Q : My Children are aged 1 and 3 and i would like to send them overseas for terteiary education. If i have RM50,000 as savings now, how should i go about investing in the different unit trust funds to ensure good returns and capital appreciation in 15 years from now.

A : Power of compaunding interest

Early planners always have the advantage of leveraging on the power of compunding earnings over time. Investing early will allow you to spread your capital outlay over the next 15 years and recoup any losses in the meantime. The few things you will need to determine before choosing your investment vehicle and commitment level will be the future value of their education. This will hepl you determine your targeted returns based on the time and your risk appetite.

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Q : I have heard about local and global funds. Who decided on the portions of asset allocation of a fund? What are the additioanl risks involved in investing in global funds where i have no acces to market information.

A : The difference between Local and Global Funds.

The difference in such funds mainly in the geographies/countries it invest in, the classification on fund types i.e. whatever it is skewed towards growth, income or balanced-type fund and type of investments. The investments allocation of these funds will then be guided by these criteria, the fund manager’s invesment process and philosophy as well as the market enviroment.

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Q : Should i lump all my money into one fund or should i deversify my investments via different asset clases or go global? How do i maximise my investments?

A : An Investment rule of thumb.

Make it a practice to set aside 15% to 25% of your monthly salary for savings and investments. It is now how much you earn but how much tou put away regularly and reinvest over time. You will pleasently suprised by the results or regular savings/investments and compaunded earnings over the mid to long terms.

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