I know I know most of us have got worse problems in our lives. But this is a nice dilemma to start 2007 with. As most of you would probably know, the market has been having a pretty good run in recent months. The KLCI has gone from a low of 886 points in mid June 2006 to close at 1127 as at 15 January 2007, a 27% increase over just 7 months.


A lucky friend of mine, Mike, invested a sum of RM30,000 at that very opportune time in June 2006 into the Public Ittikal fund, paying 82 sen per unit. Today the price is 98 sen per unit. This translates into a return of 20%. And this is net of sales fees and management charges. OK so the fund didn’t quite beat the market’s performance of 27% after taking into account the fund company’s fees and charges…but RM6,000 is still a great return for half a year’s investment.


So he calls me up to get advice on whether to sell off the units and cash out or….if not, then what to do. A very interesting dilemma indeed. The easy way out would be to sell it all off and put it all into FD or a capital guaranteed kind of deposit as Mike wants to do. Alternatively he’s also thinking ….there’s going to be another push leading up to Chinese New Year as has been the tradition (that’s when the greed monster in all of us kicks in)…maybe to hold on…! Taaaayyy! Wrong! We need to go back to the basics and consider the fundamentals. More on this in my next post.