Bursa Malaysia stock picks for 2009
Based on The Star newspapers’ Stock picks for 2009, here are some of the top stock picks for 2009.
- IOICorp
- Tan Chong
- AirAsia
- PPB Group
- Petronas Dagangan
- Petronas Gas
- Fraser & Neave
- Resorts
- Public Bank
Other stocks mentioned in other magazines/articles:
I personally feel that the above stocks have pretty good fundamentals with pretty good prospects especially IOICorp, AirAsia, Resorts and KPJ. But again, it is up to you to decide and for you to do your own homework. Remember not to over-relying on such stock picks since these stocks CAN BE quite volatile. Why? Because the list is being made public and everyone will most probably flock to them without doing any proper research. This was what happened to IOI few months ago. Popular stocks tend to have their price fluctuate a LOT.
As for me, I will not touch banking stocks for the most of 2009 even though Public Bank does seem to be the best (or the only good one) among the rest. I just don’t feel it is the right time to go in yet. But who knows, I might be wrong just like what happened in the last market crash. In 2009, I will concentrate on few defensive stocks and also focus on few sectors which will still do well during recession period - gaming and health. But we’ll see how it goes.
Good luck and hope this list helps. 
NOTE: I wrote this article last week, on January 3rd. The stock market has since went up by quite a lot especially Bumi-Commerce. Unfortunately, I’ve sold mine at a 4k loss just few weeks ago. Didn’t expect 1 China-related news to be able to cause the price to go skyrocket within few days.
NOTE: Spelled Burse instead of Bursa. =_= Corrected it. Sorry for the mistake
NOTE: The links to the stock will not show the updated price since The Star’s web site doesn’t allow that. You need to go and find the stocks manually in The Star Online : Business - Market Watch - Bursa Malaysia Stock Exchange
How much do you need to get started in stock investing?
Few of my friends have asked me before how can one begins his or her journey into the world of stock investing. And I should have included this post since the very beginning of this blog but I somehow neglected it.
Well, better late than never.
To start your first journey through the world of stock investing (only applicable to Bursa Malaysia), you will only need a total amount of RM 10.
- Open a Central Depository Account or CDS with a local stockbroking agency or banks. Just give them a photocopy of your Identity Card (IC) and RM 10 fee. This CDS account will serve like a deposit account for you to keep your shares.
- Open a trading account with the stockbroker in Step (1). You will need to provide your income statements (or about 3 months of payslips) and fill up a trading form.
Once your application has been approved, you will be assigned a remisier (if you do not have any particular favourite) by the stockbroker and be given a trading limit.
Buying and selling shares
And that’s it! You’re ready! It’s as simple as that. But do bear in mind that for every transaction, you will be charged 3 fees - brokerage fees, clearing fees and stamp duty.
If you need more information or more detailed explanations, you can go to KCLau’s How to buy share in Malaysia.
Hope it helps!
What is an emergency fund and how do you start one?
Emergency fund is the amount of money you have at your disposal whenever an emergency occurs. An emergency can be anything, ranging from a broken kitchen pipe, a medical expense, car repair, a retrenchment, etc. In this world of uncertainties, especially in the year 2009, many things can happen. That is why one should always have an emergency fund - just in case.
But how much should you have? Some experts said 3 to 6 months of monthly expenses, while some even said 9 months to 1 year of expenses. In the end, it depends on you and your living lifestyle. Calculate the amount of debts or fixed expenses you have to pay in each month. They can be mortgages, study loans, food, rental, etc. The total amount will be your fixed expenses for 1 month. Now, take that amount and make it 3 months to 6 months. For example, if your fixed expenses for 1 month is RM 1k, your emergency fund should be at least RM 3k. This is to ensure you can last for 3 months without any pay.
I know it’s not easy to have that amount of money all of a sudden. That is why you should start small. Get another savings account and pump the money in regularly. Only pump the extra money you have, after paying off your monthly fixed expenses. It could be 5% of your monthly pay, or 10% of your pay, whatever is comfortable for you. Start doing this every month and build up that emergency fund of yours. Preferably, that emergency fund should be inside an account which you don’t touch. You’ll defeat the purpose if you put your “emergency fund” somewhere but end up using it to buy something you WANT. Discipline is the key word here.
Once the amount has reached your so-called “target”, then you can look for other goals such as investment. Try to avoid touching your emergency fund at all cost and keep it as liquid as possible. Because in case there’s an emergency, you will want to take the money out as soon as possible, with the least damage or penalty incurred. In other words, you want it to be there when you need it. That’s why putting it into savings account is better than Fixed Deposit, stocks or bonds.
If you are very confident that there will not be any emergency in the near future, then you can take some of the emergency fund and pump it into low risk investment types such as Fixed Deposit. Make your money grow, without taking too much risk because if you don’t make it grow, it might become worthless few years down the road due to inflation.
That’s it! Simple right? It’s easier said than done actually. Remember that the key word here is DISCIPLINE. If you don’t have that, no amount of emergency fund will be able to save you when there’s really an emergency.
To summarize, here are the things you need to remember:
- Set up a target. How much do you need to survive without pay for 3 - 6 months? Take into account all your fixed expenses such as food, rentals, mortgages, loans.
- Start small. Deposit a little bit of your extra money into the emergency fund every month. The amount should not be significant as not to change your lifestyle.
- Put the money somewhere safe, somewhere isolated and somewhere you will definitely not touch. However, make it as liquid as possible so that you can take the money out without incurring any penalty or losses.
- Discipline. Your emergency fund should only be used for emergencies and not for you to buy that cool gadget.
That’s all from me. Hope it helps. Here are some articles which might be helpful for you.
- Why you need an emergency fund?
- Emergency cash - how to prepare with an emergency cash?
- How and why to start an emergency fund?
Simple way to calculate your net worth
As year 2009 approaches, many of us will look back at 2008 and look at what we have managed to achieve - in terms of life, family, love and of course financially. In this article, we’ll talk only about finance since this is what this blog is all about.
Over the past few days, I’ve actually approached some of my friends and asked them whether they know their net worth. It’s not that I want to intrude or want to know how much money they have. It’s more like I’m curious whether they know what is the meaning of “net worth”. Surprisingly, a lot of my friends have no idea what is net worth…and there are few who know but have no idea how to calculate it.
Therefore, in this article, I will talk briefly about the simple way of calculating your net worth.
A net worth for an individual is the total assets minus total liabilities, or in other words, your financial position. As for the net worth of a company, it is the so-called “book value” or “shareholders’ equity”.
There are basically 2 types of net worth. The thorough one, and the liquid version. To some people, your personal net worth means how long can you survive without a job during emergency…in other words, your net worth = the value of your liquid assets. However, the actual net worth calculation should be inclusive of your illiquid assets and also all your outstanding debts.
Here’s how you should calculate your net worth (not the liquid version).
- List out all your assets ranging from your cars, real estate properties, factories, etc and group them under one category known as “major assets”. Give an estimation to the actual value of these assets. Try to be realistic because overvaluing such assets will look nice, but unrealistic. For example, a 7 years old Proton Wira should cost around RM 10k-15k, not 40k.
- List out all your liquid assets such as cash, stocks, bonds, funds, and the balance in your savings account, current account and also your retirement account. Get the total and put them under a category called “minor assets”. Also, remember to take into consideration the taxes involved in selling your funds, bonds and stocks.
- Next, gather all your smaller assets which you can sell for more than RM 500 each, such as watches, antiques, electronics, gadgets, home appliances, handbags, jeweleries, etc. Give an estimation of their actual values and park these under a category known as “other assets”.
- That’s it. Your total assets have been calculated. And we shall now move on to the ugly part - the liabilities.
- Start with your large liabilities such as the remaining balance of your housing and car loans. Those are pretty big amount. So start with those first and group them under “major liabilities”.
- Next, check your other smaller liabilities such as credit card bills, student study loans, instalment plans, or any other debts you have. Total them up and group under a category called “minor liabilities”.
- Finally, subtract the total amount of your liabilities from the total amount of your assets and you will get the amount which is your net worth.
Remember that your net worth can either be positive or negative. If it is positive then it’s good for you but if it’s negative, don’t worry so much. Work harder in 2009 and hopefully the next time you calculate your net worth, it’ll be positive.
Good luck and hope it helps.
Importance of finding the right mutual fund agent
I’ve always told people that it is very important to engage a good stock broker and a mutual fund agent. Why? Because I personally have made such mistake before. My stock broker is okay so far since I am not someone who takes tips from others when it comes to stock investing. I used to be like that but ended up lost a lot. Haha.
As for Public Mutual agent, it is not about tips but commitment from the agent. Can your agent really commit his or her time? Is what your agent say relevant (more like advice than tips)? And is your agent efficient enough?
Those are few questions you need to ask yourselves before locking yourselves up with a particular agent.
As for me, I engaged my ex-supervisor who is a part-timer. She used to help me a lot in the past and I did not hesitate much then. But the end result is not really that pleasant.
- I told her I need to change my equity to bond. That was before the market crash. She told me not to do that because China funds are sustainable. I know China funds are better than some other equity, but I also know bond funds are better options when the economy is bad. To date, the bond funds which I was looking at have gone up quite a lot, but my equity funds have dropped nearly 30-40%
- I also told her to stop the auto debit in September. She said it will only take effect in October but until now, it is still the same. I was hoping to collect enough cash for myself to use and keep during this difficult period since I expect the equity funds to drop further in early 2009. Save up now, and use the money to buy more at lower price later.
- Also, I have no ways to know how much money I have invested after all this while and how much money I have left based on the current fund price. It’s important to keep track of the total loss or profit but I just don’t have the mean to do so since my agent doesn’t help me with that.
- It’s very hard to meet my agent since she no longer works in the same building as I do. There’s not much communication between my agent and I.
To some, these 2 might not be very big problems. But to me, I was hoping my agent will listen to me and do what I told her to do. If she is not free, then she can tell me and let me know how I can get it done by myself. In the end, I consulted my friend who is in Penang. Here are the solutions for point (2) and (3).
- I can call Public Mutual’s number if I want to stop the auto-debit or I can leave my bank account balance to be less than the auto-debit amount for 3 months, and the auto-debit feature will stop automatically. Or I can just go to the Public Mutual office (I know there’s one in Damansara Perdana) to fill in a form to stop the auto-debit.
- Go to the Public Mutual office and seek help from them to check your outstanding balance and how much you’ve earned or lost. They have the system to calculate that.
- If you want to change to another agent, you can go to the Public Mutual office and fill up a form.
As for my case, I will talk to my current agent first and will most probably change the agent to my stock broker uncle. At least he stays nearer to me and I do meet him quite often.
Hope my personal experience here can help you.