Which Strategy for MM2H Investments
I recently started participating in a forum dedicated to Malaysia My Second Home: www.my2home.info. I first started interacting with Scott when I was working for Allo’ Expat and he always came up with great informative posts. He opened his forum to share his MM2H experience. At the time, a competitor to AE’s MM2H section, now a definite gold mine of informations.
Of course, some of the posts are about personal finance, financial advisers, and how to get juices out of the current market conditions… I joined the which strategy for fund investment discussion and gave my take on the Adviser / Investment situation (one of my posting is here-under). Dare to join the discussion?
Markets have a tendency to not go as per exponential graph. Historically they go in cycles of 20 years. 20 years of bear markets, 20 years of bull markets. We are currently mid-way through a bearish one – since 2000 actually. Hence your bad experiences with Lump Sum. The idea in such a market is not to invest lump sum in markets, but to build positions by cost-averaging over the next few years to rip the rewards when the bulls start seeing red. It may take 5 to 10 years before that… which is not ideal for people considering retirement or already enjoying their mojito on the beach.
The best, as always, is to not have all your eggs in the same basket, and plan your investment with different terms strategically. FD and others “sure” things should get a faire share to ensure cash flow over the next few years (now to 3/4 years), but market investment still is a good approach for LT. And by LT I mean really long term. Not trying to plan for 5 years only, but more likely 10 or more. And should the markets be good in 5, crystallize the profits and diversify, if not, keep going until you have the possibility to do so.
And this is I believe a decent financial planner should not show exponential graphs. They end up deceiving their clients, making things worse.
As a side note, I also think that we find a lot of horror stories online because people tend to react a lot more to losing money than making it. Hence the bad ratio of horror/good stories we find online. My humble take