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This is perhaps the most common factor we have come across. lf you are risk-averse, you are not likely to employ aggressive trading. It is critical for you to assess the amount of risk you can tolerate. Age is a factor that determines the degree of risk that an investor can take. Young and mobile people are generally able to tolerate more risks.

A conservative approach looks for income gains while aggressive trading seeks capital appreciation. In short, your desire for either income or capital gains determines how you want your money to be managed.

Is it always safe and preferable to have a conservative financial obiective? Being conservative does not always deliver good and secure returns at the end of the day. History suggests there are cases where conservative instruments fail to provide the "expected steady" returns to the investors. Always strike a balance on your investments to achieve "optimum" results.

If you are extremely conservative and have all your money sit on a fixed deposit, you are likely to lose more over the years given the impact of inflation which reduces ones purchasing power. It is alright to take some level of risks and an investment advisor can help you to manage your risks effectively.

Before you decide on your investment objective, you must carefully assess your situation to determine tbe needs for liquidity. If you are investing to support your house mortgage every month, you will need a steady stream of cash. Therefore you will favour investments that offer high liquidity such as stocks. In this case, you are unlikely to take a very conservative approach - putting all your money into the fixed deposits or properties.

It is generally more difficult to sell a piece of land than your shares. Nevertheless, you will find it more difficult to liquidate either of the investments if they were both bad apples.

Whatever investments you make will be affected by the tax structure of the country. Over in the more established markets where the tax structures may be complicated, investment advisors play an important role in advising their clients on tax-related issues.

Would you lilte to follow a do-it-yourself approach or employ an investment advisor to help you? If your investment objective is to plan to invest in the stockmarket to generate short-term income, you have to allocate more time on your investment that is you have to reduce your leisure time activity - playing golf, tennis, etc. If you are investing for long-term (purely fundamental-driven), you can afford to have a more relaxed lifestyle.

Some investors find it more stimulating and satisfying to handle their investments. But are their returns satisfying enough? If you are a lawyer or doctor, what is the probability that you will generate better investment returns than an investment professional who is constantly in touch with the financial markets? Statistics suggest that investment professionals are able to deliver better results over a specific period.

In short, consider the trade-off between managing your money and leisure carefully before seeing your investment objective. In making investment decisions, know what your opportunity cost is.

You must assess your risk profile before setting your investment objective. To conclude, it is not impossible for Mr. Wong or you to achieve your financial dreams. What matters is a little discipline, foresight and not forgetting a bit of luck.

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Reproduced with permission from Normandy Services Sdn Bhd, Tel:603-4695560 Fax:603-2945561