Malaysia Financial Blogger | Financial Freedom Ideas | imDavidLee.Com

My Investing Strategy for 2012

Although the market outlook is uncertain due to the European debt crisis but I will also plan to make minimal stock investments. I will only invest my savings in high yield dividend stocks when the market plunges. I think property is the best hedge against inflation. Therefore, I will invest in a medium cost apartment soon. Besides, gold is another option to preserve our money and diversify our portfolio. It would be great if you can plan to allocate some funds for gold of 20g to 50g.

My recent strategy is to invest for income and capital preservation in view of the market volatility. For my unit trust investment, I will try to diversify by allocating one third of my portfolio into medium term aggressive fund. Meanwhile, for my stock portfolio, I will try to minimize my risk by investing in defensive counters which also provide dividends consistently.

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What’s Your Expected Salary Increment for Year 2012?

Just wondering, what’s your annual increment like? Normally, the increment can range between 5-20% which depends very much on individual performance, size, nature, and culture of the company.

However, for those skilled employees, the wages are still linked to experience, productivity and demand. Most of the organisations are still willing to offer attractive remuneration packages for candidates equipped with the desired skills. Thus, highly skilled and productive employees are more likely to earn more.

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Sensible Ways to Use Your Year End Bonus

Most of my friends plan to invest in property when received their year-end bonus. It would be great to go for property as its potential for capital appreciation and a healthy rental yield. I have been influenced by them and planned to use my future bonuses to invest in a residential property soon.

Besides that, I also plan to set aside about 30% of my monthly income to go towards stocks and unit trusts investment. According to Malaysian Employers Federation in its year 2011 MEF Salary Survey, it was reported that the year-end bonuses are reducing at the average 2.13 months forecast for executives in year 2012. Therefore, it’s time for us to spend it wisely during this recession period.

You would need to have a financial plan if you have a great pool of money coming your way and you are not sure how to put it to good use. You can do this on your own or consult financial advisor for assistance.

Tips on Using Your Spare Cash

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KLSE Market PE

As at 6th Jan 2012, our local market is valued at a P/E (Price per earning) of about 14.8x on 2012 earnings. In the other words, it is currently lower than the 10-year average P/E ratio of 16.7x. So, it would be good opportunity for investor to make own assessment and decision in the present market condition.

P/E ratio is commonly used by stock traders to value a company. It reflects whether a company’s share price is overvalued or undervalued.

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Managing Rising Cost of Living

The concern on the rising of living cost is a global one. The living cost essentially will involve food supply, housing and transportation cost. In fact, there’re various factors that contribute to the rise in the price of goods. It is worrisome as it hurts the people, especially the poor. Besides that, increasing the fuel price is another concern as when fuel costs higher, the transportation cost will also be increased and then lead to higher price of goods and services.

Thus, a reduction in the personal tax rates will appeal to high income earners working in Malaysia and it could attract more foreign talents to work as it will allow them to retain higher level of disposable income.

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