224) What To Do With Your Investment If You Think The Stock Market Is Going To Crash?

Some of you may think that the stock market is going to crash soon. So, what to do with your Unit Trust investment now?

Ideas for you to consider as listed below.

A) You had already Invested 

First, check what Unit Trust funds have you invested?

If you had invested into Bond or Money Market funds, the stock market crash will not affect much on your funds.

If you had invested into Equity funds, then the stock market crash will affect your Equity funds directly.

Second, which country are your funds invested into?
If your Equity funds are invested into the affected country, then your Equity funds will be affected directly. Do take note that the economies of the different countries affect one another. As USA and China are the 2 largest economies, their stock market crashes will affect the whole world stock markets.

If you had invested into Equity funds in the countries that are going to be affected, then you should switch out of equity to bond or money market funds.

Do not sell your equity funds as there will be Service Charge costs again when you invest back in again.

Use this idea only if you are very certain that the stock market is going to crash.

What if you are right, and the stock market crash?
You had saved your money. Congratulations on your right timing.

What if you are wrong, and the stock market did not crash?
You had lost the opportunities to make money when the stock market rally. Too bad.

B) You have not invested

If you have not invested, then the scenario below will happen.

If you think the stock market will crash, you would have been waiting for the crash to come.
For some of you, it may had been a long wait.

What if you are right, and the stock market crash shortly after?
You had saved your money. Congratulations on your right timing.

What if you are wrong, and the stock market did not crash?
You had lost the opportunities to make money when the stock market rally. Too bad. 
Next question to consider....

What do you do with your money while waiting for the right time?

You must have placed your money into the bank to earn some interest from Fixed Deposit or Savings Account.

If you had placed into the Savings Account, your interest would have been very little.
If you had placed into the Fixed Deposit Account, your interest is slightly better than the Savings Account.

However, currently in Malaysia, you will not get any interest if you redeem/withdraw your Fixed Deposit before its maturity.

For example, if you placed $10,000 for 12 months maturity, no interest will be given to you if you withdraw after 11 months. You will only get the $10,000 capital.
You have to wait for the full 12 months for you to get the $10,000 capital plus the interest.

If you have a large amount, you may place your Fixed Deposit into multiple amounts and maturity periods. This will allow you to withdraw any time and at least get some interests for those already matured earlier. However, you will need to monitor and manage the multiple accounts and maturities.

Now, you may ask another question.

Is there any better way:
1) Earn higher interest than Savings Account
2) Still gets interest even if withdraw any time before the maturity
3) Put all the money into 1 account for easy management
4) Do it online without going to different banks and queue.

You may want to consider putting your money into a Cash Deposit fund.

There are Unit Trust Cash Deposit funds that allow you to add and withdraw money any time like a Savings Account. The interest is accumulated daily and your money value will increase continuously almost every day.

You can earn interest even if you placed your money for 7 days. There is no maturity period. So, you can keep your money as long as you wish, and keep earning the interest daily.

How much can you earn interest in a day? Let's do the calculation.
If you have place $10,000 and get 3.65% interest per year, how much do you get a day?

$10,000 x 3.65% divide by 365 days = $1 per day.
You will see your Cash Deposit account gets higher around $1 every day.

After 1 year, your money will be more than $10,365.
This is because the earned interest gets higher and higher due to the compounding effect.

There are also some Cash  Deposit funds that give free Personal Accident Insurance.


For more information, please consult your Unit Trust Consultant.

Click the link below for more information on the differences between Money Market Fund vs Fixed Deposit.
http://highlevelrules.blogspot.com/2017/06/money-market-fund-vs-fixed-deposit.html