Purchase of a lump sum
A one-time purchase is the most common way to invest in a trust management scheme. A person who has accumulated enough money to meet the minimum required amount can invest these savings in a scheme of their choice by filling out a request form for a trusted unit perspective. When you make a one-time purchase, there is no additional obligation on your part to add this amount. You expect that over time you will want to see the value of the amount you invested in the increase and earn capital gains. When it comes time to dispose of the units, the unit repurchase price should reflect the accumulation and structure of investment returns from the time of purchase. The structure of the return on investment over time, much greater than the amount invested, makes the unit’s trust scheme particularly attractive to investors.
Reinvestment of income
Device trust schemes give occasional distribution. Distribution is paid to participants. It is recommended that members do not charge for distribution. Rather, they should reinvest the distribution, buying more units of the trust scheme of the unit. This will allow you to increase your investment. Distribution reinvestment is the easiest way for a person to increase their investments in trust management schemes without spending more investment money.
If the unit owner instructs the malaysia unit trust investment to reinvest its distributions, the resulting distribution is used to purchase additional trust units at the quoted sales price, usually one month after the distribution date.
Regular savings
Another good way to increase your investment in mutual funds is to regularly contribute to the trust management scheme. This is achieved through a series of regular investment amounts. You can give your bank a permanent instruction to send a certain amount, once a month, more or less, to invest in a trust bank. This is a disciplined way for people to accumulate capital for future needs. The cumulative amount at the end of the period can be quite significant compared to the amount paid regularly. This form of savings is called dollar-based average cost and forms the basis of a retirement savings plan, such as the Staff Security Fund.
Investments can be made with regular savings in amounts from RM100 per month.
Credit for investing in trust plans
Some people invest in a trust fund using borrowed money. They hope that the profitability of their mutual funds will not only cover the cost of the loan but also bring them profit in addition to this. I have two things to say about loans in order to invest in units trust schemes. First, don’t do it. Second, don’t forget the first.
This activity certainly has a big disadvantage. The cost of investment may fall, say, with a fall in the stock market. Although the value of a unit trust may decrease, the amount of credit taken to purchase it remains the same. If this happens, the investor’s savings can be eliminated. You will be forced to sell your units at a loss and reimburse the difference between the proceeds of the trust agreement and the amount of the loan you have taken. Needless to say, this is a stress that I don’t want for any investor. Therefore, being a trusted advisor to the unit, I do not encourage investors to invest in using borrowed funds.