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Before you begin investing, it is important that you know what your financial goals and objectives are. Bear in mind that investment differs from savings. Smart investments are usually a result of careful planning that involves thorough understanding of the market.

Here are some steps to guide you on your investments:
  This closely relates to your financial goals. You may want to purchase a house or vehicle, plan your child’s education, go on a holiday or plan a comfortable retirement. Whatever your goal may be, you need to know what you want out of that investment. Most people invest to:
Maintain the purchasing power of the principal amount invested
Obtain income from their investments
Grow their net worth
  You can achieve your goals by investing your savings based on the time frame when these financial goals can be met.
  Investments are long-term commitments. Therefore you must consider your ability to invest before you commit yourself. You may want to consider the following questions before investing:
How much money do you have for a medium to long-term commitment?
Do you fully understand the product that you are investing in?
Does the intended investment fit Into your portfolio?
Do you understand the investment risks involved and do you know your tolerance level for loss?
How much returns will you be satisfied with?
How long do you want to invest?
Do you have the flexibility to sell the investment in the event of an emergency?
How can you monitor the performance of your investments against your changing needs?
  Varying your investments is an effective way of minimising risks and protecting you from volatility. Different
investments are exposed to different risks and by diversifying, the losses from some investments can be
offset by other investment gains.
Time Value of Money
  The earlier you invest, the greater your returns will be.
The chart on the right is an example of how a RM1000
investment will grow over a period of 40 years with different
rates of return.
Impact of Inflation and Taxes
  Although you may earn a return on your investments, the actual value of your investments may be reduced
due to the effect of inflation and taxes unless your investments are tax exempted. Therefore ensuring a
minimum average rate of return in the longer term is crucial.
Maximising Returns
  Use the rule of 72 to help determine how many years it will take to double your money. The formula is as follows:
interest rate you can get
= Years to double investment  
       If the return calculated is unsatisfactory, you may consider other options that pay a higher return.
Ringgit Cost Averaging
  Widely practiced in the unit trust industry, this technique involves investing a fixed amount of money for
specified interval such as monthly, quarterly or yearly regardless of how the stock market performs.
Risk-Return Relationship
  It is important for you to consider the level of risk associated
with different type of assets and choose the appropriate asset
to invest. “Safe” investments may have lower returns but your
original investment is preserved. However, investments with
higher returns will have higher risks.
Understanding Risk
  Long term investments pose lower risks as compared to short term investments because as the time period
of an investment becomes longer, the variation and volatility in returns tend to be lower.
  Each asset is unique and has a different risk-return profile which you can invest in to realise different financial goals. Below is a graph that shows the risk-return of various types of investments.
  Potential Return
For more information on investing your money, download our booklet or visit our FAQs to have your queries answered.