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Monday, November 24, 2008

The Six Biggest Myths About Gold

. . required reading for sophisticated investors and advisors.

. . . dispels six myths in detail:
  • Myth 1: Gold is a bad investment
  • Myth 2: Gold is not a good inflation hedge
  • Myth 3: Gold is a risky investment
  • Myth 4: Gold does not pay dividends or interest
  • Myth 5: Gold is an archaic relic
  • Myth 6: Mining stocks are better investments than bullion
. . . read more

Monday, June 2, 2008

The Wide World of Unit Trusts

What is a unit trust?

Unit trusts have grown in popularity in recent years. It's not hard to figure out why. Unit trusts are the small investor's answer to achieving wide investment diversification without having to come out with prohibitive sums of money. And the benefits do not end at that.

But first, what is a unit trust? A unit trust fund is an investment scheme that pools money from many investors who share the same financial objectives. In exchange for the money, the fund issues units to the investors who are known as unit holders. Unit holders can sell (known as redeeming) their units back to the fund, or buy (and sell) further units.

Managing the fund

Meantime the fund is managed by a group of professional managers (known as the unit trust company) who will invest the pooled money in a portfolio of securities such as shares, bonds and money market instruments or other authorised securities to achieve the objectives of the fund. Because of the large sums collected, the fund manager is able to diversify among various investments in such range and diversity that the risks of investing are minimised.

Income earned

The total assets of the fund determine the value of the fund and the price paid by unit holders or the amount received when they redeem their units. The unit trust fund earns income from its varied investments in the form of dividends, interest income and capital gains. This income is then distributed to the unit holders in proportion to the units they hold, in the form of dividends or bonus units.

Protection for unit holder

As a unit holder, your protection within a unit trust is ensured in the way unit trusts are structured. Unit trusts are actually trusts. The protection is enshrined within the unit trust deed which spells out the respective duties, responsibilities and expectations of the three parties in the unit trust who are namely:

The unit holders who provide the funds for investing;

The unit trust company providing investment, administrative and marketing services; and

The trustee company which holds the assets of the trust on behalf of the unit holders.

There are three sources of information that you must examine when selecting a fund. These are the fund's prospectus, the trust deed and the financial statements comprising the annual and interim reports which are available for inspection, free of charge, at the premise of the fund manager.

Read the prospectus

The prospectus is a very important document as it sets out the fund's goals, investment strategies and policies and the risk-reward position it takes. It may be hard reading being full of legalese, but you must go through the fine print to ascertain that your goals and expectations match that of the fund. The financial accounts will show if the fund is sticking to its game plan and how well it is performing within the plan. Hence as an investor, you should consider the following factors when selecting a fund:

Investment objective - it must be clearly stated or it gives leeway for the fund manager not to carry out your intentions of choosing the fund.

Investment policies - the types of authorised investment and strategies should match your own convictions.

Size of fund and growth trends.

Any investment restriction, like minimum investment required.

Level of risks with its investments - unit trusts don't completely eliminate risks.

Types and amount of fees - understand them so that you will be left with no surprises.

Historical performance on total returns on an annual basis, NAV (net asset value which is essentially the worth of each unit), expense ratios, and particularly the distribution of income to investors and growth of assets - so that you can gauge how well the fund has performed over time.

Latest investment portfolio - so that you know the percentage of holdings in each kind of asset.

Information on Board of Directors, key management team (especially the fund manager, auditor and trustee.

Courtesy : Malaysian investor

Sunday, January 27, 2008

Iran sells oil in Asian money

Fri, 25 Jan 2008 15:46:31

A National Iranian Oil Company official says Iran is selling some of its oil exports to South East Asia in Asian Currency Units (ACU).

"Currently, most of the country's oil is being sold in euros and yens; 65 percent is sold in euros and 15 percent in yens," NIOC Marketing Director Mohammad-Ali Khatibi told Mowj news agency.

"Some of our oil to South East Asia is being sold in Asian money called ACU," he added.

Following the depreciation of the dollar, Iran decided to diversify the currencies it receives in exchange for the oil it sells.

Leaders of the Organization of the Petroleum Exporting Countries (OPEC) have also reviewed substitute currencies in their recent summit in Riyadh.


Saturday, January 19, 2008

Friday, January 18, 2008

Canadians uneasy about economy

Tue, 15 Jan 2008 17:44:16

Economy the main concern of Canadians
While for most Canadians environment is the main issue of concern, poll says they are growingly anxious about jobs and economic future.

The results are found in a survey in which Ontarians express particularly deep unease about their economic prospects.

More are pessimistic than optimistic about the direction of the economy, according to the Globe and Mail.

The poll, conducted by the Strategic Counsel for The Globe and Mail/CTV News, found that 12 per cent rate the economy as the most important issue facing Canadians, 10 percentage points behind the environment and tied with health care.

In Ontario, 16 per cent of those surveyed say the economy is the most important issue, just one percentage point behind the environment in importance.

The survey also sees Canadians as more pessimistic about the direction of the economy. Only 18 per cent believe the economy is getting stronger, compared with 31 per cent who thought so two months ago.

The poll of 1,000 Canadians is accurate to within 3.1 percentage points 95 per cent of the time. It was conducted Jan. 10-13, a period in which premiers met in Ottawa with Prime Minister Stephen Harper to discuss economic concerns.


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