Risk Takers and the Risk Averse

If you do have some spare financial resources, what would you do?

Daredevils or Cowards?

Any financial consultant will tell you that you must not put your eggs in one basket. The risk averse will follow, blinkered eyed, to fixed deposits no matter how low the interest regime.

Granted, then what other baskets must one consider? The usual happens to be in properties and land purchases, stocks, bonds, unit trusts and for the braver ones- futures, commodities such as gold and silver and the money market. Then, there is always that other alternative-buying insurance policies.

So, what do you have right now? All of the above,some of the above or none of the above which is unlikely.

In Malaysia, for those who do not trusts stocks, bonds of any nature are acceptable. We used to have the Malaysia bonds for senior citizens but so far there has been none in the past year or so. Then there is the sukuk bonds which is good. There hasn't been any lately, too.

Many were carried away by buying unit trusts. Except for those unit trusts run by the Amanah Saham Malaysia which offers good returns but not many can buy as most are under the bumiputra affirmative programme. Some unit trusts have shown to be good at one time or another. There were good ones but not many. Ask any Joe or Jane and they will tell you that there are more misses than hits!

What next? Go into Bursa KL but in cautious mode. What can be considered conservative stocks? Definitely not derivatives. You will lose trousers and all here if you are not in the money!

The best bet are real estate investment trusts (reits). Question is, most are too expensive except for Stareit and Pavreit. You may also want to look at Al Aqar reits as it owns most of the KPJ premises and Johor Corp will be selling more of their properties to the trust as they are currently cash-strapped. The issue is are you entering at the right price. Some do distribute good dividends. You must study the dividend track and the price if you want to dabble in reits as returns are often slow. Most market players consider reits highly uninteresting.

Assuming if you want to get into stocks, you may want those that pay good dividends. Look no further than Mesiniaga and Maxis at their current prices.

For the brave ones, just keep your money aside and buy blue chips when they fell like tenpins on bad market days. There were a couple or two the last year and many got good bargains. Good stocks to follow are Genting Berhad, Sime Darby and Maybank.

Properties are great investment. However, as always you must buy property in the right location or you will be stuck with this non-liquid asset for a very long time as they are really hard to dispose off. True, there are many who buy land but they do not tell you the sad stories; only the good ones.

I would not go into the money market but those who bought Aussie dollars did make it good.

Commodities can be dangerous though those who bought gold are so far still smiling all the way to the bank.

Then, there are the insurance policies to contend with. While providing coverage, they are also instruments of finance. There are many types of insurance policies on offer these days for investment purposes. The most obvious on is the endowment policies with its regular returns. Such policies though tend to be expensive. The others are life policies hooked to unit trusts, bonds, indices and derivatives. Some are good.

Well, do look at the resources you have under your pillow and do not be all risk averse like the person who was entrusted to 'grow' the talents but hid it in his garden as we know from the parables. No pain, no gain!

No risk-taking-no money! No money, no talk!