Employ Risk Management Strategies
With any investment, be it stock trading, real estate or business, it is important that you understand what the risks are and how to minimise your exposure to these risks. This process is known as 'Risk Management'.
The Three Elements Of Risk Management
1. Spread Your Risk: Don’t Put All Your Eggs In One Basket
Spreading you risk is as simple as not putting all your eggs in the one basket. This is called diversifying your portfolio.
Spread your capital so there is never more than 20% in a single stock.
Don’t however take this to extremes and over-diversify by investing in too many stocks at once. You cannot expect to outperform the market if your portfolio closely matches the market. A rule of thumb is to limit your portfolio to between 5 and 10stocks.
2. Plan Your Exit: What Is An Acceptable Risk?
Amateur traders buy a stock and their focus is to hope it increases in price. If it goes down, they continue to hold in the hope the price will recover. When a professional buys a stock they recognise that success is a probability, not a certainty. At the time of entering the trade they establish an Early Exit price. If the stock falls past this point the good investor will immediately exit and never run the risk of making a large loss.
Maintaining your capital is fundamental to successful trading. If you invest in a stock and make a large loss, then it is impossible to consistently profit from the stock market. Having incurred a large loss, you must now make a large profit just to break even. The key to successful trading is keeping your losses small.
3. Stop The Loss: Don’t Drive Without A Seatbelt
The second must sell signal is a Stop Loss. Just tracks the highest price reached by the share since purchase. If the share falls by more than 10% from this price, it is time to sell. We suggest 10% - you can change this depending on your trading style. Too small a percentage and it will get you out too early. Make the percentage too large and you give back too much of your profits before exiting. Start with a 10% fall and see what you feel comfortable with.
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© 2009 Bursa Malaysia Berhad. All rights reserved. Please read our disclaimer.
Saturday, November 21, 2009
. Start With A Financial Plan
Trading stocks should be treated as a business venture - it will require time, knowledge and money to succeed. Your Financial Plan represents your roadmap to success.
Decide Your Financial Objectives.
If you are a 60 year old looking for cash flow to fund your impending retirement, your priority would be to generate an income stream rather than large asset value growth.
If you are a 25 year old who wants to begin to invest, capital growth would be the priority, rather than income stream.
Your financial objectives will determine whether you trade liquid shares or not.
Decide Your Risk Level.
Decide on your risk level and the types of investments you can afford to make will be set. Remember, the higher the return you want to achieve, the higher the risk.
Low Risk Level
I am not very comfortable with risk and will invest in fixed interest/capital guaranteed securities (government bonds, bank term deposits).
Medium Risk Level
I can take on a moderate amount of risk (blue chip Industrial and Banking and Finance sector shares).
High Risk Level
I am comfortable with risk. I am seeking a high return and prepared to evaluate companies early in their growth phase (recently listed resource companies).
How Do You Fund Your Investments?
For most of us, we do not have immediate access to a large pool of ready savings. Using the equity you have in a property to fund your share portfolio is a common approach.
EPF savings is also an effective vehicle for providing funds for investing and the majority of Malaysians have access to these funds.
Most major banks and insurance groups offer margin loan facilities. This is where you start a portfolio with savings and then use this portfolio as security to borrow further funds to buy more shares.
In most instances, the problem is not acquiring funds to start a portfolio, it is having the knowledge to invest with confidence.
Trading stocks should be treated as a business venture - it will require time, knowledge and money to succeed. Your Financial Plan represents your roadmap to success.
Decide Your Financial Objectives.
If you are a 60 year old looking for cash flow to fund your impending retirement, your priority would be to generate an income stream rather than large asset value growth.
If you are a 25 year old who wants to begin to invest, capital growth would be the priority, rather than income stream.
Your financial objectives will determine whether you trade liquid shares or not.
Decide Your Risk Level.
Decide on your risk level and the types of investments you can afford to make will be set. Remember, the higher the return you want to achieve, the higher the risk.
Low Risk Level
I am not very comfortable with risk and will invest in fixed interest/capital guaranteed securities (government bonds, bank term deposits).
Medium Risk Level
I can take on a moderate amount of risk (blue chip Industrial and Banking and Finance sector shares).
High Risk Level
I am comfortable with risk. I am seeking a high return and prepared to evaluate companies early in their growth phase (recently listed resource companies).
How Do You Fund Your Investments?
For most of us, we do not have immediate access to a large pool of ready savings. Using the equity you have in a property to fund your share portfolio is a common approach.
EPF savings is also an effective vehicle for providing funds for investing and the majority of Malaysians have access to these funds.
Most major banks and insurance groups offer margin loan facilities. This is where you start a portfolio with savings and then use this portfolio as security to borrow further funds to buy more shares.
In most instances, the problem is not acquiring funds to start a portfolio, it is having the knowledge to invest with confidence.
Understanding Indices
A stock market index is a single number calculated from the prices of many different stocks. Index is also called indices when you talk about more than one of them. Indices are used as benchmarks of stock performance for portfolios like mutual funds.
Some investment funds (index funds) manage their portfolio so that their performance mirrors (tracking) the performance of a stock market index or a sector of the stock market.
For example, when you hear that the Consumer Price Index (CPI) for say, January to December 2005 increased by 3.0% to 109.1 compared with that of 105.9 in the same period last year. This tells you that the change in retail prices paid by households for goods and services increased in that period. CPI is designed to provide a broad measure of changes in retail prices.
An index is a tool which enables investors to measure the performance of a group of stocks from a defined market. It can form a benchmark for active or passively managed portfolios covering the particular market. Being part of an index is also a status symbol for the constituent companies and trading of constituent shares obviously supports the share price. Indices also allow the creation of investment products that give investors exposure to markets or groups of stocks which can help in markets where there are barriers to investment.
Stock market indices may be classed in many ways. A broad-base index represents the performance of a whole stock market— and reflects how investors feel about the economy. The most regularly quoted market indices are broad-base indices comprised of the stocks of large companies listed on a nation's largest stock exchanges, such as the American Dow Jones Industrial Average and S&P 500 Index, the British FTSE 100, the French CAC 40, the German DAX and the Japanese Nikkei 225.
The Use of Indices
Stock indices have developed in the last twenty years to become much more than economic indicators (market barometer) and with growing developments in financial markets, more technical functions of indices have been brought to the forefront.
Stock indices are used by investors and fund managers as one of the many tools to evaluate the performance of a stock market The application of indices is now much wider including the use of indices as benchmarks for investor portfolio comparisons and as underlying components of financial products, for example Exchange Traded Funds (ETFs) and derivatives.
Bursa Malaysia Indices
The existing Bursa Malaysia indices are calculated using the market capitalisation weighted method.
Market capitalisation means the total value of a listed companies shares based on the current market price. Therefore the bigger companies are given higher weightage compared to the smaller companies.
A stock market index is a single number calculated from the prices of many different stocks. Index is also called indices when you talk about more than one of them. Indices are used as benchmarks of stock performance for portfolios like mutual funds.
Some investment funds (index funds) manage their portfolio so that their performance mirrors (tracking) the performance of a stock market index or a sector of the stock market.
For example, when you hear that the Consumer Price Index (CPI) for say, January to December 2005 increased by 3.0% to 109.1 compared with that of 105.9 in the same period last year. This tells you that the change in retail prices paid by households for goods and services increased in that period. CPI is designed to provide a broad measure of changes in retail prices.
An index is a tool which enables investors to measure the performance of a group of stocks from a defined market. It can form a benchmark for active or passively managed portfolios covering the particular market. Being part of an index is also a status symbol for the constituent companies and trading of constituent shares obviously supports the share price. Indices also allow the creation of investment products that give investors exposure to markets or groups of stocks which can help in markets where there are barriers to investment.
Stock market indices may be classed in many ways. A broad-base index represents the performance of a whole stock market— and reflects how investors feel about the economy. The most regularly quoted market indices are broad-base indices comprised of the stocks of large companies listed on a nation's largest stock exchanges, such as the American Dow Jones Industrial Average and S&P 500 Index, the British FTSE 100, the French CAC 40, the German DAX and the Japanese Nikkei 225.
The Use of Indices
Stock indices have developed in the last twenty years to become much more than economic indicators (market barometer) and with growing developments in financial markets, more technical functions of indices have been brought to the forefront.
Stock indices are used by investors and fund managers as one of the many tools to evaluate the performance of a stock market The application of indices is now much wider including the use of indices as benchmarks for investor portfolio comparisons and as underlying components of financial products, for example Exchange Traded Funds (ETFs) and derivatives.
Bursa Malaysia Indices
The existing Bursa Malaysia indices are calculated using the market capitalisation weighted method.
Market capitalisation means the total value of a listed companies shares based on the current market price. Therefore the bigger companies are given higher weightage compared to the smaller companies.
Reading Market Reports
As a stock trader, you will begin to pay more interest to the business section of your local newspaper. Most feature a section that deals with Stock Market prices at close of the previous day. In this section, you will come across the following descriptions:
Year’s High - the highest price for a particular stock for the year.
Year’s Low - the lowest price for a particular stock for the year.
Stock Code - a unique numbering system to identify a particular stock.
Stock Counter - the stocks listed on Bursa Malaysia.
Cls’ng (Closing) - the closing price for a particular stock for that particular trading day.
+/- - the symbol for the increase or decrease in the stock price for that particular day.
+/-% - the symbol for the percentage increase or decrease in the stock price.
Lots Traded
- stocks are normally traded in board lots of 100 units; lots traded will tell you the number of lots traded on a particular day.
Day’s High - the highest price for a stock in that trading day.
Day’s Low - the lowest price for a stock in that particular day.
Div Yield
- a dividend yield is a method of valuing stocks; it is calculated as
Cash Dividend per Stock = Dividend Yield
Market Stock Price
P/E Ratio(Price/Earnings Ratio)
- the information obtained from this will enable you to make a performance comparison of a company with that of the industry, and from one period to another. The formula is:
Current Market Price = P/E Ratio
Earnings Per Stock
Earning per stock - amount of a company’s earnings attributable to each ordinary stock of that company.
M Cap(Market Capitalisation)
- this shows the total value of a listed company’s stocks based on the current market price; calculated as:
Stock’s Market Price x Number of Stocks Issued
NTA per Stock
- this indicates the value of assets backing the stock of a company; calculated by:
Net assets of a company
Number of ordinary stocks in it
Reading the stock market performance section of the newspaper is an easy thing to do. You just need to do it a few times until you begin to feel comfortable with it.
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As a stock trader, you will begin to pay more interest to the business section of your local newspaper. Most feature a section that deals with Stock Market prices at close of the previous day. In this section, you will come across the following descriptions:
Year’s High - the highest price for a particular stock for the year.
Year’s Low - the lowest price for a particular stock for the year.
Stock Code - a unique numbering system to identify a particular stock.
Stock Counter - the stocks listed on Bursa Malaysia.
Cls’ng (Closing) - the closing price for a particular stock for that particular trading day.
+/- - the symbol for the increase or decrease in the stock price for that particular day.
+/-% - the symbol for the percentage increase or decrease in the stock price.
Lots Traded
- stocks are normally traded in board lots of 100 units; lots traded will tell you the number of lots traded on a particular day.
Day’s High - the highest price for a stock in that trading day.
Day’s Low - the lowest price for a stock in that particular day.
Div Yield
- a dividend yield is a method of valuing stocks; it is calculated as
Cash Dividend per Stock = Dividend Yield
Market Stock Price
P/E Ratio(Price/Earnings Ratio)
- the information obtained from this will enable you to make a performance comparison of a company with that of the industry, and from one period to another. The formula is:
Current Market Price = P/E Ratio
Earnings Per Stock
Earning per stock - amount of a company’s earnings attributable to each ordinary stock of that company.
M Cap(Market Capitalisation)
- this shows the total value of a listed company’s stocks based on the current market price; calculated as:
Stock’s Market Price x Number of Stocks Issued
NTA per Stock
- this indicates the value of assets backing the stock of a company; calculated by:
Net assets of a company
Number of ordinary stocks in it
Reading the stock market performance section of the newspaper is an easy thing to do. You just need to do it a few times until you begin to feel comfortable with it.
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The Role Of A Broker
To buy or sell shares on Bursa Malaysia, you need to use a registered broker who is a member of Bursa Malaysia. You cannot deal directly with Bursa Malaysia as only brokers have direct access to the market.
A broker acts as your agent - much like a real estate agent that sells your house.
He/she earns a commission on the value of shares you trade - just like a real estate agent earns commission on buying and selling houses for people.
A broker can also be involved in the listing of a new company by underwriting the float and marketing the float to their group of clients.
There are many brokers to choose from – click here for a list of all brokers.
To buy or sell shares on Bursa Malaysia, you need to use a registered broker who is a member of Bursa Malaysia. You cannot deal directly with Bursa Malaysia as only brokers have direct access to the market.
A broker acts as your agent - much like a real estate agent that sells your house.
He/she earns a commission on the value of shares you trade - just like a real estate agent earns commission on buying and selling houses for people.
A broker can also be involved in the listing of a new company by underwriting the float and marketing the float to their group of clients.
There are many brokers to choose from – click here for a list of all brokers.
Understanding The Stock Market
The stock market is where the shares in companies are bought and sold, providing companies options to access capital, and investors opportunities to own a share of the company and enjoy potential gains from the company’s future performance.
The stock market offers people the ability to generate a separate income stream apart from their daily jobs, or income streams which are superior to those from traditional savings deposits. But before you even think about buying and selling shares, you must know the fundamentals of the stock market and of trading.
First time investors can become confused because of the terminology that is used to describe various market functions. These don’t take long to learn. Click here for your basic share trading terms. Incidentally, one common confusion is over the terms ‘ stocks’ and ‘shares’. Actually, they both mean the same thing and can be used interchangeably.
The Role of Bursa Malaysia
You can only invest in stocks through a stock exchange, an organized marketplace where stocks are bought and sold under strict rules, regulations and guidelines. The Malaysian stock exchange is called Bursa Malaysia. Bursa Malaysia has over 1,000 listed companies offering a wide range of investment choices to local and global investors. Companies are either listed on Bursa Malaysia Securities Main Market or ACE Market.
Raising Capital on the Stock Market
The Stock Market was created by companies wishing to raise capital for their business. When someone says they have a listed company they mean listed on Bursa Malaysia. All companies need cash to take advantage of growth opportunities. Many start-up companies however find themselves short of capital to fund expansion. One way to acquire this cash is to publicly float the company. This involves selling part of the company to private individual and institutional investors who are then able to freely exchange these stocks on an open market. Purchasing stocks in a company that is listed on the stock market is done through an Initial Public Offering or IPO.
Once an IPO has been issued, you can contact the company (phone, fax or email) for a copy of the Prospectus and complete the application to apply for an allocation of shares. Or you can wait until the company is floated and buy shares on the open market. Besides Bursa Malaysia, stock brokers will also have information regarding Initial Public Offerings.
Companies that are already listed can also raise additional money on the stock market by offering existing stockholders the opportunity to buy more stocks in the company. For example, a listed company wanting to raise additional capital might issue one new share at 5sen each for every three shares an existing investor owns.
When you buy shares, you are buying a share in that company and so you own a percentage of that company. When the company makes a profit, you share in that profit in the form of a dividend. Typically, the number of shares that have been issued multiplied by the share price gives us how much a company is worth.
The stock market is where the shares in companies are bought and sold, providing companies options to access capital, and investors opportunities to own a share of the company and enjoy potential gains from the company’s future performance.
The stock market offers people the ability to generate a separate income stream apart from their daily jobs, or income streams which are superior to those from traditional savings deposits. But before you even think about buying and selling shares, you must know the fundamentals of the stock market and of trading.
First time investors can become confused because of the terminology that is used to describe various market functions. These don’t take long to learn. Click here for your basic share trading terms. Incidentally, one common confusion is over the terms ‘ stocks’ and ‘shares’. Actually, they both mean the same thing and can be used interchangeably.
The Role of Bursa Malaysia
You can only invest in stocks through a stock exchange, an organized marketplace where stocks are bought and sold under strict rules, regulations and guidelines. The Malaysian stock exchange is called Bursa Malaysia. Bursa Malaysia has over 1,000 listed companies offering a wide range of investment choices to local and global investors. Companies are either listed on Bursa Malaysia Securities Main Market or ACE Market.
Raising Capital on the Stock Market
The Stock Market was created by companies wishing to raise capital for their business. When someone says they have a listed company they mean listed on Bursa Malaysia. All companies need cash to take advantage of growth opportunities. Many start-up companies however find themselves short of capital to fund expansion. One way to acquire this cash is to publicly float the company. This involves selling part of the company to private individual and institutional investors who are then able to freely exchange these stocks on an open market. Purchasing stocks in a company that is listed on the stock market is done through an Initial Public Offering or IPO.
Once an IPO has been issued, you can contact the company (phone, fax or email) for a copy of the Prospectus and complete the application to apply for an allocation of shares. Or you can wait until the company is floated and buy shares on the open market. Besides Bursa Malaysia, stock brokers will also have information regarding Initial Public Offerings.
Companies that are already listed can also raise additional money on the stock market by offering existing stockholders the opportunity to buy more stocks in the company. For example, a listed company wanting to raise additional capital might issue one new share at 5sen each for every three shares an existing investor owns.
When you buy shares, you are buying a share in that company and so you own a percentage of that company. When the company makes a profit, you share in that profit in the form of a dividend. Typically, the number of shares that have been issued multiplied by the share price gives us how much a company is worth.
Why Invest In Stocks?
Investing is making your money work for you by getting your money to generate more money. Investing in stocks has consistently proven to be one of the most profitable forms of investment available.
The benefits include:
Immediate Buy/Sell so you can sell part of your investment any time.
Very low transaction cost.
The freedom to work at your own place, at your pace in your own time.
Easy monitoring — log in to the market from anywhere in the world.
Being able to maximise returns whilst spreading your risk.
A predictable form of investment if you know what you’re doing.
Putting you in control and freeing you of fund management fees.
Considerable tax advantages.
Things to watch out for:
The market can be a volatile place.
You must acquire knowledge of what you are doing.
You must monitor your investments.
You must learn the discipline to enter and exit the market on entry and exit signals.
Can Ordinary People Profit from the Stock Market?
Many people say things like “I’d love to get into the stock market” or “If I had more money, I’d invest in stocks”. Many people also believe that to make a profit from the stock market you either need to be rich already, be a full-time investment trader or be a financial whiz.
Not necessarily so.
Let’s take a look at three different scenarios of ordinary people in the stock market to see how they fared. This will let us view how the process works, the different approaches, and how returns are generated.
Scenario 1:
John works in a manufacturing plant earning RM33,000 a year. After rent, living and personal expenses, John has managed to save RM1,500 over the past 6 months that he wants to invest in the stock market. John buys 1,600 shares in ABC Mining at RM0.90 per share (RM1,440). He also pays RM32.95 brokerage fees for buying the shares. In total, John has invested RM1,472.95.
Six months later John decides to sell his shares. He has kept an eye on the performance of ABC Mining and they have risen to RM1.19 a share. John sells his shares for RM1,904. He also pays RM32.95 brokerage fees for selling his shares, leaving him with RM1,871.05. That is a profit of RM398.10.
RM398.10 may not sound a lot, but remember John only invested RM1,472.95 for 6 months, so he won’t make a huge return. Nevertheless, John made a 27% profit which is far better than he would have made by putting the money into his savings account.
Scenario 2:
May and Chong both work full-time in professional jobs. Together, they earn RM120,000 per year. After mortgage repayments, living and personal expenses May and Chong have managed to put away RM5,000 that they want to now invest in the stock market. They buy 1,500 shares in AAA Steel at RM1.48 a share (RM2,220) and 1,500 shares in XY Manufacturing at RM1.33 a share (RM1,995). They also pay RM65.90 brokerage fees for the two transactions. Their total outlay is RM4,280.90.
Over the next 12 months AAA Steel shares have risen to RM2.60 a share and XY Manufacturing shares have moved to only RM1.38 a share. May and Chong sell their shares for a total of RM5970. They pay their broker RM65.90 and are left with RM5904.10. Their initial investment was RM4,280.90. So, they make a profit of RM1,623.20.
Scenario 3:
Aminah is retired, owns her own home and earns a comfortable income from several long term investments. Aminah would like to invest RM15,000 that she has set aside for buying shares.
Aminah selects a portfolio of 5 companies and aims to invest around RM3,000 in each. Aminah buys 3,333 shares in ABC Mining at RM0.90 a share (an investment of RM2,999.70). She also buys 2,027 shares in AAA Steel at RM1.48 a share (RM2,999.96) and 2,255 shares in XY Manufacturing at RM1.33 a share (RM2,999.15). To complete her portfolio, Aminah buys a further 2,912 shares in MM Multimedia at RM1.03 a share (RM2,999.36) and 3,000 shares in BB Furniture at RM1.00 a share (RM3,000). Aminah also pays RM164.75 brokerage fees for buying the shares. In total, Aminah has invested RM1,5162.92.
12 months later Aminah sells her shares. Four of the shares have increased in value but BB Furniture has dropped to RM0.95 a share. ABC Mining rose to RM1.19 a share returning RM3,966.27. AAA Steel rose to RM2.60 a share returning RM5,270.20. XY Manufacturing rose to RM1.38 a share returning RM3,111.90. MM Multimedia rose to RM1.09 a share returning RM3,174.08. BB Furniture dropped to RM0.95 a share returning RM2,850. In total, Aminah’s shares returned RM18,372.45 less RM164.75 for brokerage. This gives a total of RM18207.70, earning a profit of RM3,044.78.
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© 2009 Bursa Malaysia Berhad. All rights reserved. Please read our disclaimer.
Investing is making your money work for you by getting your money to generate more money. Investing in stocks has consistently proven to be one of the most profitable forms of investment available.
The benefits include:
Immediate Buy/Sell so you can sell part of your investment any time.
Very low transaction cost.
The freedom to work at your own place, at your pace in your own time.
Easy monitoring — log in to the market from anywhere in the world.
Being able to maximise returns whilst spreading your risk.
A predictable form of investment if you know what you’re doing.
Putting you in control and freeing you of fund management fees.
Considerable tax advantages.
Things to watch out for:
The market can be a volatile place.
You must acquire knowledge of what you are doing.
You must monitor your investments.
You must learn the discipline to enter and exit the market on entry and exit signals.
Can Ordinary People Profit from the Stock Market?
Many people say things like “I’d love to get into the stock market” or “If I had more money, I’d invest in stocks”. Many people also believe that to make a profit from the stock market you either need to be rich already, be a full-time investment trader or be a financial whiz.
Not necessarily so.
Let’s take a look at three different scenarios of ordinary people in the stock market to see how they fared. This will let us view how the process works, the different approaches, and how returns are generated.
Scenario 1:
John works in a manufacturing plant earning RM33,000 a year. After rent, living and personal expenses, John has managed to save RM1,500 over the past 6 months that he wants to invest in the stock market. John buys 1,600 shares in ABC Mining at RM0.90 per share (RM1,440). He also pays RM32.95 brokerage fees for buying the shares. In total, John has invested RM1,472.95.
Six months later John decides to sell his shares. He has kept an eye on the performance of ABC Mining and they have risen to RM1.19 a share. John sells his shares for RM1,904. He also pays RM32.95 brokerage fees for selling his shares, leaving him with RM1,871.05. That is a profit of RM398.10.
RM398.10 may not sound a lot, but remember John only invested RM1,472.95 for 6 months, so he won’t make a huge return. Nevertheless, John made a 27% profit which is far better than he would have made by putting the money into his savings account.
Scenario 2:
May and Chong both work full-time in professional jobs. Together, they earn RM120,000 per year. After mortgage repayments, living and personal expenses May and Chong have managed to put away RM5,000 that they want to now invest in the stock market. They buy 1,500 shares in AAA Steel at RM1.48 a share (RM2,220) and 1,500 shares in XY Manufacturing at RM1.33 a share (RM1,995). They also pay RM65.90 brokerage fees for the two transactions. Their total outlay is RM4,280.90.
Over the next 12 months AAA Steel shares have risen to RM2.60 a share and XY Manufacturing shares have moved to only RM1.38 a share. May and Chong sell their shares for a total of RM5970. They pay their broker RM65.90 and are left with RM5904.10. Their initial investment was RM4,280.90. So, they make a profit of RM1,623.20.
Scenario 3:
Aminah is retired, owns her own home and earns a comfortable income from several long term investments. Aminah would like to invest RM15,000 that she has set aside for buying shares.
Aminah selects a portfolio of 5 companies and aims to invest around RM3,000 in each. Aminah buys 3,333 shares in ABC Mining at RM0.90 a share (an investment of RM2,999.70). She also buys 2,027 shares in AAA Steel at RM1.48 a share (RM2,999.96) and 2,255 shares in XY Manufacturing at RM1.33 a share (RM2,999.15). To complete her portfolio, Aminah buys a further 2,912 shares in MM Multimedia at RM1.03 a share (RM2,999.36) and 3,000 shares in BB Furniture at RM1.00 a share (RM3,000). Aminah also pays RM164.75 brokerage fees for buying the shares. In total, Aminah has invested RM1,5162.92.
12 months later Aminah sells her shares. Four of the shares have increased in value but BB Furniture has dropped to RM0.95 a share. ABC Mining rose to RM1.19 a share returning RM3,966.27. AAA Steel rose to RM2.60 a share returning RM5,270.20. XY Manufacturing rose to RM1.38 a share returning RM3,111.90. MM Multimedia rose to RM1.09 a share returning RM3,174.08. BB Furniture dropped to RM0.95 a share returning RM2,850. In total, Aminah’s shares returned RM18,372.45 less RM164.75 for brokerage. This gives a total of RM18207.70, earning a profit of RM3,044.78.
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© 2009 Bursa Malaysia Berhad. All rights reserved. Please read our disclaimer.
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