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You Need Time And Patient



A farmer planned to expand his farm by planting few papaya trees. He started to plant the papaya seeds one by one. Everyday, the farmer will watering its with the watering system built by the farmer and wait for the papaya trees to grow.
After few weeks, the papaya trees started to grow up. The farmer apply fertilizer regularly and he is very happy to see the trees had growing up. He knows that he will get the harvest in the near future. Day in day out, the farmer is doing the same thing by watering and fertilizing the plants. 

 One day, he sit down and look at the papaya trees... He started to have doubt on his plants, "Are the papaya trees really can grow the papayas in the near future?"
"Why there is no results after 3 months I had been working hard on it?"

 Everyday the farmer was thinking the same question...
One day, the farmer decided to chop off all the papaya trees because he think that the papaya trees won't give him any harvest. All the papaya trees been damaged by the farmer after growing for 6 months.

 What do you think about this short story?


 We know that to grow a papaya tree, we need at least 7 to 11 months until harvest after planting the seeds. Beside the watering, soil, applying fertilizer... the climate does play very important role in the process too.
Why the farmer chop off all the trees that he grown up with all his hard work in the past 6 months?
Do you think that the farmer is insane, silly and a little bit too impatient?

 Yes, exactly same thing happen to many unit trust investors. Many times, unit trust investors lose their patient and make silly decision. They stop their investment or regular top up plan after 3 years of investment. The don't have the patient, they see the result is not attractive and they stop everything and put back their money in bank savings account or fixed deposit.
What they do exactly the same thing the farmer did on the papaya trees.

 Farmer forget about the trees need at least 10 months to grow papaya,.
Investors forget the unit trust funds need at least 10 years to see the results (good returns).
Both of them stop the project after first few months / years of hard works.
Both of them are impatient, lost of focus, wasting their own efforts and time.

 Let me show you an example, please refer to the charts below, the chart is explaining on the performance of one unit trust equity fund in Malaysia from Sept 2001 to Aug 2018. (17 years)


 Source : MorningStar website

By looking at the chart, the equity fund is growing up in long term (10 years above). There is a fluctuation on the chart but it is still growing up. That is why the reason you need long term in unit trust investment. You are looking for an investment vehicle to achieve your long term goal. You need patient, you need to keep top up your investment regularly with your strong holding power. 


Source : MorningStar website

 The above chart show you the same fund but only 2 years performance (Aug 2016 to Aug 2018).
If an investor invest the same fund in this period, he or she might thing that the fund is not performed well in the past 2 years. The investor might think to stop the regular investment and put back the money into bank savings account or fixed deposit account to earn the yearly return of 3% to 4%.
The might become the farmer to chop all the papaya trees before getting any harvest. The investor might forget about their long term goal and investment objective.
Of course an experienced UTC (unit trust consultant) will explain the whole picture to the investors when the investors hesitate or in doubt on their investment portfolio / plan. The key is the investor has to come back to their UTC and give chance to both parties to communicate well.
Remember, unit trust investment is a long process. Both investor and UTC are playing a very important role in each of them.

 Lastly, I would like to remind all unit trust investor that investing in unit trust is like planting a fruit free. Beside a well blue plan, a good watering system, healthy soil... you need to be very patient and always no emotion on the process. You will get into emotion when you are in the process. Don't forget the weather always play the important role as well, which is the external factor risks during our unit trust investment process.

 Good luck and happy investing.
Disclaimer : The contents of this article is based on an experience shared by an UTC. It does not constitute recommendation to buy or sell unit trust funds.
Investors are advised to go back to individual UTC or mutual fund company to get more information about the risk & return on the unit trust funds.
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