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.
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5 comments:
Hi Marcella,
I'm quite confuse abt your statement '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', ... arent we supposed to get RM7k with 7% dividend on 100K investment?
Pls advise me.
Thanks
Dear Sian Lee,
You will get RM7K (provided the dividend is 7%) if you have placed your 100K investment for 12 months in AS1M starting in September 2009 because this is a fixed rate unit trust, ie, one unit always costs RM1. So if you put your 100K investment in March 2010 that is 6 months before dividend declaration in September 2010, you will get half (6/12) of the annualised dividend rate ie 3.5K. Hope the explanation is clear and helpful.
Thanks, Marcella; your information is valuable.
Will continue to support your blog,... keep it up too.
regards,
Sian Lee
Heard you can update your passbook now with the unannounced dividend payout. I do not know whether this is true but a brother in law of mine has just updated his book and there is a dividend amount paid to his account. I do not know whether it is a bonus in paper form or real cash.
First issue-is this true? Secondly, is an unannounced dividend rate good or bad news?
Dear Family of Four,
Sorry late reply. Just back yesterday 26 Sept 2010 from a Royal Caribbean Cruise of the Mediterranean :)
Was informed while on the cruise that the dividend for AS1M has been declared at 6.38%, lower than the expected 7%. Transactions are currently suspended and you can only update your account on Oct 1 2010!
Looks like there is nothing particularly special about this unit trust. The Sime Darby debacle could have affected the amount of dividend somehow.
It is however good for people who have filled up all their other ASNB Unit trust accounts (permitted amount)and are looking for more returns by putting in this latest unit trust as they are about 3 times the amount of interest dished out by the banks!
So if you had invested 200K for one year then you will have a cool RM13,600.00. It is hard cash.And had you topped up last April 2010 with say another 100K, you'd get another RM3,400.00 with the final total of RM17,000.00. Not bad as you did not suffer from sleepless nights had you put your precious money in stocks... especially the tumbling technology stocks!
I am a little disappointed but unit trusts are only a fraction of my portfolios structured for diversification purposes like most investors.
Btw, updating of accounts can only be done on or after the specified date.
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