The Proper Mindset for Investing
Unit trust investors have a greater likelihood of achieving their long-term financial goals when they invest with the proper investing mindset, taking into account their risk appetite, return expectations and time horizon, among others.
Having the proper mindset when investing in unit trusts will allow investors to obtain a realistic perspective of their investments. Due to misconceptions about investing, some investors may be disappointed when their expectations and needs are not met. Investors who have realistic expectations pertaining to their investments are more likely to achieve their long-term financial goals. Below are several misconceptions about investing which investors should be aware of in their unit trust investments:-
One of the biggest roadblocks to successful long-term investing is impatience. Investors need to remind themselves that unit trusts are for the long term. As such, gains made from investing in unit trusts may take some time to be realised. Impatient investors, in their quest to chase returns, may not give their investments enough time to perform adequately. Some investors view unit trusts like stock trading and attempt to time the market by moving in and out of their funds.
In contrast, unit trusts are more suitable for investors seeking reasonable long-term returns. Being prepared to hold on to their unit trust investment for at least five years or more enables their funds to reap reasonable returns as the companies invested by the funds have sufficient time to grow their profits.
CONCLUSION Unit trust investments provide a good foundation for individual investors to fulfil their financial aspirations. However, investing in unit trusts with misconceptions and insufficient knowledge often leads to unnecessary disappointments for investors when their expectations are not met. Holding their investments for a sufficiently long period, understanding risks and returns of their investments, as well as having a clear goal are positive steps towards achieving their financial objectives. Unit trust investments can be rewarding in the long run, requiring both their patience and confidence in the investment process. Investors need to understand the concept, benefits and limitations of unit trust investing before they invest in a particular fund. Therefore, it is advisable that investors strategise and plan ahead for their financial goals. In doing so, they can have the proper mindset for investing and be able to establish a realistic perspective of their investments.
Investing is not nearly as difficult as it looks. Successful investing involves doing a few things right and avoiding serious mistakes.
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.
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*In terms of total retail fund size managed amongst private unit trust companies and PRS providers in Malaysia.Copyright © Public Mutual Berhad (197501001842 (23419-A)) ALL RIGHTS RESERVED.
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