The Ringgit-cost Averaging strategy allows investors to focus on their long-term financial goals without worrying about the short-term market volatilities.

Stock markets are inherently volatile and to determine the best time to enter the market is a near-impossible feat. As renowned author of "The Intelligent Investor‟, Benjamin Graham aptly said, “If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting what‟s going to happen in the market."

That is why it is important for investors to not time the market. Instead, investors should adopt the Ringgit-cost Averaging (RCA) strategy to build wealth for the long-term.

RCA is a simple strategy of investing a fixed sum of money into a selected unit trust fund over a period of time regardless of the market cycles. By investing a fixed amount on a regular basis, investors can buy more units when the market is down and fewer units when the market is doing better. This will average out the cost of investment overtime and mitigate the volatility of stock markets.

In addition, investors who adopt the RCA strategy need not worry about the point of entry into the market. This is in contrast to those who opt to invest a lump sum – they are exposed to the risk of entering the market at or near its peak and subject themselves to unnecessary anxieties and mental stress as they try to pick market bottoms and market tops.

The RCA strategy is also more practical for those who do not have the means to invest a huge lump sum. The popular Malay saying “sikit-sikit lama-lama jadi bukit” aptly describes this strategy that allows investors to invest an affordable sum each month and gradually build their investment portfolio.

Knowing that it is difficult to predict the market movement, Raymond practises RCA by investing RM950 every month over a period of 10 years. By doing so, Raymond managed to average out the cost per unit held. This is because the RM950 he invested every month purchased more units when prices were low, and less units when prices were high.

^*Based on the net asset value (NAV) per unit1 of Public China Select Fund for the period from July 2009 to June 2019.

¹Adjusted for distribution of 0.50 sen per unit declared as of 31 July 2018.

Source: Lipper

Disclaimer: You are advised to read and understand the contents of the Master Prospectus 1 of Public Series of Funds dated 30 April 2019; and the relevant fund’s Product Highlights Sheet (PHS) before investing. The Prospectus has been registered with the Securities Commission Malaysia who takes no responsibility for the content, and neither should its registration be interpreted to mean that the Securities Commission Malaysia recommends the investment.

You should note that there are fees, charges and risks involved in investing in unit trust funds; and that the prices of units and distribution(s) payable, if any, may go down as well as up. Please refer to the Prospectus and PHS for information pertaining to the above. Past performance of a fund is not an indication of its future performance. Applications to purchase units must come in the form of a duly completed application form referred to in and accompanying the Prospectus. A copy of the Prospectus and PHS can be obtained from your attending unit trust consultant or nearest Public Mutual Branch/Customer Service Centre.

By doing so, Raymond managed to average out the cost per unit to RM0.2039, which is lower than the average NAV per unit over the period of 10 years. The RM950 he invests every month purchases more units when prices are low and less when they are high.

How to Get Started?

Investors can incorporate the RCA strategy into their investment through Public Mutual‟s Direct Debit Authorisation (DDA) or Regular Investment Instruction (RII).

DDA is an authorisation to the bank of investor‟s selection to deduct an amount determined by them to be transferred into the unit trust fund of their choice. For example, they can choose to transfer RM500 on a monthly basis or RM2,000 every

quarter. The amount and frequency of investments depend on their financial means and future goals.

Meanwhile, RII is an instruction that an investor gives to Public Mutual to switch a fixed number of units from his or her bond or money market fund to a specific balanced/equity/mixed asset fund.

Benefits of Adopting the DDA/RII strategy

• Convenient
  Having your investment contributions automatically deducted on a regular interval is an easy and convenient method of saving for future.


• Affordable
  Investing in Public Mutual via DDA starts from as low as RM100 monthly, while RII requires only a minimum of 200 units per month.


• Consistent
  DDA/RII ensures consistent investment. This is a great way to inculcate good savings habit for building wealth.


• No market timing involved
  With DDA and/or RII, your portfolio will grow steadily without having to time the market.

Building wealth by investing in unit trusts requires patience and persistence, so investors should adopt the DDA and/or RII strategy to make the most of their investments.

RCA Tips:

• Start as soon as possible to build a sizeable account overtime
• Stay invested for long-term regardless of price fluctuations
• Take advantage of DDA and/or RII

This article is prepared solely for educational and awareness purposes and should not be construed as an offer or a solicitation of an offer to purchase or subscribe to products offered by Public Mutual. No representation or warranty is made by Public Mutual, nor is there acceptance of any responsibility or liability as to the accuracy, completeness or correctness of the information contained herein.