In Malaysia, the profit that you gain from selling off your properties will be taxed. This is known as real property gain tax (RPGT). However, the rate is different depending on the number of years you hold on to your property. See the chart below.
If you sell off your properties after 6 years, you will not be taxed at all.

Malaysians have the privilige of once a lifetime tax exemption from RPGT for only one residential property. So, make use of your privilege as a Malaysian.

Latest: RPGT has been abolished beginning from 1st April 2008.

As I read TheStar newspaper today, there is one article that I find quite interesting. However, I will write it from my point of view.

The subtitle begins with ‘it (the market) exists to serve and not to instruct’. In the beginning of 2008, analyst predicts that KL Composite Index (KLCI) will go beyond 1500 points, however, the market can be very crazy, and within 6 months, KLCI drops about 350 points. That is a very drastic drop.

2 investment gurus had their view of this market situation. George Soros attributed these phenomena as the ‘reflexive process’. The price change is due to a change in the company fundamental.

I prefer the way Warren Buffett interpret the current market situation. He holds to his principle that the market is manic-depressive. (As a pharmacist, there is certainly treatment for this manic-depressive disorder, such use using lithium). The market can be very crazy at times, and also be normal at certain times. So, when the market is very bad now, it provides us investor the opportunity to buy undervalued companies, especially blue chips companies. We have to calculate the intrinsic values, check out the company profiles, and much more.

In conclusion, do your studies well on the potential company and buy it when the price is right. Never ever time the market.

Fund Name: Public Far East Telco & Infrastructure Fund (PFETIF)

Fund Category: Equity Fund
Type of fund: Capital Growth

Fund Objective
To achieve capital growth over the medium to long term period by investing in securities, mainly equities, in the telecommunication, infrastructure & utilizes sectors in Far-East markets.

Asset Allocation
Equities: 75-90%
The balance will be invested in Fixed Income Securities and Money Market Instruments
(Min 2% in liquid assets).

Up to 98% of PFETIF’s NAV can be invested in selected foreign market which includes South Korea, China, Japan, Taiwan, Hong Kong, Philippines, Indonesia, Singapore, Thailand and other approved markets.

Benchmark
Dow Jones Asia Pacific Index & Dow Jones China Offshore Index.
Customized weight based on the following sectors:

• 40 % Telecommunication
• 30% Construction & Material
• 30% Utilities

This fund is more suitable for medium to long-term investor who has aggressive risk-reward temperament. Most important is, investor can withstand extended periods of market high & lows in pursuit of capital growth.

The initial investment amount is RM1,000. For offer period (8 Jul - 28 Jul 2008), they are offering service charge of 5% (usual is 5.5%).

My comment on this fund:
This is another fund that target the current undervalued telecommunication and infrastructure stock. It has been reported that Asia countries are expected to spend about US$1.8 trillion over the next 5 years, so there a good way to gain big profit there.

I am sure you will come across the term 'bull market' and 'bear market' when you read the finance or business section of the newspaper. This two represent the market trends. Just like in our life, there is happiness and sadness. I did some research over the internet and found out from Investopedia.com that the terms come from they way animals attack their opponents.

A 'bull market' is simply a market that is going upwards. Investor usually will have higher confidence, and the market will be quite active. The economy will be good, as lots of people will be making money from their investment.

A 'bear market', on the other hand, is simply a market that is going downwards. There is a strong pessimism among investor, causing the market to be quite dull. There will not be much active trading, as investor keep their cash, waiting for suitable time to invest.

This 2 terms is very important, before I get into the discussion of buying in bull and bear market.

I would like to share some good investment habits in this post. Sorry for not posting for quite some time as I went to Kuala Lumpur for personal reason.

1. Invest with your own money

Always invest with your own money, and not from borrowed money. This also apply to margin account. In the event of losing money, you just lose your money.

2. Invest only in business that you know well

There are lots of company listed in the share market. Choose only those companies that you know well. The best is you are working in related industry as you will know the happening in the industry.

3. Have a portfolio or record of your investment

This can be a simple notebook or Microsoft Excel record of your investment. This record can be use to trace back all your transaction and the money you have earned/lost.

4. Buy when the price is right

I learnt this concept by reading Phil Town's Rule #1 book. This concept is actually used by Mr Warren Buffett. You need to do your homework by calculating all the key figures (P/E Ratio, EPS, intrinsic value, and much more) before deciding the value that is fair for you. I will touch on this in my later post.

5. Never let emotion rule over your conscious decision

Lots of investor out there let emotion rule their decision. If you are sure that the particular stock is definitely good, don't let the market rumour or big guys out there to change your decision.