Unit trust as an investing instruments

I told myself I must record down this in FPM blog. A reader, nicknamed "INVESTOR" commented on unit trust investment in today's The Star Comment column, Page 33. He wrote in response to the earlier two comments by K.K. Lee "Good returns from unit trust investment" (The Star Oct 13) and Ho's "Trust fund lost after investment started shrinking" (The Star, Oct 11).

He responded to K.K.Lee's touting of unit trust as mid to long term investment vehicle that bring higher return, "The contradiction is clear. Had Lee not redeemed his investment in early 2000, he would have suffered the same fate as Ho. Had his agent advised otherwise and had Lee held on to his investment, he would probably have also ended up poorer."

He wrote, "Unit trust investment is not the magical vehicle for long-term investment as most people have been led to believe. It is just another market instrument that is also subject to the ups and downs, as ultimately the collected funds are ploughed back into the equity or bond markets."

It is good to know there are still many people in Malaysia able to think sensibly, despite tremedous efforts and money was pour into mass media to make us believe unit trust is the magical pill to wealth and happy retirement. Working in an industry closely link to fund management and unit trust for many years, I have a lot to say about the fund management industry.

The slogan "Failing to Plan is Planning to Fail" is not entirely true. It is "Failing to Plan PROPERLY is planning to fail". In such a case, unit trust is only a tiny part of a bigger puzzle of wealth building.

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