Allianz Malaysia Berhad recently launched ‘Be A-Z ready for tomorrow’, an educational campaign to help Malaysians secure the retirement lives they dream of.
Planning for retirement is more than just ensuring you have adequate finances. The Campaign, will look to help Malaysians understand the importance of retirement planning, with a keen focus on protection and types of insurance coverage that is vital at every stage of life for a sound retirement life.
Allianz Malaysia believes that planning for retirement should encompass overall protection including medical, personal accidents, protection of assets, and having a good support system, in addition to having sufficient savings. Adequate protection is necessary as rising medical costs and unexpected events are likely catalysts for financial setbacks during one’s golden years.
Allianz Malaysia Chief Executive Officer, Sean Wang said a general rule of thumb is that a retiree would need two-thirds of their last drawn salary to retire comfortably.
“When we were studying the market, we learned that Malaysians’ top priorities for retirement are to live debt-free, have sufficient funds for medical emergencies for themselves and family, whilst maintaining their pre-retirement lifestyles. These things will be hard to achieve if people are only leaning on passive savings to finance their golden years.“
A study conducted by YouGov, a global public opinion and data company, showed that only 38 percent of Malaysians have taken proactive steps to plan for their retirement. In fact, when it comes to retirement planning, most are heavily dependent on passive modes such as saving accounts and EPF.
The study which focused on understanding Malaysian retirement priorities found that those intending to plan for their retirement were receptive to protection plans like Life and Medical insurance.
“When planning for retirement, you need to tick as many boxes as you can. Allianz Malaysia through our life and general insurance business offer the best of both worlds, and have crafted a complete suite of solutions to help Malaysians fully realised their retirement dream with no worries,“ he added.
For a Total Retirement Plan, that ticks every box, Allianz Malaysia recommends having sufficient protection such as critical illness coverage and medical coverage to safeguard yourself from events which may deplete your retirement funds and lead to financial catastrophe.
For example, our medical plan HealthInsured offers the most comprehensive medical coverage and comes with an option which many are not aware of. Customers can opt for a suitable deductible level to save insurance costs while being covered by an employer and remove the deductible upon retirement when there is no more employee benefit.
Besides that, an individual that has a significant other and/or has children should also consider a robust protection plan that protects the family like Allianz PrimeCover with high death benefit coverage or leaving a legacy with certainty to the loved ones with our Allianz Legacy Plus.
Malaysians should also consider having Personal Accident plans like Allianz Shield Plus to safeguard themselves in the event of injuries, disability or death, with Cashless Hopsital Admission and Discharge Benefit to further optimise their retirement protection.
In addition, Allianz Malaysia will also provide additional support to its customers through the Allianz We Care Community.
Via the We Care initiative, the Company collaborates with several partners from different sectors such as home care, pharmaceutical, and home medical devices among others, in offering our customers the complete retirement support they will need.
For more details on our ‘Be A-Z ready for tomorrow’ campaign, or realising your retirement dream, please visit allianz.com.my
About Allianz in Malaysia
The investment holding company, Allianz Malaysia Berhad, a subsidiary of Allianz SE, has two insurance subsidiaries – Allianz General Insurance Company (Malaysia) Berhad (“Allianz General”) and Allianz Life Insurance Malaysia Berhad (“Allianz Life”). Allianz General is one of the leading general insurers in Malaysia and has a broad spectrum of services in personal lines, small to medium enterprise business and large industrial risks. The GWP for general insurance business for financial year 2022 reached a mark of RM2.66 billion. Allianz Life offers a comprehensive range of life and health insurance and investment-linked products and for the financial year 2022, Allianz Life recorded a GWP of RM3.37 billion and is one of the fastest growing life insurers in Malaysia. Allianz Malaysia has 32 branches nationwide. In 2021, Allianz Malaysia won The Edge Billion Ringgit Club (BRC) Financial Services (below RM10 billion market capitalisation) award for the highest growth in profit after tax (PBT) over three years. The Company also bagged the Malaysia International Business Awards 2021 (Life Insurance category) and three awards at the Global Banking & Finance Awards: Insurance Brand of the Year Malaysia 2021; Best General Insurance Product Malaysia 2021; and Best Insurance Social Media Engagement Malaysia 2021.
To learn more about Allianz Malaysia, visit allianz.com.my
The Allianz Group is one of the world’s leading insurers and asset managers with more than 122 million* private and corporate customers in more than 70 countries. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life, and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 683 billion euros** on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage about 1.6 trillion euros of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we are among the leaders in the insurance industry in the Dow Jones Sustainability Index. In 2022, over 159,000 employees achieved total revenues of 152.7 billion euros and an operating profit of 14.2 billion euros for the group.
*Including non-consolidated entities with Allianz customers.
There are different types of traders, as you are aware, if you have ever traded stocks. You could belong to one of several groups of traders, depending on your risk tolerance level and financial objectives.
Before we begin looking at the different types of traders, let’s start by defining a trader and discussing how they differ from investors.
Someone who buys and sells stocks with the intention of making a quick profit is a trader. They achieve this by predicting how quickly stocks, currencies, and other financial assets will change in price.
In contrast, investors purchase securities to hold them for a long time and earn returns via dividends, interest, and capital growth.
Investors and traders are distinct in a number of ways. Their risk profiles are one of the key variations. Since they are attempting to capitalise on volatile short-term price movements, traders typically assume greater risk than investors.
On the other hand, investors have the financial resources to adopt a longer time horizon and is more tolerant to market swings.
The time horizon is another difference. Securities are often held by traders for far less time than by investors. Investors may keep onto a stock for years or even decades, whereas traders may just hold onto it for a few minutes or hours.
Finally, the kinds of stocks that traders and investors invest in vary. Since buying and selling quickly is simpler when a stock is highly liquid and has a high trading volume, traders frequently concentrate on these stocks.
Conversely, investors might be more drawn to stocks with solid fundamentals and the potential for long-term growth.
After knowing the difference between traders and investors, let’s look at the different types of traders.
1. Scalper
Traders that try to make tiny profits on many deals are known as scalpers. They often only keep stocks for a short period of time(a few seconds or minutes), and they frequently trade (dozens or even hundreds of times) in a single day.
Scalpers rely on minute price changes and utilise technical analysis to spot transient patterns.
2. BTST Trader
A “Buy Today Sell Tomorrow” (BTST) trader purchases equities today and sells them the following day. They use this to avoid having to take ownership of the shares, which would necessitate full payment.
BTST traders frequently focus on stocks with significant trading volume and solid momentum.
3. Swing Trader
Swing traders try to profit from swift market changes by holding onto securities for a few days or weeks. They employ fundamental and technical analysis to find equities that are likely to experience quick increases.
More risk is typically assumed by swing traders, as compared to scalpers and BTST traders.
In order to achieve long-term gains, position traders keep onto securities for weeks or even months. They frequently concentrate on stocks with solid fundamentals and prospects for long-term growth.
Position traders are more interested in the company’s overall health than they are in short-term price fluctuations.
4 Different Types Of Traders
In conclusion, there are many different types of traders, each with a distinctive strategy for the market. Regardless of whether you are a scalper, swing trader, position trader, or BTST trader, it’s crucial to know your risk tolerance and investment objectives before you begin.
By doing this, you can create a trading strategy that suits your needs and contributes to your market success.
Making investment decisions as an investor requires having a solid understanding of a company’s financial statements. A company’s financial health is captured in its financial statements, giving important information on its profitability, liquidity, and overall financial performance.
As an investor, here are the three things to look for in financial statements, so you know how to use them to make wise investment decisions.
1. Income Statement/Statement Of Profit Or Loss
One of the first things to look for in financial statements, is to look at income statement. It is the one of the most important things to look for in financial statements.
The income statement provides an overview of a company’s revenues and expenses for a given time period. The financial statement details the company’s revenue and operational costs, taxes, and interest payments. Net income, a gauge of a company’s profitability, is the difference between sales and expenses.
Investors should pay particular attention to the income statement’s revenue and net income data. A company’s revenue should be consistently rising as this shows that its goods and services are in high demand. A higher net income is also encouraging because it shows the business is making more money.
Investors should, however, consider the margins, which reflect how much profit the company makes in relation to its revenue, such as the gross profit margin and net profit margin. A business with poor margins can have trouble controlling costs or face fierce competition.
The second in the number of things to look for in financial statements is the balance sheet. The balance sheet is the second financial statement that investors ought to study.
A company’s assets, liabilities, and equity are shown on the balance sheet at a particular time. The financial statement reveals the firm’s assets and liabilities and the percentage of equity shareholders own in the business.
The balance sheet’s sections for assets and liabilities should catch investors’ attention. The assets section lists the company’s possessions, including real estate, machinery, and cash. Along with their valuation, investors should consider the asset’s composition. For instance, a business with a lot of cash and liquid assets might be more financially stable than one with a lot of fixed assets that might be challenging to sell fast.
The company’s debts are listed under the liabilities section, including loans, accounts payable, and taxes. Investors should take note of the liabilities’ makeup as well as their maturities. For instance, a business with a lot of short-term debt can be more susceptible to cash flow issues than one with long-term debt that can be repaid over time.
The third on the list of things to look for in financial statements is the cash flow statement. The cash flow statement details how much money the business has made and spent during a given time period. Operating, investing, and financing operations are the three areas into which the cash flows are divided in the statement.
Investors should concentrate their attention on the statement of cash flows’ operating operations section. The amount of cash the company has made from its core business operations is displayed in this section. A company’s operations produce cash when there is a positive cash flow from operating activities, which is a good sign. A corporation may burn cash to fund its operations if its cash flow is negative.
The statement of cash flows’ sections on investing and financing operations deserve special attention from investors. The amount of money the company has spent on investments and capital expenses, such as buying property and equipment, is displayed under investing activities.
The amount of money the company has acquired or paid back through debt and equity financing is displayed in the financing activities section. Investors should consider whether these actions align with the company’s overall strategy and financial objectives.
In conclusion, it is critical to comprehend a company’s financial statements before making investing choices. In particular, those are the three things to look for in financial statements: Income Statement, Balance Sheet and Cash Flow Statement.
It offers important information about a company’s profitability, liquidity, and overall financial performance. Investors should concentrate on the company’s revenue, net income, margins, assets, and liabilities.
In today’s society, transparency has become an essential aspect of any industry, including the third sector. This is especially true for non-profits, as transparency plays a critical role in building trust and credibility with their stakeholders.
The ‘Transparency Score Of Malaysia’s Foundations’ developed by Wiki Impact aims to highlight Malaysia’s foundations that overcommunicate and build a shared public narrative to encourage others to do the same. The comprehensive rating system evaluates the transparency, frequency, and credibility of communications made by 1,567 registered foundations to the public.
Based on the rating system, Wiki Impact reviewed publicly-available data, information, and reports to assess the transparency of the foundations based on four key main criteria including publicly-available financial reports, publicly-available impact reports, a current and active website, and an updated social media presence.
Why Is This Report Necessary?
The expectation of trust from the public in non-profits is growing and many are evaluating them based on publicly available information. Terence Ooi, Co-founder of Wiki Impact says that “By providing open and honest communication about their operations, financials, and impact, non-profits can assure their donors, beneficiaries, and the public that they are accountable and committed to achieving their mission.”
Apart from that, transparency helps prevent the misuse of funds, promotes ethical practices, and ensures that non-profits are fulfilling their social responsibility. Ultimately, transparency strengthens the credibility and reputation of non-profits, leading to increased support and a positive impact on the community.
“Our report provides clarity for donors to be more informed about foundations that they are supporting or may potentially support. When you are informed accurately, generosity grows,” Ooi added.
“It is important to note that under current laws, foundations are not required to disclose their annual, financial, and impact reports publicly. Also, they are not required to publicly disclose their board of directors, financial statements or amounts disbursed. In contrast, this report seeks to recognize foundations that over-communicate and develop a shared public narrative. By doing so, we hope foundations will be more inclined to communicate the good work they do,” said Ooi.
Report Findings
The report rated 1,567 foundations in Malaysia based on their transparency scorecard, with 32 foundations receiving a minimum A rating, indicating a score of 75% or above. These foundations have publicly available information about their programs and financials and have provided information about their trustees or board on their website. They also regularly update their social media accounts.
Among the foundations with high transparency scores are WWF Malaysia, TFM Foundation, Yayasan Hasanah, Yayasan Sejahtera, Arba International Waqf (L) Foundation, MyKasih Foundation, Yayasan Selangor, and YTL Foundation.
The report also shows that half of the foundations in Malaysia achieved a transparency score of only 10%, indicating that they do not have publicly available information about their programs and financials, or information about their trustees or board on their website.
Other interesting findings include:
Almost half the number of foundations were located in the Klang Valley area, with 25.27% in Kuala Lumpur and 20.17% in Selangor.
Education is the most focused cause, with 251 foundations working to improve education in Malaysia, while Animals Welfare was the least focused area, with only 3 foundations.
In terms of digital presence, 37% of foundations do not have a published website. Only 28% of foundations posted an update on their social media within the past 3 months since Feb 2023, while 131 foundations have not posted an update for over a year.
The report also highlights that only 2.94% of 1,567 foundations released an Impact Report within the past 5 years (since 2017), and only 31 (2.3%) foundations have ever published a financial report publicly.
“The strength of this report lies in its independence, which helps remove layers of impartiality. Our report is not funded by any foundations or for-profit companies. A team of independent volunteer fact-checkers reviewed the work prior to publication, and all data was sourced from publicly available sources,” added Ooi.
Wiki Impact hopes that the “Transparency Score of Malaysia’s Foundations” report will encourage more foundations to communicate openly because transparency is no longer an option but a necessity for non-profits to succeed in their endeavours.
Wiki Impact is a research and communications hub focused on Malaysia’s impact-driven work and social issues. We create social impact through compelling data and evidence-based stories that inspire, inform, invoke emotion and invite participation and conversation. Wiki Impact serves changemakers by highlighting and amplifying their work via impact news, announcements and job postings.
The US dollar is the world’s most widely used currency, accounting for about 60% of global trade transactions. However, the dollar has been losing ground against other major currencies such as the euro, the yuan and the ruble in recent months. This has raised some concerns among investors who hold dollar-denominated assets or trade with dollar-based partners.
So you are wondering how to invest in a volatile dollar market? In this article, I will explain why the dollar has been weakening, how it affects different asset classes such as gold and stocks, and what strategies you can use to protect your portfolio and take advantage of the opportunities in a volatile dollar market.
Invest In A Volatile Dollar Market: Why Is The Dollar Weakening?
Before we look at how to invest in a volatile dollar market, we should look at what causes the dollar to weaken. The dollar’s weakness can be attributed to several factors, including:
The Federal Reserve’s accommodative monetary policy, which has kept interest rates near zero and expanded its balance sheet through quantitative easing. This has increased the supply of dollars and reduced their value relative to other currencies.
The fiscal stimulus measures enacted by the US government to support the economy during the COVID-19 pandemic, which have increased the budget deficit and the public debt. This has raised doubts about the long-term sustainability of the US fiscal position and its creditworthiness.
The recovery of the global economy from the pandemic-induced recession, which has boosted the demand for riskier assets such as emerging market currencies and commodities. This has reduced the demand for safe-haven assets such as the dollar.
The geopolitical tensions between the US and its rivals such as China and Russia, which have undermined the confidence in the US leadership and its role as the global reserve currency.
Invest In A Volatile Dollar Market: How Does A Weak Dollar Affect Different Asset Classes?
A weak dollar has different implications for different asset classes, depending on their exposure to currency fluctuations and their sensitivity to inflation. Here are some examples:
Gold
Gold is traditionally seen as a hedge against inflation and currency devaluation, as it retains its purchasing power over time. Therefore, gold tends to benefit from a weak dollar, as it becomes cheaper for foreign buyers and more attractive as an alternative store of value. However, gold is also influenced by other factors such as supply and demand dynamics, investor sentiment and opportunity cost.
For instance, gold underperformed the dollar in 2022, despite high inflation, due to lower demand from central banks and investors who preferred higher-yielding assets. Gold performed slightly worse than the US Dollar in 2022, with a return of -0.22%, while the US Dollar outperformed Gold by +7.87%. However, YTD performance has been impressive for Gold, as it gained +9.06% while the US Dollar lost -1.88%.
Stocks
Stocks are generally positively correlated with a weak dollar, as it boosts the earnings and competitiveness of US companies that derive a large portion of their revenues from overseas markets. It also makes US stocks more attractive for foreign investors who can buy them at a lower price. However, not all stocks benefit equally from a weak dollar.
For instance, companies that rely heavily on imported inputs or face strong competition from foreign rivals may suffer from higher costs and lower margins. Moreover, stocks are also affected by other factors such as earnings growth, valuation and market sentiment.
Bonds
Bonds are generally negatively correlated with a weak dollar, as it erodes the real value of their fixed income streams and makes them less appealing for foreign investors who face currency risk. It also increases the likelihood of higher inflation and interest rates, which reduce the present value of future cash flows and lower bond prices. However, not all bonds react similarly to a weak dollar.
For instance, short-term bonds are less sensitive to interest rate changes than long-term bonds. Moreover, bonds are also influenced by other factors such as credit quality, duration and liquidity.
What Strategies Can You Use To Invest In A Volatile Dollar Market?
Given the uncertainty and volatility in the currency market, it is important to adopt a diversified and flexible approach to investing. Here are some strategies on how to invest in a volatile dollar market, so that you can use to protect your portfolio and take advantage of the opportunities:
Diversify your currency exposure
One of the ways to invest in a volatile dollar market, is by holding assets denominated in different currencies or investing in currency-hedged funds or ETFs. This lets you reduce your exposure to currency risk and benefit from diversification benefits. You can also use currency derivatives such as futures or options to hedge your existing positions or speculate on currency movements.
The US Dollar has been weak this year, with a year-to-date (YTD) performance of -1.88% as of April 2023. This contrasts with the same period last year (Jan – Apr 2022), when the US Dollar appreciated by +6.03%. The overall performance of the US Dollar in 2022 was strong, as it gained +7.87% in value.
Adjust your asset allocation
Next on how to invest in a volatile dollar market, is by adjusting your allocation among different asset classes or sectors based on their relative performance and outlook in a weak or strong dollar environment, which lets you enhance your returns and reduce your risk. For instance, you may want to increase your exposure to gold or commodities if you expect further dollar weakness or inflationary pressures. Conversely, you may want to reduce your exposure to bonds or emerging markets if you expect a stronger dollar or higher interest rates.
The weakness of the US Dollar has benefited other major currency pairs, such as the EUR/USD, which rose by +2.94% (YTD) as of April 2023. This is a reversal from the same period last year (Jan – Apr 2022), when the EUR/USD fell by -5.78%. The overall performance of the EUR/USD in 2022 was poor, as it declined by -5.86% due to inflationary pressures on the Euro.
Seek professional advice
Final tip on how to invest in a volatile dollar market, is by consulting with a qualified financial advisor or planner who can assess your risk profile, investment objectives and time horizon. All this so you can get personalized recommendations on how to invest wisely in a volatile dollar market. You can also benefit from their expertise and access to various tools.
Smart investor should diversify their portfolio and allocate their assets according to their risk appetite and profit potential with such traditional assets. Financial literacy is essential for an investor to grow their wealth.
Mukhriz Mangsor, ACSI, MSTA, CFTe is currently the Head Global Market Strategist at Quantdynamic Research Company. His expertise includes financial education, financial institutions, and property trading with clients, including Brunei, Canada, Malaysia, Singapore, and the United States firms.
Initial Public Offering (IPO) is the process of selling shares of a private company to the public for the first time. Companies usually go public to raise funds for their expansion or to provide an exit opportunity for their early investors.
IPOs are highly sought after by investors because they can offer significant returns, especially if the company is successful. However, getting an allocation in an IPO can be a challenging task, but you can increase your chances of getting an IPO via MITI.
But What Is MITI?
The Malaysian government, through the Ministry of International Trade and Industry (MITI), provides a special avenue for Bumiputera investors to apply for IPOs. This special avenue is called the MITI Application, and it is only available to Bumiputera investors.
Source: Oppstar Prospectus
Bumiputera investors who apply for IPOs through MITI have a higher chance of getting the IPO via MITI application than through the normal public application process. The allocation of shares for Bumiputera investors through MITI is usually around 12% of the total shares allocated for all investors.
In contrast, the allocation for public applications is typically around 2.5% to 5%.
When applying for IPOs through MITI, Bumiputera investors can enjoy several benefits. Firstly, they can apply for IPOs first and pay later. This is because MITI allows investors to secure their allocation before making any payments, which is particularly advantageous if they do not have enough funds available at the time of application.
Secondly, Bumiputera investors only compete among themselves, which reduces the level of competition for the shares. This increases their chances of getting an allocation, particularly for popular IPOs that tend to be oversubscribed.
Thirdly, they can apply for IPOs earlier than through the normal application process, which means that they have a higher chance of securing shares at a lower price. Lastly, the higher allocation of shares for Bumiputera investors through MITI increases their chances of getting an allocation compared to applying through the public application process.
Disadvantages Of Applying IPO Via MITI Application
However, there are also some disadvantages to applying for IPO via MITI application. Firstly, investors cannot read the final prospectus of the company before applying. This can be a disadvantage because the prospectus contains important information about the company’s financials, business strategy, and risks, which can be useful for making informed investment decisions. Investors may have to rely on the preliminary prospectus, which may not contain all the relevant information.
Secondly, some IPO prices may not be available when applying for IPO via MITI application. This means that investors may not know the final price of the IPO until after they have applied. This can be a disadvantage if the final price significantly differs from the initial price range, affecting the investor’s investment decision.
Thirdly, the waiting time for the IPO shares to be allocated is usually longer than the normal application process, which can be a disadvantage if the investor needs the funds for other purposes or if the market conditions change significantly during the waiting period.
Lastly, investors who do not proceed with their application after being allocated shares may be subject to penalties, which can affect their creditworthiness and investment reputation.
In conclusion, the IPO via MITI application is a special avenue for Bumiputera investors to apply for IPOs in Malaysia. Applying through MITI can increase their chances of getting an allocation compared to the normal public application process. However, there are some disadvantages to applying through MITI, such as not being able to read the company’s final prospectus before applying and longer waiting times for the IPO shares to be allocated.
Investors should weigh the benefits and disadvantages before deciding to apply for IPO via MITI application or through the normal public application process.
A wonderful option to invest your money and increase your wealth is through the stock market. Success is not always simple to achieve, though. Despite their best efforts, many investors continue to lose money.
Here’s five reasons why we lose money in the stock market.
1. A Lack Of Study
The primary reason why we lose money in the stock market, is because we don’t conduct enough research before making an investment. Without thorough study, it’s possible that we won’t fully comprehend the business in which we are investing in, the sector in which it works, or the risks associated with it.
The more information you have about the business, the more prepared you will be to make wise investment choices.
Spend time studying the companies and their financials before investing in any stocks. To determine how financially stable it is, look at its balance sheet, income statement, and cash flow statement. Get a sense of the company’s overall performance and prospects for the future by reading news articles, analyst reports, and industry publications.
The next reason why we lose money in the stock market is because we tend to make rash decisions and allow emotions to control them. It’s simple to get sucked into the hoopla around a hot stock or to freak out when the market declines.
But making investment decisions based on feelings rather than logic can be disastrous. Instead, make conclusions based on study and analysis while maintaining composure. Create a long-term investing plan and adhere to it, even when the market is declining.
Keep in mind that stock market investment is a marathon, not a sprint.
3. A Lack Of Diversity
Investing all of one’s capital in one or a small number of stocks is a common error made by novice investors. This technique has huge risks as well as high potential returns. You run the risk of suffering a substantial financial loss if the stock(s) you buy perform poorly.
Reducing stock market risk requires diversification. Invest in a variety of stocks from various sectors and companies, as well as in other asset classes such as bonds and real estate. This way, you have backup investments in case one doesn’t do well.
Another typical error that can contribute to why we lose money in the stock market, is by attempting to time the market. Investors may attempt to purchase low and sell high, but doing so is very challenging, if not impossible.
Focus on the long term rather than trying to time the market. Invest in businesses you are confident in and that have a proven track record of expansion. If you’ve made investments in strong companies with sound fundamentals, they’re likely to recover over the long run even if the market declines temporarily.
5. High Brokerage Fee
The final reason why we lose money in the stock market, is due to the exorbitant fees that might reduce our investment returns and cause losses. For trading, account maintenance, and other services, some brokers and investing platforms charge a certain fees.
Research costs are charged by various platforms and brokers before you invest. Look for inexpensive choices that lets you make investments with few costs but provide excellent services.
Some brokers have different products with different fee structures, so make sure you choose the right product that is suitable to your trading strategies and style. Not all cheap brokerages are good and not all expensive brokerages are useful to you.
In conclusion, investing in stocks can greatly increase your wealth, but you should proceed carefully and adopt a long-term perspective. To reap the rewards, do your homework, don’t make snap decisions, diversify your investments, keep an eye on the long term, and hunt for affordable options. You may improve your chances of making money and preventing losses in the stock market by paying attention to these suggestions.
Now you know why we lose money in the stock market, let’s do our best to avoid it.
The Securities Commission Malaysia (SC) has introduced a framework that will benefit dealer’s representatives (DRs) in the capital market. The new framework, which took effect on 14 April 2023, will allow them to expand their scope of activities and roles beyond just dealing in securities.
The SC recognises the importance of promoting competition and enhancing the quality of services in the capital market. In this regard, this framework will also provide DRs greater flexibility to develop their careers and meet the evolving needs of investors.
In addition to facilitating share transactions for their clients, DRs who meet certain requirements can apply for additional licenses to engage in a variety of activities, such as investment advice, financial planning, restricted dealing in unit trust and dealing in private retirement schemes. The new framework also removes the requirement for DRs to be employed on a full-time basis.
These flexibilities are only available to DRs who have been licensed for more than five years and meet the competency requirements for the relevant regulated activity. To ensure effective supervision and oversight of DRs performing these additional regulated activities, they are required to be undertaken within the same broking firm or within its group of companies.
The expansion of DRs permitted activities is facilitated through amendments to Chapter 4 of the Licensing Handbook. The Licensing Handbook and accompanying FAQ are available on the SC website here.
About the Securities Commission Malaysia
The Securities Commission Malaysia (SC), a statutory body reporting to the Minister of Finance, was established under the Securities Commission Malaysia Act 1993. It is the sole regulatory agency for the regulation and development of capital markets. The SC has direct responsibility for supervising and monitoring the activities of market institutions, including the exchanges and clearing houses, and regulating all persons licensed under the Capital Markets and Services Act 2007. More information about the SC is available on its website at www.sc.com.my. Follow the SC on twitter at @SecComMy for more updates.
In the first article in our series, we took a closer look at the current financial attitudes and behaviours of millennials and Gen Z Malaysians. Based on findings from ICMR’s nationwide survey, we highlighted that the investment behaviours of young investors could be grouped into three categories linked to differences in their income, financial knowledge or confidence, and risk tolerance.
Beyond these individual differences, it is also important to understand how broader social trends and structural issues could shape investment preferences and behaviours. This includes media consumption trends, as young investors increasingly turn to digital sources of information, which could impact how they make financial and investment decisions.
Online Channels Are Preferred Sources
The Internet or online resources are the most popular source of information on investment products, reported by 69% of respondents in ICMR’s survey. Within this group, Facebook/Instagram (75%), websites/blogs (68%), and YouTube (65%) are the most frequented online platforms. The preference for online sources of information is particularly more prevalent among those under 30 years old.
These findings are unsurprising as the younger generations grew up during the Internet age and feel more comfortable conducting their online lives. Millennials generally led the adoption of new technology, and a McKinsey study in the Asia Pacific found that 50 to 60% of the primary influence in brand decisions for Gen Zs comes from social media and online sites.
Figure 1: Source of Information (Data Source: ICMR)
But while online platforms like Instagram and YouTube provide an opportunity to reach out directly to millennials and Gen Zs, they do not always reach those who, ironically, may need this information the most. Although the Internet is abundant with resources catered for different levels of financial literacy, most of these resources still require users to seek out this information actively.
“I know there [are] a lot of videos out there, but I find most of it boring or too long. I tune out after a few minutes. I just want something easy to understand. It helps if I don’t have to seek it out actively.”
– Haris, 25, journalist
Confirmation Bias In New Social Networks
In contrast to other social platforms, TikTok delivers content to its users using a recommendation system. What users see on their TikTok feed is less determined by who they follow but curated by an algorithm based on their interests. Some respondents interviewed by ICMR mentioned they came across financial education videos on TikTok even without actively seeking financial information online.
Social networks that deploy recommendation systems thus provide a promising opportunity to reach target segments that do not actively seek out financial information. Nonetheless, these same segments might not have the right skills or knowledge to assess the trustworthiness of all the financial content they come across and determine the most suitable information for themselves.
For instance, the #fintok hashtag on TikTok (which has had more than 500 million views at the time of writing) includes everything from basic budgeting tips to advice on specific stock picks. Just as too little information can impact decision-making, too much information can lead to selective information filtering due to confirmation bias or the tendency to reinforce pre-held beliefs.
“I’ve never looked for financial information before, I don’t consider myself very financially literate. But I saw a TikTok video on money-saving tips and then slowly started watching more personal finance content there. My friends and I also started talking about property investments and passive income after watching it on TikTok.”
Farish, 30, Cafe manager
#FinTok, also known as Financial TikTok, is a subcommunity of TikTok users who provide advice, education, and discussions on personal finance via short video clips (Image Source: SECCL)
By applying behavioural concepts to financial decision-making, we can better understand how investors become susceptible to scams. Social preferences refer to the notion that community members’ and peers’ savings and investment decisions have a causal effect on individual decisions through social interactions or pressures for conformity, acceptability, and social identity.
Leveraging social preferences might help engage investors but can make them more susceptible to misinformation and herding behaviour. Herding behaviour is when people do what others do instead of using their information or making independent decisions. This could lead to individuals being involved in scams, misled, or creating investment bubbles.
For example, Malaysia’s Ombudsman for Financial Services (OFS) said in 2020 that the rise of financial scams is due to scammers using social engineering tactics to exploit victims’ financial insecurities during the pandemic. Since social networks provide access to a wealth of personal information, scammers use this data to target and manipulate consumers with higher vulnerability easily.
In behavioural economics, social preferences describe the human tendency to care about not only one’s material payoff but also the reference group’s payoff (Image Source: iStock / oatawa)
Developing Financial Literacy As The Way Forward
In today’s fast-paced and information-overloaded environment, it is becoming more important for young investors to improve their financial literacy proactively. The rise of non-traditional and unregulated sources of information means investors need to take ownership of their financial decisions with the right skills, knowledge, and tools to make better investments.
Fortunately, many online financial courses and training are available for individual capacity-building. Leveraging behavioural insights can also provide new ways to think about managing finances. Developing an awareness of their biases and how they can be exploited can help young investors build safer, more strategic long-term investing habits.
This article is part of a content series by the Institute for Capital Market Research (ICMR). Follow ICMR’s Facebook page to stay updated on behavioral tips and insights for better investing habits. To learn more about ICMR’s research on millennials and Gen Z, visit www.icmr.my or download the full report.
About the Authors
Datin Aida Jaslina Jalaludin, Head of Research, ICMRNadhirah Ibrahim, Research Analyst, ICMR
