the lost money by working for it.

However, I also know some young people who are
not comfortable with high risk
. Maybe they are breadwinners of their families and don’t want to jeopardise their family’s future with their investment choices. That’s fine too. Keeping most of your money in something safe-ish like mutual funds that average 7-8% per year is also a good investment strategy.

If you’re young but not sure which higher-risk investment to go with, it’s also okay to start with 100% safe investments and slowly introduce small amounts of higher risk investments to diversify when you’re ready. The point is to start 🙂

#4 – You know, more or less, when you need the money

Some investments really lock in your money; you can’t access it in the near future. For example:

Property
. Reselling properties in the first five years after purchase got high tax one, many people avoid unless they plan to live there long term.

Anything retirement-related like EPF and PRS
 (
Private Retirement Scheme
). Can only access after you retire.

Anything with time-based contracts like fixed deposits and peer-to-peer lending
. You commit to only getting back your money after the contract ends.

‘Locking in’ your investment is not necessarily a bad thing. Sure you can’t access it, but you also won’t be tempted to spend it or sell your investments for a loss. It’s good for people who have a spending problem or tend to make impulse decisions. However if you plan to migrate soon or have plans for the money before its ‘unlocked’ to you, then I don’t recommend these types of investments.

If accessing the investment money is important to you, then pick something that can be easily liquidified, aka turned back to MYR relatively fast. Some which are fast includes:

Stocks
. Mind the fees. See #5

Non-retirement-earmarked unit trusts and mutual funds
. Mind the fees. See #5

Cryptocurrencies
. Mind the scammers.

Currencies and Gold
. Mind the spread. See #5

And more.

Note that you can either make a profit or a loss on the above, but hey they are some of the options available if you value access to your investment money, fast. ‘Fast’ here ranges from minutes to days. For my amateur writeup on different types of investments available in Malaysia, see
What can you invest with RM1000?; A quick guide.

#5 – You note the fees and spread (and choose low-fee and low-spread options where possible)

ALL private investment platforms will have fees. The ones that say they don’t will have higher spreads aka indirect fees. The only investment platforms without fees that I can think of is some government-linked mutual funds like ASB and Tabung Haji.

On fees

I’m not the biggest fan of fees but I guess I have to suck it because employees need to be paid somehow right. But the rule of thumb is, the lower the fees, the better.

For Private Retirement Scheme offering retirement-earmarked unit trust, I went with FundSupermart. Just 1% management fee from them. I’ve heard some unit trust providers charge
up to 6% fee
, crazy! Even if you get 10% annual return on investment from them, you only get 4% in profit after all those fees!

Another thing that needs an attention to fees: stocks and REITs. They need CDS accounts, and there are a few companies offering these accounts with differing fee structures. DividendMagic nicely compiled the rates in
here
.

Related:

5 Things I Learned About REITs in Malaysia (From a Bursa Malaysia-Sponsored Workshop)

On spreads

Let’s use gold to explain spread. Let’s say a legit company offers you to buy/sell gold on their platform. They sell it for RM150 per gram of gold (example), and buy it back from you for RM145 per gram of gold (example) on the same day. That RM5 difference translates to 3.45% spread, or how much profit the company earns when they resell the gold that you sold to them.

Ideally, you want the spread to be as low as possible. However, it’s okay to pick a gold investment company with reasonable spread (not necessarily the lowest) if they are reputable and can guarantee safekeeping and quality of your gold. The same applies to other investments that use spread, like currencies. You do NOT want your investment to disappear along with the company one fine day. Nuh uh.

#6 – You accept the responsibilities of a DIY investor

DIY investing is an investment style that doesn’t involve a fund manager. Many people start with this option – they make their own choices on what to invest in, after doing self-research and careful deliberation. I’ve yet to come across someone (online and offline) who uses a fund manager, to be honest. I think they’re more for the HNW/UHNW (high net worth/ultra high net worth) individuals, but you can let me know if I’m wrong.

DIY investing means that:

You get to choose your own investments.
Fun! See:
12 Types of Investment Available in Malaysia and The People Who Have Them

You have to keep track of all your investment accounts, including the security side.
 Enhance your security with these
digital security tips
.

You decide how often you want to contribute to your investments
. You can automate this and set up auto-monthly deductions. You can also take advantage of taxes and stuff – for example, I will contribute at least RM3000 to PRS every year because that will give me tax relief.

You balance your portfolio yourself.
 This means checking your investment portfolio at least once a year and make sure you’re still comfortable with the risk level, and move the funds around as needed.

Personally, I use an app and a notebook to list down all my investments, the amounts and the percentages. For example, I have:

ASB, RMxx, xx% (low risk)

EPF, RMxx, xx% (low risk)

PRS, RMxx, xx% (low risk)

Gold, RMxx, xx% (medium risk)

Bitcoin, RMxx, xx% (high risk)

Again, when the last two combined make up more than 50%, I get nervous and make the appropriate adjustments.

In some Western countries,
robo-advisors
 are getting more common. They ask you a bunch of questions, and from there make investment recommendations for you, much like a fund manager. I believe no robo-advisors serve the Malaysian market yet, but I know that Securities Commission already have a framework for it and I look forward to trying it out when it’s available.

Conclusion

The above is pretty much a rough guideline for you guys who:

Are investing for the first time, and having anxiety over it

Need a checklist before committing to a new investment

There are other things to know. The timing of the investment (ooooh, tricky), the fair value of the investment choice (there’s calculations for stocks and stuff, to avoid buying overvalued stocks), and some others.
You can slowly learn about these, but don’t let it stop you from investing in safe investments first
. Time is the key ingredient that will make you money, so don’t waste too much time waiting to ‘know everything’. There’s no such thing.

I highly suggest subscribing to
Investopedia’s
 newsletters. They send over easy-to-understand materials about various types of investments. You can also read my
‘I just want to invest; what does these investment terms even mean?’
 article.

Did I miss anything important? Do you have additional questions? Any wrong or misleading info in here? Do comment, would love to hear from you. If this article helped, please share 🙂


What No One Tells You About Investing in Malaysia

Here are some of the things you always hear about investing: it’s important, you should do it early, and you shouldn’t put all your money in just one basket (one type of investment vehicle).

I’m not going to focus on that here. This article is all about what people
don’t
 tell you about investing in Malaysia. Or not enough, anyway.

Let’s start. If anything is inaccurate, let me know and I’ll edit.

#1 – It’s boring

After the initial excitement (depending on your character, tbh), all you have to do is wait. And review back occasionally, just in case it’s not going in the direction you’re hoping for.

When this happens, what you do is re-allocate your investment. Move the money around, see if other investment options make more sense to your situation. For example, if most of your investment is risky, you might want to move some of the money in there to safer options.

You can find out what’s generally considered low-risk, medium-risk and high-risk in this article:
What can you invest with RM1000? A quick guide

So yeah, most of the time you do nothing.

#2 – There are investing styles

There are two main ones: passive and active investing. Active investors, if they’ve read this far, would have already disagreed with Point #1 lol.

Active investors act as their own portfolio managers and always look for ways to beat the market, and take bigger risks.

Depending on their abilities, some of those risks might pay off. They analyse documents and information a lot, look for tiny nuggets of information that most people miss, and hope that their ‘if x, then y’ conclusion is correct.

I won’t say which style is better than the other, because that really depends on the individual’s skills and luck, but I can say that I personally prefer passive investing because I have other shit to do than read those boring financial papers. Note: boring is subjective – if you enjoy it, good for you fam. Rock on.

For further reading on this topic, check out
this Investopedia article
.

You can read my article about
passive investment options available in Malaysia
 here.

#3 – There are old and new types of investments

The old types of investment – okay maybe won’t call them old, let’s call them
established
 instead – stood the test of time. They have history; ‘this is what my parents, grandparents and great-grandparents invested in’ kinda investments. They include stocks, gold, property, la di da.

Newer types of investments can be broken down in further two categories: the ones that are completely new (cryptocurrencies, for example), and the ones that use technology to make investing in the
old
 established investments more user-friendly and efficient. Summed up in a word;
fintech
.

Fintech covers a whole load of stuff, and we won’t go into detail here, but here how they are related to investing specifically:

Robo-advisory
 figures out your profile and risk aversion, then recommends mutual funds suitable for you (in early stages in Malaysia)

P2P lending
 connects lenders to borrowers. Lenders get paid their capital plus interest when the borrower pays up by the end of the term (if they don’t default ie run away with your money)

Equity crowdfunding
 allows investors buy into small businesses with the potential of becoming huge

Cryptocurrencies
 is a completely new type of store of value. Note: super risky

Then there are websites and apps that educate and/or makes it super easy for you to buy traditional investments like gold (like
HelloGold
), stocks and mutual funds (Fundsupermart)

Not surprisingly, tech-savvy individuals are receptive to fintech companies.

#4 – There are Syariah and non-Syariah options

I think we take this for granted in Malaysia. There are platforms here that allow you to filter mutual funds by its Syariah status, or at least make it easy for you to find the information.

Malaysia is one of the top Islamic Finance capitals of the world – something we should be proud of! Many popular investment options come as Syariah-compliant as default (ie ASB).

There are Islamic ETFs, Islamic REITs, Sukuk (bonds), stocks from Syariah-compliant public-listed companies – list goes on. For more info, see my
Islamic investments in Malaysia
article.

Sometimes and briefly, I get jealous of my non-Muslim friends over the wider options they have. But on the flip side, I don’t have to do as much research on the ones I can’t have, so that’s good I guess, less analysis paralysis. Plus, more pahala points for me.

#5 – How investing kinda sorta works

As far as I know, all types of investment generally fall into one of these categories

Buy low, sell high (capital appreciation) – currencies, properties, stocks, collectables

Buy and as long as you keep, you get bonus (dividend yield) – mutual funds, unit trust, FD, REITs, properties

Some types of investments may overlap. For example, properties can be both. If you buy low and sell high, that’s capital appreciation. If you buy and rent it out, that’s like dividend yield. Stocks can be both, and so can cryptocurrencies.

It took me a long time to realise this :/

#6 – Your personality influences your investment preference a lot

Like, seriously. It does. Your likes and dislikes, your habits, your behavioural tendencies – they all factor into your choice of investment vehicle.

Like, I know that I’m
lazy
 resource-conscious and defensive of my free time. So my investment style is mostly passive. Sit and wait. While I enjoy life. I also like technology and the novelty it brings, not just to the finance world. So I like fintech products.

I covered this topic a bit more in full in the
12 Types of Investment Available in Malaysia and The People Who Have Them
 article.

One of the more dangerous behavioural types is the ‘instant gratification’ type. Ie people who want high returns on their investment, fast. It’s best to outgrow that one. If not your future very pain.

#7 – Who to trust when it comes to investment advice

Yo, Millennials, we’re a sceptical lot. We know – or learned the hard way – that some investment advice is bad. Only slightly more than third of us (37%) sought professional advice.

When we do, we ask for advice on savings and investments (56%), advice on mortgages or loans (41%), retirement planning (32%) and debt counselling (22%). Source:
This Asian Institute of Finance publication about Malaysian Gen Y and Money

When we are asked why we don’t get professional advice, we say we prefer to do it on our own.

According to the same publication, it’s not because we’re sombong, it’s more that we distrust financial institutions and agencies.

The exact wording was ‘The level of distrust is
alarming
 for financial institutions and agencies/associations and is
consistent with the populous view of the sector post the financial crisis
. Such an environment has led to a distrust of financial advisors.’

So okay, if we distrust financial institutions, who do we trust then? You wanna comment on this? Who do you trust? Give me specific organisations or names. I want to online-stalk them.

#8 – You CAN invest in investment products offered in other countries!

You don’t have to stick to Malaysian market. Go to US, Singapore, Hong Kong, China, other regions.

For example, you can invest in US stock market easily via MIDF Invest: Read
[SPONSORED] MIDF Invest Review: Buy US Stocks and ETFs from Malaysia Directly, Securely and Cheaply

Lastly

What are some other things about investing that you figured out on your own? Super curious about this. Please let me know! I love hearing people’s finance-related ‘aha’ moments.

As always, if you liked this article, share it around 🙂


13 Investment Terms that Beginners MUST Know

Investment is such a loaded word. I guess you can say it’s similar to the word ‘science’. If you’re not from that world, it will probably confuse you in the beginning. It’s like, you need A to understand B to understand C to understand D.

This is one of the reasons why beginners find investing intimidating, at first. So this is my attempt to explain them. I’ll be covering: Technical analysis, fundamental analysis, hedge, arbitrage, ROI, equity, options, futures, IPO, bull and bear market, and pump-and-dump.

Disclaimer: not a financial expert. If any of my personal understanding below is wrong, please comment and I’ll edit.

#1 – Technical Analysis (TA) / Fundamental Analysis (FA)

The analysis people use in making an investing decision. An investor usually favours one over the other. By default, most of us probably start out with Fundamental Analysis, and later on, may dabble with Technical Analysis.

Fundamental analysis
 is for people who make investment decisions based on what they learn from current events, news and updates. A bit of applied macroeconomics, FA is when you take into account the bigger picture. Usually for long-term investing decisions, you consider the who what why when and how.

FA can be used for all, if not most types of investments. For example, stocks. A good investor doesn’t just blindly buy, they’d consider:

Is the company sound? Do they have good management? Do they have a large amount of debt?
Will the current economic climate support their growth? Any world events that might form a threat to its growth? If yes, how likely is that to happen?
What is the market demand, and will it grow? How?
And more.

You can read my
DividendMagic Taught Me How to Read Financial Statements and Buy Stocks
 article for more info 🙂

Technical analysis
, on the other hand, is for (1) people who is not intimidated by numbers, graphs and charts and (2) people who prefer short-term trading (hours and days as opposed to months or years).

There are equations that they can use to calculate and predict whether the stock/commodity/currency/similar will go up or down in value, and by how much. None of them are conclusive, just an indication.

TA is maths and patterns. To a certain degree,
 what is being traded doesn’t matter, the profit potential does
.  It is very popular among traders, whether
forex
,
warrants
 or even in the
stocks market
.

TA is an easy skill to learn, but difficult to master. Mistakes can be very costly, because leveraging is common. Leveraging is when the platform allows you to make bigger trades than what you actually have in your account.

How leveraging works: Say I have $100, and the platform allows 1:10 leveraging, this means I can make a $1000 trade. If my ‘prediction’ is accurate, I’ll get a huge reward for my risk. But if I’m wrong, likewise.

Important: NO TRADER WORTH THEIR SALT WILL SAY THEY ARE RIGHT IN 100% OF THEIR TRADES.  Learn more about how ACTUAL traders trade in:
I Interviewed A Professional Trader from a Malaysian Investment Bank
 article.

EDIT: TA can be used as a long-term trading tool too. An example given is the
Kondratieff Wave
 which can be used to predict economic booms and recessions. Credit goes to Robin Lee of
HelloGold

#2 – Hedge / Hedging

“How do I protect the value of my wealth in case my country’s currency drops?” <— how people usually start thinking about hedging.

Everyone lives somewhere and need fiat (government-issued money) to buy stuff and live. Hedging is when you convert a part of that money in another store of value – another currency is common – to protect or increase the value of the money.

People usually factor in liquidity – how easily they can be converted back to their own money. Therefore, gold (and silver) and currencies (USD, GBP, EUR, crypto), among others are popular options.

Credit: IRunTheInternet.com

#3 – Arbitrage

Buy low, sell high at its finest. This is when a trader takes advantage of different prices in different markets, so they buy low in X and sell high in Y. It’s used when trading commodities, securities and currencies.

Commodities: raw material or agricultural product. Examples are palm oil and copper.
Securities: Things that mean you ‘own’ a part of a company or institution. Examples are stocks and bonds.
Currencies: Examples are fiat currencies (MYR, USD, GBP) and cryptocurrencies

As an analogy, think of it like this – I buy 1000 TVs in Malaysia at RM1000 each. I know that I can sell it for RM1300 each in Russia or whatever. I sell it and make RM300k on the difference in price.

People are usually secretive about arbitrage opportunities as they want to keep the advantage to themselves. If other people find out, they’d do the same and the extra supply will push down the price, lowering the profit potential.

 #4 – ROI (Return on investment) and Compounding

The investment term ROI or return on investment simply means – how much you get back on the money you put in. It’s calculated in percentage.

For example, you purchased RM1000 worth of stocks in Company X. It performed well and a year later, the value of your stocks is now RM1100. Your ROI for this investment is therefore 10%. ROI is a very common term and can be used for all types of investments.

Compounding, on the other hand, is when the RM100 profit from the example above generates more profit the following year. It’s kinda like,

In numbers, assuming the investment generates 10% every single year (impossible scenario lol, but let’s use it as an example anyway), it’ll look like this:

Year
Amount, compounded
Amount, if NOT compounded
0
1000
1
RM1100
2
RM1210
RM1200
3
RM1331
RM1300
4
RM1464.10
RM1400
5
RM1610.51
RM1500
6
RM1771.56
RM1600
7
RM1948.72
RM1700
8
RM2143.59
RM1800
9
RM2357.95
RM1900
10
RM2593.74
RM2000

Do you see why compounding is the bombz!

The good thing is, if you’re invested in
EPF, PRS, SSPN
,
robo advisors
,
mutual funds like ASB
 and putting in money every month and never (as much as possible) take out the money, you’re already doing ‘compounding’ 🙂

#5 – Equity

Equity means different things in different contexts. But as an investing term, you can think of it as something like, ‘ownership’.

 The ‘equity market’ is somewhat synonymous with company shares in the stocks market, but there are other types of equities too. For more examples, see this
Investopedia article on equity
.

#6 – Options and Futures

So trading is, in simple terms, buying and selling. By default, the buying and selling is assumed to happen in real time but what if the trade happens upon meeting conditions, or in the future? That’s where Options and Futures comes in.

Options
 is when the buyer gives the seller the opportunity to make the purchase at X price for a specific time frame.
Futures
 is similar, but for X price at a later date.

To learn Options and Futures in more detail, you usually have to have an intermediate or expert grasp in the stock market, it’s quite advanced stuff and carries more risk.

But honestly? You don’t
need
 to know in depth about Options and Futures, it doesn’t make you a better investor or anything. The compounding strategy in #4 is good enough (and recommended for most people tbh).

#7 – IPO

IPO stands for
Initial Public Offering
.  It is the first time a
private company
 offers its shares to the public, and it is a regulated process. The funds raised is meant to expand and scale the company (or pay debt, or… read the documents, they will list it out).

People are excited about new IPOs because in many cases (but not always!), if they’re popular/solid company, the ROI can be quite good when they launch. For this reason, IPO launches attract a lot of attention and is considered newsworthy.

IPO strategy is an investment strategy that is medium risk. It does need a fair amount of capital but basically how it works is (1) apply to buy IPO before listing (success rate very low; Bumi folks get 2 chances to apply) and (2) sell the minute market opens (profit is NOT guaranteed but historically in your favour)

You also need luck. Depending on the company, the success rate of getting IPOs before launch is under 10% for us regular folks (retails investors).

Of course, there are a lot of nuances and in-depth info and tips. Do you want a separate post on IPO strategy? Let me know, no point write if no demand 🙂

#8 – Bull and Bear Market

A way to describe if the market (stocks, usually) is unusually good or unusually bad.

Bull market
 is when the overall stock prices go up in value (how to remember – bulls use horns to
lift up
their opponents) while
bear market
 is when the overall stock prices go down in value (how to remember – bears
 take down
 their opponents).

Bull statues are common in financial districts. The Wall Street in New York have a famous one, and closer to home you can find one at Bursa Malaysia.

Bear markets are not necessarily bad. Some people wait for bear markets to buy stocks in good companies at a cheaper price, in preparation for the next bull run. No one is really sure which point they are in during bull or bear markets; analysts might make predictions, and often experts will contradict each other.

#9 – Pump-and-dump

Pump-and-dump describes a situation where the value of a financial instrument (stocks, etc) is
artificially inflated
, then nosedives, fast. The people who do it or can identity it will sell off their shares/ownership while the ones who were caught unaware will be left with worthless stocks.

Pump-and-dump are really dangerous, which is why there are regulations in place to stop this from happening. Howevr, in unregulated spaces like
DeFi
, a lot of people have lost money.

How does it work?

Unethical people hype up and promote the ‘investment’, with false positive statements.
A lot of people buy in, hoping to make 1000% ROI or whatever
At its peak price, the same unethical people will cash out and deplete all the value, thus making the remaining shares worthless.

This is why you have to be very careful with anything hyped up in the investment world. Research the company you want to buy into and make sure none of the people affiliated have history in pumping and dumping.

EVEN IF you want to join, NEVER go all-in, never use 100% of your money. If you want,
maybe
 1%, max. That way you get to scratch your gambling itch (let’s call it what it is) and even if you lose it all, you still have 99% of your money.

What other investment terms do you want to know?

What other investment terms do you want to know, aside from the above? Put in the comments section, I’ll add on to and improve this list 🙂

I also want to say here that there are no stupid questions – all beginners have to start somewhere. Ask me anything; even if I can’t answer maybe other people can.


3 Investments I Want To Try (But Haven’t)

Here are some types of investments that I have: mutual funds/unit trust, gold and crypto.

This article is all about investments I
don’t
 have yet, but always been curious to try. I may or may not proceed with one or any of them in the future. It’s just to show you what I’ve done about them so far, and why I didn’t proceed with them yet.

#1 – ETFs (Exchange-Traded Funds)

I’ve heard really good things about ETFs. How they tend to be low in fees, how they’re fairly low-risk, how they’re the passive investment of choice for many in the financial circles.

The ONLY reason why I haven’t invested in ETFs yet is because I’m still waiting for a fintech roboadvisory company to offer Syariah-compliant ETFs. Too lazy to go through Bursa.

EDIT: This article was originally written in 2018. Since then, many roboadvisors and platforms to buy ETFs are available for Malaysians. See how to get them at:

Which is the Best Robo Advisor in Malaysia? Ultimate Comparison Guide

MIDF Invest Review: Buy US Stocks and ETFs from Malaysia Directly, Securely and Cheaply

#2 – Properties

Specifically, I want to make money from properties via two methods: REITs and rental units

For
REITs
, I’m sort of interested, but just not that passionate about them. If you are interested in REITs, see my
5 Things I Learned About REITs in Malaysia (From a Bursa Malaysia-Sponsored Workshop)
 article.

Rental units
, on the other hand, is something I have more passion for. I’ve always had this idea of buying a multi-room property, live in one of those units, then rent out the rest.

It’ll solve both (1) my accommodation and (2) passive income strategy. Usually, when you buy property, you have to pick one or the other – for own stay or for investment. I thought this kind of solution, in theory at least, can be a ‘best-of-both-worlds’-type of solution.

I got the idea from a chap called Alan Corey in his book,
A Million Bucks By 30: How to Overcome A Crap Job, Stingy Parents, and A Useless Degree to Become A Millionaire Before (or After) Turning Thirty
. He bought a big house, lived in the smallest room, and rented out the rest.

There are lots of trade-offs for this strategy, though. Summarised in two words, tenancy woes. Living with other people can be frustrating, to say the least. How much do I want to sacrifice my quality of life, privacy and landlady-related headaches in exchange for the money?

A possible solution is complete boundaries between myself and my tenants. Different entrances, living areas, bathrooms, kitchens, the works. But that sounds expensive – that’s already considered an apartment unit, and hell I don’t have money to buy a whole apartment unit!

So until I see a property in my budget range that can work for this kind of situation, the search continues.

#3 – Equity Crowdfunding (ECF)

Have you watched Shark Tank? That’s kind of how equity crowdfunding works, except the investors are a bunch more people instead of individual ‘sharks’.

At time of writing, there are seven licensed equity crowdfunding platforms in Malaysia (
list in Securities Commission website
). I’ve been tempted to put my money in various companies many, many times. Especially startups which I thought was brilliant, like
Me.Reka Makerspace
.

What’s stopping me? Simple. I don’t want to over-allocate high-risk investments in my portfolio. I
hold
 hodl cryptocurrencies. The wild volatility already gives me anxiety. It takes all my willpower to not cave in and sell everything, especially during bear markets.

Anyhow. I’m planning to keep my crypto holdings for at least a few more years. This could be my best investment decision, or the worst, let’s see. If it turns out well, I’ll re-diversify and consider investing in startups.

Last thoughts about investments I want to try

There are some investments I’m absolutely not interested in, like
art
 (collectibles in general),
foreign exchange
 (USD/EUR/etc money), and individual
Malaysian stocks
.

I’m not saying they’re bad investments, I’m saying I don’t enjoy them and therefore won’t be motivated to research them, which is not a good trait to have as an investor for those types of investments.

How about you? What investments:

Do you have?

Do you want to try?

You are NOT interested in?

Share with us in the comments section!