Start With A Financial Plan

Trading stocks should be treated as a business venture — it will require
time, knowledge and money to succeed. Your Financial Plan represents your
roadmap to success.

Decide Your Financial Objectives.
If you are a 60 year old looking for cash flow to fund your impending retirement, your priority would be to generate an income stream rather than large asset value growth.

If you are a 25 year old who wants to begin to invest, capital growth would be the priority, rather than income stream.

Your financial objectives will determine whether you trade liquid shares or not.

Decide Your Risk Level.
Decide on your risk level and the types of investments you can afford to make will be set. Remember, the higher the return you want to achieve, the higher the risk.

Low Risk Level
I am not very comfortable with risk and will invest
in fixed interest/capital guaranteed securities
(government bonds, bank term deposits).

Medium Risk Level
I can take on a moderate amount of risk (blue chip
Industrial and Banking and Finance sector shares).

High Risk Level
I am comfortable with risk. I am seeking a high return
and prepared to evaluate companies early in their
growth phase (recently listed resource companies).

How Do You Fund Your Investments?
For most of us, we do not have immediate access to a large pool of ready savings.
Using the equity you have in a property to fund your share portfolio is a common
approach.

EPF savings is also an effective vehicle for providing funds for investing and
the majority of Malaysians have access to these funds.
Most major banks and insurance groups offer margin loan facilities. This is where
you start a portfolio with savings and then use this portfolio as security to borrow
further funds to buy more shares.

In most instances, the problem is not acquiring funds to start a portfolio,
it is having the knowledge to invest with confidence.