DESPITE the lure of high returns and quick profits of unlicensed investment schemes, two young investors that SunBiz caught up with insist they could not be tempted due to the inherent risks in the schemes and their belief that they are just scams that can collapse at anytime. Delakan Ratha Krisnak, 32, attached with a non-governmental organisation, and Lee Tze Yang, 29, an engineer at a local oil and gas company, provide some insight into their investment experiences.
Briefly tell us your past and current investment.
Delakan: I’ve been investing in equities for eight years. With a salary of over RM2,000, I started with RM300 to RM400 a month eight years ago. Currently I’ve about 10 stocks in my portfolio.
For me, the return from the stock market is higher than putting your money in unit trusts or the banks. The stock market has given me good returns.
My goal is to gain at least RM1,000 a week and RM4,000 a month.
Lee: I see investment as an instrument in achieving my objective of financing a house. The other reason is my personal interest in finance and economics as this is the only way to do my own analysis. I started the investment four years ago.
My unit trust portfolio has a mixture of equity and fixed income funds. I don’t buy on a monthly basis, but I do set aside funds to invest when the opportunity arises. My current exposure to the unit trust market is RM70,000.
For the equity market, I invest more in the US market as the information is more readily available whereas I have very little exposure in the Malaysian stock market.
In terms of asset classes, 70% is in equity and 30% fixed income; geographically, 75% to 80% is abroad and 20% to 25% is in Malaysia.
Do you see low disposable income as a barrier for people to invest?
Delakan: This is what we all face today. When we start as a graduate, the income is too low for you to begin investing.
When there is no justifiable amount of capital, you can’t see the returns.
Although I was holding a good post in the civil service those days, I didn’t buy my car until I was 29 years old. I didn’t want to be stuck in the rat race. I wanted to save up first as only then will my capital get bigger.
Don’t buy shares that are expensive, you won’t see the returns. You will make more money if you buy more lots of low-price shares rather than expensive ones.
Did you face any challenges? How’s the performance of the portfolio?
Delakan: When you lose one time, please do not run away. Try to go back in a few days and clear your mistakes. Fear will be there but plan ahead to get back to the market.
Lee: Overall, the portfolio has been satisfactory. My returns thus far is about 10% with fixed income funds laggards but equity funds have outperformed.
Did you make any losses in your investment?
Delakan: My first and biggest loss was about RM9,000 from the purchase of 10,000 shares in an aviation stock, triggered by a merger talk with its peer. However, I told myself I had to be persistent, persevere and don’t get upset. I took the risk without knowledge at the time. Today I will read the news first, which is the different compared with eight years ago.
Advice to the investing public.
Delakan: Please get adequate knowledge first. Stock market is about knowledge. If you have the knowledge, you can invest more.
Lee: Start early and make it a habit to set aside money on a periodic basis and invest only in what you know. Also, you’ve to make sure your investments are approved by regulators. – Sundaily