93) UTC Sales Ideas #1 - Promote to Stock Market Traders

93) UTC Sales Ideas #1 - 

Promote Unit Trusts to Stock Market Traders

Stock Market Investors are used to stock price high volatility.
Making fast money and losing fast as well.

Their common complain is that Unit Trust is Sssssssslllllloooooooowwwwww.

In certain perspective, they are right. Unit Trust prices only change once a day, and it is only published on the next day. The price of the Unit Trust fund is calculated based on the closing prices of all the assets in the fund. The total Net Asset Value is then divided by the number of units in the fund to get the Net Asset Value per Unit.

Stock prices can change very frequent, sometimes in a blink of the eye. In the stock market, you make money by buying low and selling high.



Compared to stock prices, the Unit Trust price changes are very sssslllllloooowww.

Question: What is shortest duration you can make money by price changes in Unit Trust?
Answer: Once a day.

Furthermore, Unit Trusts are a portfolio of multiple assets and diversification. A typical equity fund has about 50 different stocks, many bonds and even money market instruments. The diversification reduces the risk of a specific asset or stock.

Specific Stock Risks means that your investment performance relies on only that one stock. Your profit or lost depends on the price changes of that stock.

There are also limitations that a fund can invest into a specific stock. An equity fund can only invests up to 10% of its Total Net Asset Value (NAV) into one stock. If the particular stock value increases above 10% of the total NAV, the fund has to sell away part of the stocks. This is to reduce its value to below 10% again within a specific duration.

Unit Trusts allows you to invests into multiple stocks. Using Unit Trusts, you can easily invest into foreign stocks. As a retail investor, you need to study about the company's financials to know about its business profitability. In Unit Trust foreign equity funds, the fund managers will do all the studies for you.

Furthermore, for a better quality financial reports, you need to pay to subscribe for the reports prepared by investment research companies. That will be additional costs to you.

The switching facilities also allows you to move your investments into different assets types or countries quickly. For example, you are currently invested into Malaysia equity fund. Now you feel that there is a better opportunity in Australia stocks. You can easily switch your investments into Australia fund. After a few months, you feel that China Stocks has higher potential. Then again, you can easily switch into a China equity fund.

If you had invested into actual shares in Malaysia, you have to sell the Malaysia shares. Then transfer your money into an Australia stock broker. After few months, you sell off the Australia stocks and transfer the money back to Malaysia. Now you have to transfer the money to a China stock broker.

The cost to transfer the money and foreign exchange conversion spread costs will reduce your profits from the shares. 

It also takes a lot of your time to go to the bank to do the money transfers.

With Unit Trusts, it is very convenient, lower cost and time savings.

As a summary:
a) Diversification
b) Foreign investments
c) Lower cost
d) More Convenient 
e) Less time needed

More readings:

71) Benefits of Unit Trust vs Share Investment.

http://highlevelrules.blogspot.com/2017/07/unit-trust-vs-share-investment.html

127) Time In vs Timing the Market
https://highlevelrules.blogspot.com/2017/10/time-in-vs-timing-market_24.html 

177) Investing vs Trading
https://highlevelrules.blogspot.com/2018/05/timing-vs-trading.html