Amanah Saham 1 Malaysia (AS1M) dividend in six month's time... time to make more?

Time sure flies! Before long PNB is going to declare the much awaited dividend for our investment in AS1M (Amanah Saham 1 Malaysia) launched in September 2009. Looking at the dividend rates of other PNB products and the fact that this one was put up at the instigation or direction of the Prime Minister, I am inclined to think and expect the dividend for AS1M to be rather generous.

I also see an opportunity to create wealth here by parking my current saving and fund derived from stock sale in AS1M. As it is a fixed rate unit trust, you would only expect  a proportion of the dividend based on the period parked. So if you were going to put in 100K now, you would get an extra income of about 3.5K  at seven percent dividend rate compared to 1K at two percent interest at the bank! How about that? Of course if you were risk-loving and  lucky, you would get much more than that at the stock market but times are not so good now. Shiller, the author of "Irrational Exuberance" and the man who predicted the dot com bubble burst has predicted a market correction soon so for me it means I need to seriously think of quitting the market pretty soon. Of course I am no savvy investor but my gut feeling is Shiller might be right.  For goodness sake! The man has studied market data since 1881 under different economic climates.

And so I will flee the market and gather my profit on SIME and seek the safe haven in AS1M and reduce my potential losses. I will also take out my saving from the bank and leave enough to maintain the set limit and plough them into AS1M, surely the dividend rate would not be below five percent. I have full confidence in PNB's ability to perform despite lacklustre market condition.

I really cannot wait to write about the outcome of my decision in six month's time. Yes, what is life without risks? This time I am taking a low risk approach though. And Prof Shiller, whatever the outcome of your prediction , I promise not to regret or blame you.

MANDARIN .. how I wish I could read the written words!

I have been receiving a number of comments on my blog articles in Mandarin. I thank those who sent them but sadly I could not read the long notes and respond to whatever they are trying to tell me and my other blog visitors. I am afraid to publish these notes as I really do not know what they are saying!

Please write in English so that I can interact with you all who have commented in Mandarin. I am sure you found something you like or do not like about my articles such that you feel that you need to comment. 

Thank you for visiting my blog and I welcome all your comments but am illiterate in Mandarin.

Restructuring my Portfolios to Compensate Losses

At the end of last year 2009 I looked at my then portfolios with alarm as  not only was I losing on paper but the stocks were also ghostly dormant. I decided that I needed to do things quite drastically like taking out my ASN shares and my other savings and sold off my non-performing mutual funds and plowed them all into blue chips such as AXIATA, TM , SIME and MAXIS. And after nearly six months, thanks goodness the decision has paid off. The first two bluechips are doing really,really well.

Up till last week my paper losses on the plantation counters have been compensated and now I notice that for the last six weeks the plantation counters are slowly picking up indicating the commodity prices are on the upward trend. I cannot wait to sell some of them off in preparation of buying the shares in the two Petronas companies to be listed before the end of the year. I am now more concerned about getting constant good dividends rather than just relying on share price upside.

I have heard of loan restructuring which usually involves extending the period of payment and lowering the premium in which case the person is virtually stuck to the loaner, looks like a modern day slavery to me. What people say of a certain  situation is  "dig some holes  to cover others", that is when you take out a loan to pay another loan. Yes this is another  form of restructuring. What a life!

That is not a path to wealth creation as anyone can see. One should only restructure when one does not have to borrow money from others, though in my case I did borrow some at no interest from my better half whom I promptly repaid when my position became positive. But you cannot do that with others, let alone banks and worst still loan sharks!

Restructure your portfolios by all means but you must  have initially created a diversified portfolio to do that. 

London Public transportation - A model of efficiency

What I love about London beside its theatres, museums and city parks is its seamless public transportation. Buses and tubes (underground rail) and regular trains seem to travel in tandem. You hop on one and off another and plan your destination earlier. You use only one card usually you pay in advance.

If you were to take the tube based on a daily rate you have to pay GBP1.20 per trip. So if you want to go to a destination, you have to make sure that it can be connected to the line you are travelling. Once you alight and go out of the station and then coming back to go to another station, you have to pay for another ticket. One week season ticket enable you to hop on and off any transport without having to pay for each trip. A great way for tourists to travel around London.

We had a pleasant surprise when the cost of travel to areas outside London is deducted according to zone, from the season ticket. We went shopping and sightseeing in Portsmouth and visiting friends in Wellyn Garden City about 2-2 1/2 hours from London Waterloo and King's Cross respectively. But you need to tell the ticket seller about your week season ticket otherwise he will charge you the full fare going out of London.

The bus in London is also numerous and run according to schedule. It is good to travel by bus as the route is sometimes direct rather than by tube in which you need to change line to arrive at your destination. When I was on a fellowship in London some years ago I mostly travelled by tube so I hardly saw the London scene such as the river Thames, bridges, iconic buildings such as Westminster, St Paul Cathedral etc. Some of the bus routes are really scenic. Of course you need to know which bus to go where and which is nearer to your place of stay.

Visionary planning is required to reach the level of such efficient transportation where not only the poor can travel on it but the middle class as well. I used to see my clinical professor travel to London on the tube every day. She parked her car at the train station nearest to her home in outer London and travel all the way by public transport.

In Kuala Lumpur it looks like only those without own cars travel on public transport which is still insufficient in numbers and is not run efficiently as well. There is no seamless ticket system yet except for touch n go for LRT . I am wondering why despite being independent for more than half a century we have not really bothered to raise the standard of public transportation to the level seen in countries like England. We are at the mercy of some unscrupulous taxi drivers who fail to see the big picture when they fleece especially the tourists.

When I went to London at Christmas 2008, I saw several top government servants who took their families on a holiday there and these are the people who advise the government on policy and planning. There are of course those Ministers and Deputy Ministers and their families and friends who have been going to London all these years. Don't they notice how good London public transportation is? Unless of course when they are there they are all chauffeur driven.