But irregardless of how easy and simple trading it can be, the sole question remains – should you switch (or trade) your mutual fund often? For me, it’s not recommended. But this is just my personal opinion. Don’t come after me if things end up differently for your case.

Anyway, here are the reasons why I do not switch my fund often.

• I’m lazy. Yes, I admit it. The amount of research needs to be done is hugeeee. It’s even worse than stock trading. Because for any single fund, you are practically looking at few stocks or an entire industry in general. In stock trading, you only need to look at few companies that you know about.
• The service charge is high especially if you are changing from equity fund to bond fund. But even for standard fund trading, the service charge is high. Do bear in mind that the amount you are trading is pretty huge too.
• Mutual fund investing is more like a savings account for me. And well, I don’t go changing my savings account from one bank to another. So it’s the same concept. I pump in money every month, and just leave it there. Once I need it, I will get it out.
• Mutual fund investing runs on the concept of dollar cost averaging. It means you buy the same unit at a lower price in order to average out the units you’ve bought at a higher price before this. So if you are going to switch it around….doesn’t that defeat the purpose? It’s just like buying the stocks of a single company at different pricing VS buying different stocks at different pricing. That’s not dollar cost averaging in my opinion.
• Last but not least, if I really want to switch fund often, I should just spend my time, efforts and money into stock investing since it’s a lot easier to monitor. The rewards are bigger too (so are the risks).

So yeah, those are the 5 reasons why I don’t like to switch fund often. Most people I know have the same reasons of not switching their funds often. And there are also those who don’t like to trade at all, be it stocks or funds. To them, it requires too much time. But either way, there are more people who do not like to switch their mutual funds often, as compared to those who always switch around. Yes, there’s no doubt that you might be able to earn more by switching around – it’s the same with short term selling in stocks. But the risk is also there.

At the end of the day, it depends on your objectives to invest in mutual fund. Are you looking to earn some quick cash and are willing to face some risks? Or are you just treating it as some sort of a savings account? The answers to these few questions will determine whether you should switch your mutual fund often.

Hope it helps.

Why? Well, it’s because it’s more rewarding than our Fixed Deposit and less risky than investing in stocks. For some, it is because they don’t really need to manage their portfolio. They normally just leave it to the fund managers to handle their money for them. The losses will be minimal, and same goes to the rewards.

But lately, things have changed a little on the mutual fund front. There are more and more funds to choose from now. Investors need to read up about the background, the industry, market segment, etc before deciding which to invest in (and choosing a proper mutual fund can be quite a daunting task now). Also, investors can start to trade their mutual fund units ONLINE.

As you can see, the mutual fund we have now is no longer the same as the one we used to know. Instead, it has become something similar to the stock investing that we all know (and some of us fear) - online trading, a lot of options and plenty of research works to be done.

So other than the high service charges, the minimal losses and profits…. there’s really not much difference from stock investing. If that is the case, why are people still interested in mutual fund investing and the same group of people remain fearful of stock investing? Aren’t these 2 becoming incredibly similar? Mmm perhaps most people still don’t know anything about these 2 and the mutual fund…being cheaper, definitely looks to be ‘safer’.

Not really. For your information, my losses in mutual fund in the year 2008 was about 60% while my stock losses was lesser than that. And to make things worse, I can’t simply change/sell the funds because it’ll incur further losses for me – service charges. I can only stop putting money in, cost averaging, or switch to bond (and incur service charges). Who says mutual fund is safer?

That is why I always suggest people to look into stock investing. There’s really not much difference between the 2 and for me, the pros of stock investing far outweighs the pros of mutual fund. Treat mutual fund as a form of saving, and stock investing as…well…a form of investment.

But either way, you should know what you are putting your money in BEFORE you actually do so. Putting money into something you have no idea off is equivalent of gambling….and not investing. So thread carefully.

But I didn’t have the time to change since the Public Mutual office only opens during office hours (close on weekends). This makes the office inaccessible to working people like me. Maybe they do this on purpose? I’m not sure.

So during the Chinese New Year break, I finally managed to go to the Public Mutual office in my hometown and requested to change my agent. Here’s the conversation between me and the customer service officer.

Me : Hi, I would like to change my Public Mutual agent. Do you have a form or something which I can fill up?

Officer : Sorry sir, we don’t have such a form.

Me : Huh? Then how can I change?

Officer : I’m afraid you can’t do that sir. You need the agent to write in a formal letter to the head office.

Me : What?! But that person is not reachable!

Officer : I don’t think there’s anything you can do.

Me : What nonsense is this? I’m the customer, and I can’t do what I want? It seems like I’ve been held hostage by the agent!

Officer : That’s our policy…we are merely following the orders from HQ.

At that moment, another customer service officer stepped in.

Officer B : You can actually write in a formal letter by youself, sign it and write down your IC number, then post the letter to the HQ. They will change it for you.

Seriously speaking, I’m not happy at all with such policies. It seems like Public Mutual is trying to avoid such “transition” taking place and this is making things difficult for the investors especially when those agents are not reachable. And I really don’t like the feeling of being held hostage by the agents.

Anyway, I’m going to call up my friend to see if such a policy does exist.

So for those of you who are trying to go into Public Mutual, be sure to get a good agent who will never go disappear.

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.

About 2 months ago, I wanted to move my high-risk equity fund to bond fund but my uncle told me not to do so since China is still quite stable. Now, the bond fund which I was looking at has gone up and my equity fund has gone wayyyy down. Too late to sell or to convert to bond fund.

Then I decided to call up my agent and told her to help me stop the auto-debit. My plan is to stop the auto-debit, take the money and save it up, and then buy in again (with lump sum) once it drops further. I expect most equity funds to drop further in the months to come.

Just sharing with you my decision. I could be wrong and this might be a beginner’s mistake. I don’t know. But I feel it’s worth a try.