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In our latest podcast episode  on Are We Ok? , with Dr. Ong Kian Ming to talk about some hot topics that have been making waves in Malaysia including the implementation of the Matriculation Policy . Here are the challenges surrounding the recent Matriculation Policy  implementation. 1. Quota System Limitation Prime Minister’s Anwar Ibrahim’s announcement to automatically admit students with 10As  into the matriculation program was initially met with enthusiasm, signalling a positive step towards meritocracy. The policy was seen as an opportunity for non-Bumiputera students to gain fair access to higher education through the matriculation program. Despite the initial optimism, the actual implementation of this policy falls short , with many top-performing non-Bumiputera students still facing rejection. Even if there are available spots, non-Bumiputera students cannot exceed this quota, effectively limiting their access to the matriculation program despite the announcement. The 90% allocation for Bumiputera students in matriculation colleges leaves limited space for non-Bumiputera applicants, even if they have strong academic records. 2. Loss of Public Perception and Trust The gap between the policy announcement and its execution has eroded public trust  in the government’s ability to deliver on its promises. When students and their families are promised certain outcomes, the failure to deliver can lead to a loss of confidence in the education system and the government’s commitment to reform. As a result, non-Bumiputera students who are unable to secure a spot in public universities are often compelled to enrol in private and more expensive higher education institutions. This financial strain can persist well into their careers and family lives, impacting their economic well-being and potentially contributing to brain drain as they seek better opportunities abroad. 3. A Call for Clearer Communication The lack of thorough planning and consideration of the policy’s practical implications has resulted in a scenario where the intended benefits are not fully realised and the policy becomes a source of contention rather than progress. Although, the announcement was seen as definitive, with high expectations among students and their families, the failure to clearly communicate the policy’s timeline and the steps required to implement it has led to confusion and unmet expectations . Clearly, there is a need for more transparent communication and consistent follow-through to ensure that policy changes are effectively implemented and that the public is adequately informed about what to expect. Curious to know more? Watch the full podcast of Episode 31  on the Are We Ok? Channel  to get the latest scoop! Don’t forget to subscribe and let us know what you think in the comments. Subscribe to our   financial newsletter  for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.

Some traders buy and sell major index ETFs to make money, but this approach has its challenges. ETFs are typically long-term investments, and predicting the overall performance of an index can be difficult, especially when it turns into a guessing game about future market trends.  Understanding the Market Context Before exploring alternative trading strategies, it’s crucial to grasp the current market situation. In 2022, the Federal Reserve (FED) began sharply increasing interest rates, which affected the stock market. Companies with high debt saw their interest expenses rise, hurting profits and stock prices. The FED raised rates from near zero to over 5%  from March 2022 and continued to increase rates until July 2023. Despite these hikes, the market has been surprisingly bullish, with the S&P 500 up 18%, the Dow Jones up 12%, and the NASDAQ up about 28%. This resilience is unexpected given that the U.S. has relied on low-interest rates since the 2008 financial crisis to boost borrowing and spending. By 2022, the FED recognised the risks of keeping rates low for too long, leading to the recent hikes. This sudden increase made it harder for businesses and individuals to manage debt, usually resulting in lower spending and corporate earnings. Yet, the U.S. economy has continued to grow, defying expectations in one of the strongest bull markets in history. The Complexity of Today’s Market Predicting market direction has become increasingly difficult. For instance, the S&P 500 is designed to track the performance of the 500 most valuable companies in the U.S. However, with the rise of artificial intelligence (AI) and the hype surrounding tech companies, a few large companies now dominate the index. This concentration means that if one of these tech giants faces challenges, like Apple recently did when fined $2 billion by the EU, it can drag down the entire index. Moreover, nobody can predict how long the AI craze will last. When it fades, the dynamics of the S&P 500 could shift, making current knowledge about the index irrelevant. A Better Way to Trade the Index: Futures Market Instead of relying on ETFs, traders can look to the futures market. Unlike stocks or ETFs, where you own a security, a futures contract is a legally binding agreement to buy or sell an asset at a predetermined price on a specific date. Using the S&P 500 as an example, the goal with futures trading is not to analyse all 500 component stocks in the index for the long term. Instead, you focus on predicting the trend of the index over a shorter period, such as 3, 6, or 9 months. This approach is more manageable and allows traders to make informed decisions based on the market’s short-term outlook. By comparing the price quotes of CME Group’s E-mini or Micro E-mini S&P 500 futures contracts, which expire in the next few months, you can gauge the market’s sentiment. This method is particularly useful when considering potential interest rate cuts in the U.S. or upcoming events like the U.S. election. The Benefits of Shorting the Index One advantage of trading futures is the ability to short the index. Shorting allows traders to profit from a market downtrend by selling a futures contract at the current price and buying it back later at a lower price. This strategy offers traders the flexibility to take positions on both sides of the market, depending on their outlook. Additionally, shorting can be part of a hedging strategy to protect your portfolio. For instance, if you’re confident in the long-term growth of a company like Nvidia but are concerned about the overall market, you can buy Nvidia stock and simultaneously short the S&P 500 index futures. This way, if the market crashes, your short position can offset losses in your portfolio. However, it’s important to note that hedging is not foolproof. If Nvidia’s stock price falls while the S&P 500 rises, you could face amplified losses. Gauge Market Sentiment with Futures Even if you don’t actively trade futures, keeping an eye on futures prices can provide valuable insights into market sentiment. Since futures contracts reflect traders’ expectations of an asset’s price at a specific future date, observing these price trends can help you make more informed decisions about whether to continue investing or to stay on the sidelines. Conclusion In today’s complex market, traditional strategies like trading index ETFs may not always be the most effective approach. By exploring the futures market, you can gain more control over your trading decisions and better manage your risk. Whether you’re new to trading or an experienced investor, understanding how futures work and how they reflect market sentiment can be a powerful tool in your trading arsenal. Subscribe to our   financial newsletter  for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.

If you’ve been paying attention to the news , you may have heard that the Malaysian Ringgit has been on the rise. Just a few months ago, headlines were all about the Ringgit hitting record lows  against the US Dollar and Singapore Dollar. However, it’s making a bit of a comeback, and that’s caught a lot of people’s attention. In this article, we do a short breakdown of why the value of Ringgit is finally appreciating.   Reasons for the Ringgit Rising 1. BNM’s Foreign Exchange Conversion Measures Bank Negara Malaysia (BNM) implemented measures to encourage the conversion of foreign exchange income held by government-related companies, corporations, exporters, and investors into Ringgit. This increased demand for the Ringgit in the foreign exchange market, leading to its appreciation. In the first quarter of 2024 alone, Malaysia saw a notable increase in foreign exchange conversions compared to the previous year. This influx has strengthened the local currency, making it one of the best-performing currencies in the region . By mid-2024, the Ringgit had appreciated by 2.8% month-on-month, reflecting the impact of these conversion measures. 2. Favourable Domestic and External Factors The Ringgit has benefited from a combination of favourable domestic policies and external factors, particularly under the Malaysian government’s Madani framework, which emphasises sustainability, innovation, and prosperity. This economic approach aims to enhance the country’s macroeconomic fundamentals. The government’s commitment to strengthening the Ringgit is evident in its efforts to liberalise foreign exchange policies and boost demand for the Ringgit in the international market . The focus on improving economic capacity and infrastructure aligns with the long-term vision of the Madani government, which seeks to create a more resilient and competitive economy. 3. Stable Monetary Policy Bank Negara Malaysia’s decision to maintain the Overnight Policy Rate (OPR) at 3%  has been another a key factor in stabilising the Ringgit. By keeping interest rates steady, BNM has made Malaysian assets more attractive to investors, boosting demand for the Ringgit. This policy also helps control inflation, ensuring that the Ringgit retains its purchasing power. Additionally, the consistency in monetary policy fosters investor confidence, which further supports the Ringgit’s value in the global market. Overall, this stable approach has contributed to the Ringgit’s recent strength. 4. Increased Foreign Investments There has been a rise in foreign investments in Malaysian equity, which has further strengthened the Ringgit. The narrowing gap between Malaysia’s 10-year Malaysian Government Securities (MGS) yield and US Treasury yields, combined with expectations of US interest rate cuts, have made the Ringgit more attractive to investors. As the gap between Malaysian and US interest rates narrows, Malaysian assets become more appealing to both domestic and international investors. This is because the relative returns on Malaysian bonds 5. Weakening of the US Dollar The US Dollar has been weakening  due to underwhelming economic data from the US and expectations of interest rate cuts by the Federal Reserve. As of now, the Dollar Index has declined by 2.01%, largely due to the anticipation of the Fed’s rate cuts in September. Lower interest rates reduce the returns on bonds and fixed deposits, making them less attractive to investors. This decreased demand for the Dollar indirectly supports the appreciation of the Ringgit. 6. Economic Growth and Infrastructure Development Malaysia’s economy is expected to grow by 5.8% in the second quarter of 2024 , with low inflation at 2%. This growth is driven by private-sector investment, infrastructure projects, and increased economic activity. This positive economic outlook has supported the Ringgit’s recovery and growth. Additionally, stronger exports, particularly in the electrical and electronics sectors, have increased foreign receipts, further supporting the Ringgit. Conclusion The Ringgit’s recent rise definitely shows that there just might be some hope for Malaysia’s economy. While there are certainly some challenges that remain, the current momentum offers a hopeful glimpse into a future where Malaysia’s currency continues to strengthen.  Subscribe to our financial newsletter  for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.

Are you ready to take control of your finances? Creating a personal finance budget is the first step towards achieving financial freedom and stability. In this article, we’ll guide you through a step-by-step process to help you create a budget that works for you, along with some practical tips and strategies to help you manage your money effectively. Step 1: Understand Your Current Financial Situation Before diving into budgeting, it’s important to have a clear picture of your current financial situation. Many people find this step challenging because they fear uncovering financial problems. However, understanding your financial state is essential for building a solid budget. Ignoring the problem won’t make it go away—so you’ll need to face it head-on. Step 2: Track Your Cash Flow The next practical step in budgeting is to track your cash flow. This means keeping tabs on how much money is coming in and how much is going out each month. Here’s how you can do it:  Create a Table for Your Income Start by listing all your sources of income in a table—this could be in an Excel sheet or a simple notebook. Make sure to include your net income (the amount you actually take home after deductions like EPF, PCB, and SOCSO). If you have side hustles or additional income streams, list those as well. For example: • Main Income : RM4,500 (nett) • Side Hustle : RM500 • Total Income : RM5,000 Create a Table for Your Expenses Next, categorise your expenses into three main groups: loans, necessities, and lifestyle expenses. 1. Loans : Car loans, PTPTN, credit card payments, etc. 2. Necessities : Rent, utilities, groceries, petrol, insurance, etc. 3. Lifestyle Expenses : Dining out, gym memberships, subscriptions, etc. 4. Regular Investment: If you have regular investments or savings plans with auto deductions, create a separate table for these. Include items like mutual funds or savings plans and list the monthly amounts. Step 3: Calculate Your Monthly Cash Flow Now that you have your income and expenses laid out, it’s time to calculate your monthly cash flow. Subtract your total expenses from your total income. For example: • Total Income : RM5,000 • Total Expenses : RM4,200 • Monthly Cash Flow : RM800 If you’re regularly investing, subtract this amount from your cash flow to determine your free cash flow—the amount left for discretionary spending or additional savings. Step 4: Analyse Your Financial Behaviour With your cash flow calculated, you can now analyse your spending habits. Look for patterns in your spending and identify areas where you might be overspending or where you could cut back. For example, are you spending too much on dining out or entertainment? Are there subscriptions you no longer need? Perhaps you have a habit of purchasing anything that appears to be on sale. All these small expenses can easily break your budget. Step 5: Set Financial Goals After analysing your spending, set clear financial goals for 2024. Whether your goal is to pay off debt, increase your savings, or save for a big purchase, make sure your goals are specific, measurable, and attainable. If your cash flow is negative, your first goal should be to turn that around. Start by reducing non-essential expenses and consider finding ways to increase your income if necessary. Step 6: Plan Out a New Budget With your goals in mind, plan out a new budget that reflects your priorities. Pre-determine how much you’ll spend on loans, necessities, and lifestyle expenses, and stick to the plan. If your ideal budget feels out of reach, create a transitional budget that gradually leads you to your goal. Ready to start your budgeting journey? Download our f ree budget template  and start planning your budget today. Conclusion Take control of your finances. Creating and sticking to a budget is a crucial step towards achieving financial stability and success. By tracking your cash flow, analysing your spending habits, and setting realistic goals, you’ll be able to stay on track towards your financial goals.  Subscribe to our  financial newsletter  for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.

You’re probably already familiar with what an emergency fund is, but have you heard of a sinking fund? Though both serve the purpose of improving your financial security, the two have distinct purposes. In this article, we’ll get into what a sinking fund is, how it differs from an emergency fund, and show you practical tips on how you can get started on one.  What is a Sinking Fund? According to Investopedia , the technical term “sinking fund” is traditionally used for businesses that have floated debt in the form of bonds to gradually save money and avoid a large lump-sum payment at maturity. In simpler terms, it’s a financial strategy that helps companies to systematically manage their debt obligations responsibly.  You can apply this concept to managing your personal finances. Essentially, a sinking fund is a dedicated amount of money set aside over time to meet a specific future expense or financial obligation. They’re the perfect way to save up for any large expense.For example, you might use a sinking fund to systematically pay off debt on a house or a new car to reduce interest costs, or even for asset replacement when you need to replace something expensive.  How Much Do I Need in a Sinking Fund? How much you choose to set aside for your sinking fund will depend on what you plan to use your sinking funds for. To determine the amount to keep in a sinking fund, identify and list the anticipated expenses and their estimated costs. Divide each expense by the number of months until it's due. A simple example would be a total expense of RM2,500 due in 12 months; you should set aside RM208.33 per month for your sinking fund. (Use a sinking fund calculator  to help you calculate the annual interest rate and compound frequency.) Setting Up Your Sinking Fund Step 1: Decide what your sinking fund is for. Whatever you choose to have a sinking fund for—a cruise, a new laptop, etc.—it’s best to start planning for it early.  Step 2: Use a separate account to store your funds. I always recommend that you park your money in a cash app. It’s the easiest way to grow your money without doing anything! Some great apps you can use are GXBank , Versa Cash , TnG GO+ , and StashAway , as they offer daily to monthly returns ranging from 3.5% to 4%. For example, if you continued to save RM200 every month in Versa for 6 months with an interest rate of 3.8% p.a., your money would grow to approximately RM1,204.60, thanks to the compound interest. Step 3: Stick with it! Whatever your financial goal may be, consistency is key. Set up automated transfers from your main account to your sinking fund account to maintain the buildup. You’ll need to practice discipline to resist the temptation to dip into your fund for other purposes. What is an Emergency Fund? It is a fund that is set aside to pay for unexpected expenses such as unforeseen car repairs, medical expenses, or unemployment. How Much Should I Save in an Emergency Fund? The Employees Provident Fund (EPF) suggests that you save three to six months worth of your salary as an emergency fund . Depending on your financial obligations, you could opt save more. Ultimately, having an emergency fund is a must, as it provides a buffer between you and financial disaster. Sinking Fund vs. Emergency Fund The key difference between a sinking fund and an emergency fund boils down to planning versus unpredictability. A sinking fund is for those big-ticket items you know are coming—like buying a car or going on vacation—where you can plan and save with a clear goal in mind. On the other hand, an emergency fund is your financial safety net for when life throws you a curveball, like an unexpected car repair or medical bill, where you can’t predict the cost or timing. To manage both effectively, prioritise building your emergency fund first to ensure you’re covered for the unpredictable. Once that's in place, shift focus to creating sinking funds for your planned expenses. Conclusion Both an emergency fund and a sinking fund play an important role in your financial plan, but they have very different purposes. To make the most of your savings, I would recommend that you use both to help you on your financial journey.  Subscribe to our  financial newsletter  for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.

Property investment is attractive for its potential to generate passive income and protect against inflation. However, owning property comes with challenges like high upfront costs and ongoing maintenance. For those who want the benefits without the hassle, there are alternative ways to invest in property. In this article, we’ll explore three methods to invest in property without actually buying one. 1. Real Estate Investment Trusts (REITs)  A REIT is an investment vehicle that pools money from numerous investors and passes it to a professional management team to purchase, develop, manage, and sell real estate assets. Benefits of Investing in REITs Great dividend returns To qualify as a REIT, a company must distribute at least 90% of its taxable income to shareholders annually in the form of dividends, that means you’ll get money from the company at the end of the year. Opportunity to own significant properties We’re not talking about big houses or bungalows; we’re talking about owning parts of huge commercial properties like shopping malls. For instance, when you invest in Pavilion REIT, you become a part-owner of the Pavilion shopping malls. So, the next time you walk into Pavilion, you can tell yourself, “I actually own a part of this mall.” For most average people, owning a big commercial property like a shopping mall is almost impossible, but with REITs, you can do just that. You can become a co-owner and enjoy rental income from top brands like Chanel, Hermès, and Rolex. Liquidity You can buy and sell your REIT shares anytime you wish, unlike owning real property, which takes months or even years to sell. If you own an apartment and want to sell it, you have to contact a real estate agent, do multiple viewings, wait for the buyer’s loan approval, and only then can you complete the sale, which could take 3 to 6 months. But with REITs, which are listed on major stock exchanges, you can sell your shares immediately and receive your money the next day. REITs are especially popular in places where property prices are very high, like Singapore, where rising property and rental prices generate high rental income that is passed on as dividends to shareholders. Malaysia also has some good REITs, such as KLCC Property Stapled , IGB REIT , and Sunway REIT .  How do I Invest in REITs? All you need to do is open a stock brokerage account  and buy them on the stock exchange. In Malaysia, you can use Bursa, and in Singapore, you can use the Singapore Stock Exchange. You can open an account with platforms like moomoo Malaysia , which allows you to buy Malaysian stocks, US stocks, and even Singaporean stocks. 2. Subletting a Rented Property Subletting a rented property might sound confusing at first, but it’s actually quite simple. It’s where you rent a whole unit from the landlord, ideally at a lower price and for a longer lease, and then sublet it room by room at a higher total rental rate. Let’s say a unit costs RM2,500 per month to rent. You negotiate with the landlord for a three-year lease and get the rent reduced to RM2,300 or RM2,200 per month. You then sublet each room individually, charging an average of RM800 per room. If there are four rooms, you could collect RM3,200 in rent, but your cost is only RM2,200 or RM2,300, allowing you to earn the difference as passive income. Benefit of Subletting Rented Property The upfront cost is lower compared to buying a property, where you’d need to pay a 10% down payment plus legal fees and other costs. For subletting, all you need is the deposit and lease agreement, which would cost you much less—probably under RM10,000. Secondly, since you don’t own the property, you aren’t responsible for most maintenance costs. If something like a light bulb, fan, or air conditioner breaks, it’s the landlord’s responsibility to fix it. This method is quite popular, especially in areas with many colleges or educational centres, where students need affordable accommodation and prefer renting a room rather than a whole unit. 3. Investing in Tiny Houses Investing in tiny houses involves putting your cash in small homes, usually ranging from about 200 to 600 square feet. These homes are modular and custom-built to suit specific needs. Tiny houses became popular in the US as an affordable alternative to traditional homes. An example of a company that offers investment opportunities in tiny houses is Big Tiny , from Singapore. How it Works You can buy a whole tiny house or just a fraction of one, starting at SGD 10,000 (or around RM 30,000). You then lease the house back to them, and they deploy it to eco-tourism spots like Australia, New Zealand, or Singapore. They manage the property as an Airbnb, and you receive a return of up to 10% annually. After a few years, if you wish, you can sell the house back to them at the original purchase price. This way, you generate passive income just like a landlord, but without the hassle of managing the property yourself. Tiny houses can generate more income than regular rentals, but they can be a hassle to manage. With Big Tiny , however, they handle all the management for you, including maintenance and finding tenants. In Singapore, this type of investment is gaining popularity, and the company is even working with the Singapore government to deploy tiny houses on Lazarus Island as an eco-tourism spot. Conclusion These are three ways to reap the benefits of property investment without the hassle of owning a property. Whether you prefer subletting or investing in tiny houses or REITs, there are various options available that can suit different investment styles. Which one do you think is the most suitable for you? Let us know in the comments below!  Subscribe to our financial newsletter  for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.

With artificial intelligence (AI) transforming everything from healthcare to transportation, it's no surprise it's become one of the hottest topics in investing. Even Malaysia is actively positioning itself as a leader in AI development and application , with strong support from global tech giants. But if you’re a beginner interested in AI, trying to cut through the noise and tech jargon can be pretty overwhelming. You can skip the computer science degree, because today, we’ll break down the basics of how you can invest in AI and what you should know before investing in AI. Let’s dive in. Benefits of Investing in AI Investing in AI offers several advantages to investors. The rapidly expanding AI market presents substantial opportunities for growth, while diversifying your portfolio with AI investments can help mitigate risk. Additionally, successful AI companies have the potential to generate significant returns, making it an attractive prospect for those seeking high-reward investments. Considerations when Investing in AI There are several key factors to keep in mind when investing in AI. The AI sector can be volatile, with stock prices subject to significant fluctuations based on technological advancements and market sentiment. As with any investment, there's an inherent risk involved; AI companies, especially startups, might fail to achieve their goals, leading to potential losses. Additionally, understanding AI technology and its applications can be complex, requiring continuous learning to stay updated with the latest developments. Methods of Investing in AI Option 1: Buying Individual Stocks from Leaders in AI technology Investing in stocks can be considerably high risk but if you’ve got a high risk appetite, you can consider buying individual stocks for potential high returns.  Investing directly in well-known AI companies is one way to expose your portfolio to AI. There are plenty of options to choose from, including, Google ( Alphabet ), which uses AI for search algorithms and autonomous driving; and NVIDIA, known for its AI computing hardware. Moomoo Malaysia’s app  has a feature, the Industry Chain, that gives you a big-picture view of a specific industry. The Industry Chain feature  helps you identify companies within the AI industry and get a comprehensive breakdown of each company’s role in the AI ecosystem. To access the Industry Chain feature, go to Markets -> US -> Industry Chain.   Option 2: AI -Exposure through ETFs Alternatively, you can opt for ETFs as a lower-risk option to invest in AI. ETFs hold a basket of AI-focused companies, offering diversification and potentially lower risk than picking single stocks. ETFs let you buy a group of AI-focused stocks such as the Global X Robotics & Artificial Intelligence ETF ( BOTZ ) and the AI Powered Equity ETF ( AIEQ ). Key Factors for Evaluating AI Investments: Before you start investing, there are some key factors to look into when evaluating AI investments. In the case of selecting a good AI to invest in, look for the following: 1. Great Tech: Is the AI system accurate and powerful?   Evaluate the AI system's accuracy and performance. Beyond accuracy, you’ll also need to consider the AI’s explainability, that is understanding how the AI makes decisions and whether it can handle unexpected data well. Additionally, you also need to identify its competitive edge, such as whether or not the AI uses a novel approach or offer unique advantages compared to existing solutions. Example:  OpenAI's GPT-3 generates human-like text with high accuracy and provides insights into how it constructs responses, making it a powerful tool with significant competitive advantages in natural language processing. 2. Scalability: Can the company using AI keep expanding?  Next, analyse the market size and growth potential for the AI product. A large and expanding market indicates higher rate of success. Assess the adaptability of the AI solution, adapt to new situations or integrate with existing systems. Example:  Tesla's Autopilot system scales well due to the growing electric vehicle market. Its adaptability allows for integration of new features and improvements, expanding its market reach. 3. Reliable Team: Does the company have a strong AI team?   Look for a team with a proven track record of building successful AI systems. Experience within the specific industry the AI targets is a plus, indicating a deep understanding of industry-specific challenges. Domain expertise ensures the team can develop a relevant and impactful solution. Example:  DeepMind 's team, which is known for developing AlphaGo and showcases extensive experience and success in AI research, demonstrates strong capabilities in tackling complex problems and pushing AI innovation boundaries. 4. Good Data: Is the data used by the AI reliable and unbiased?   Assessing data management in AI companies can be challenging for new investors. While complete transparency might be elusive, you can glean valuable insights by checking company websites and reports for data management policies. Industry news and analyst reports can also reveal potential data breaches or ethical concerns. Look for companies with leadership experience in data privacy or operating in well-regulated industries. 5. Right Industry: Does AI solve a real problem in its field?   Research whether the AI solution addresses a genuine problem within its targeted industry. A clear problem-solution fit significantly increases adoption chances and success, as the AI provides tangible benefits and addresses critical industry challenges. Example:  Blue River Technology 's AI-driven agricultural equipment addresses the need for precision weed control in farming, offering a solution that reduces herbicide use and increases crop yields, solving a significant problem for farmers. Conclusion Investing in AI offers an exciting opportunity to expose your portfolio to one of the fastest-growing sectors in technology. Hopefully, with our guide, you’ll have a better idea on how to include AI in your investment portfolio. As always, we at Mr Money TV urge you to do your research or seek professional guidance before making any investment decisions. Subscribe to our   financial newsletter  for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.

The Malaysian education system has once again found itself in the spotlight, but not in a good way . The results revealed by the Education Minister showed that Malaysia's students performed below average, with over 400,000 students in primary and secondary schools nationwide experiencing learning problems in reading, writing, and counting. This has prompted concern from various quarters, including the Prime Minister, who stressed the need for urgent improvements in STEM subjects and English proficiency. As a parent, I share these concerns deeply. The quality of education directly impacts the future workforce and the country’s economic prospects. In this article, we’re going to take a brief look at the root causes of the decline in Malaysia’s education.  1. Lack of Investment in Early Childhood Education Early childhood education is critical for a child's development, laying the groundwork for future learning and success. Unfortunately, Malaysia faces insufficient investment in this area, leading to substandard early education programmes. Approximately 40% of children aged 4-6 do not attend preschool, and public spending on early childhood education is only about 0.4% of GDP , compared to the OECD average of 0.8%. This lack of funding results in poorly equipped preschools, underpaid and inadequately trained teachers, and limited access for children from lower-income families. The long-term consequences are significant, as children who miss out on quality early education often struggle later in life, affecting their overall educational attainment and future opportunities. 2. Under-qualified Teachers and Inadequate Training The effectiveness of teachers is crucial for quality education. Many teachers in Malaysia enter the profession without adequate qualifications or receive insufficient ongoing training. Reports indicate that only about 50% of preschool teachers possess the required diploma in Early Childhood Care and Education (ECCE) . This gap in professional development leads to ineffective teaching methods and poor student outcomes. Continuous professional development is essential, yet current programmes often fall short of meeting teachers' needs. 3. Outdated Curriculum and Assessment Methods The Malaysian education curriculum is often criticised for being outdated and misaligned with the global economy's demands. It emphasises rote learning  over critical thinking, creativity, and problem-solving skills, which are essential in today’s workforce. For instance, the current curriculum places a heavy emphasis on academic achievement, often neglecting character development and soft skills. Assessment methods focus primarily on memorisation rather than understanding and application, resulting in students who are ill-prepared for higher education and the workforce. 4. Lack of Access to New Resources Schools, particularly in rural areas, suffer from poor infrastructure and a lack of essential resources. Many schools lack access to modern technology, adequate facilities, and quality learning materials. This creates an uneven playing field, where students in well-resourced schools have significant advantages over those in under-resourced ones. The disparity in educational resources perpetuates inequalities and hampers the overall development of the education system. The Bottom Line As a parent, I want the best for my children and for them to contribute positively to Malaysia’s growth. Our education system needs a comprehensive overhaul, focusing on early education, teacher quality, and practical, skills-based learning. It’s time to move past language debates and address the core issues holding back our education system. The Education Minister recently stated that education should be a tool for national unity in Malaysia, and I wholeheartedly agree. By focussing on what truly matters—improving the quality of education and fostering a culture of learning and development—we can unite as a nation and ensure a brighter future for our children. Watch my full video here! Subscribe to our financial newsletter  for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.

Cutting-edge medical devices not only enhance healthcare but also drive economic growth and elevate a country's global standing. The good news is, Malaysia seems to be headed in that direction. According to reports, Malaysia’s medical device market is set to reach $3.6 billion by 2028 . Could this be due to the growing ageing population and the growing medical tourism industry? Let's explore the factors fuelling market growth and what it means for the future of healthcare in Malaysia. Factors Contributing to Malaysia’s Growing Medical Device Industry 1. Demographic and Socioeconomic Drivers Ageing Population:   Malaysia’s demographic shift towards an older population  is a significant driver of healthcare demand. Older individuals typically require more medical attention and advanced healthcare solutions to manage age-related health issues. Population Expansion:  The overall growth of Malaysia’s population, coupled with rising healthcare awareness, is expected to sustain demand for healthcare services. As the population increases, so does the necessity for accessible and quality healthcare. Growing Middle Class: Steady economic growth has expanded the middle class in Malaysia, resulting in greater purchasing power and increased demand for healthcare services and medical technologies. 2. Healthcare Industry Dynamics: Healthcare Innovation: Continuous advancements in medical technologies and treatments are attracting patients seeking cutting-edge care. This includes innovations in medical devices and treatment methodologies that enhance patient outcomes. Rising Healthcare Expenditure: Increased spending on healthcare, driven by both public and private sectors, is facilitating the expansion of healthcare infrastructure. Investments in new hospitals, advanced medical equipment, and healthcare facilities are crucial for meeting rising demand. Chronic Disease Prevalence:  The rising incidence of chronic diseases, such as cardiovascular diseases and diabetes, is prompting an increased need for healthcare services and specialised treatments. 3. Technological and Market Expansion: Digital Transformation: The adoption of digital health technologies, such as telemedicine and electronic health records, has accelerated, especially during the COVID-19 pandemic. These technologies improve patient access to healthcare and streamline operations. Medical Tourism: Malaysia has positioned itself as a competitive destination for medical tourism, offering high-quality healthcare services at lower costs compared to many developed countries. This influx of international patients significantly contributes to the growth of the healthcare market. Healthcare Workforce Development: Investment in training and education for healthcare professionals is essential for maintaining high standards of care, further supporting market growth. UMediC Group Berhad Leading the Medical Industry  One company that has caught attention of investors in the healthcare industry is UMediC  Group BERHAD. UMediC Group initially started out by distributing high-value medical devices from big names like Philips and GE. In order to meet increasing demands for medical solutions, they’ve managed to transition from being a distributor to a manufacturer. In recent years, they’ve recently shifted gears into manufacturing their own products and have patented some innovative designs, like single-use humidifiers, and are now distributing them across more than 30 countries. Since their recent IPO , UMediC has experienced a rapid expansion and is continuously expanding their factory to keep up with demand. Despite the usual challenges of navigating new markets and regulatory hurdles, UMediC has firmly established itself in the medical industry. They are now venturing into the medical services sector, with plans to introduce care centres and ambulance services. It’s clear that UMediC is on a mission to become a major player in the healthcare scene. To gain deeper insights into UMediC, and other small-cap stocks, check out the RHB Small Cap Jewel e-book . Watch my full interview with UMediC’s, Alternate Director, on The FAQ Show . Subscribe to our financial newsletter for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.

Investing in the stock market can be rewarding yet absolutely terrifying. If you’re a budding investor just getting started, you might have questions about which stocks are worth considering. Such questions can even overwhelm a seasoned investor. The stock market offers a myriad of investment options for investors. Among these options are small-cap stocks. Small-caps are companies that often fly under the radar but can offer substantial growth . Examples of well-known companies that started as small-cap include Monster Beverage Corporation, which is now a leader in the beverage industry, and Under Armour, which began as a small-cap company and has grown into a major player in sports apparel. New investors often shy away from small-cap companies, but they do offer promising investment growth. In this article, we’ll breakdown everything you need to know about small-cap stocks and share strategies on how you can invest in these hidden gems. How is a stock classified by market cap? Market capitalisation (or market cap) is the total value of a company’s outstanding shares of stock. Stocks in the stock market are classified based on their market capitalisation, or market cap, as large-cap, mid-cap and small-cap. Understanding the differences between them will help you make better informed investment decisions. Today, we’ll focus on understanding what small caps are all about.   What are Small-Caps? Small-caps are publicly traded companies with a market capitalization between RM300 million and RM2 billion. These companies are typically in the early stages of growth, making them exciting opportunities for investors. Examples of Malaysian small caps include PADINI , AEON , and ASTRO . Characteristics of Small caps Growth Potential Small-cap companies often have significant growth potential. They are typically younger companies or companies serving niche markets. Volatility These stocks tend to be more volatile than large cap and mid-cap stocks. Their prices can fluctuate widely due to lower trading volumes and higher sensitivity to market conditions. Risk and Reward Investing in small cap stocks may seem riskier, but the potential for high returns is also greater. These companies might struggle with limited resources and may be more vulnerable to economic downturns.  How to Spot a Small Cap Step 1: Identify a small cap Start scanning for small companies. Get on a stock screener  and spot any company with a market cap valued between RM300 million and RM2 billion. Step 2: Identify a strong business Next, identify a strong business. Focus your search efforts on finding companies with the potential to deliver explosive growth. That means looking for companies that could be the next Apple  or Netflix .  Here’s what to look out for when looking for small caps:   1. Explosive Growth Potential Focus on companies with consistently increasing revenue. This indicates strong sales and potentially innovative products or services in high demand. Aim for at least 20% annual revenue growth, but be cautious if growth slows, as it could signal a maturing market or fading trend.  A classic example of a once-small-cap company is NVIDIA , a leader in graphics processing units. They began their journey as a small-cap company, trading at a mere 35 cents per share in 1999. Fast forward to today, and their share price has skyrocketed by an incredible 229,000%. This phenomenal growth trajectory exemplifies the explosive potential that small-cap companies can offer! 2. Stock Price Appreciation Evaluate the historical stock price. A steady upward trend suggests investor confidence in the company's future. Conversely, stagnant or declining prices might indicate challenges. Remember, past performance isn't a guarantee, but it offers valuable insights. 3. Total Addressable Market (TAM) TAM refers to the annual expected sales within an observed market. Imagine the TAM as the size of the problem a company's product or service solves. A larger TAM signifies a broader customer base and more room for growth. For example, an AI company tackling a massive industry like healthcare has a much bigger TAM than one focused on a niche market . 4. Future Profitability While some small caps may not be profitable yet, they should demonstrate a clear path towards future profitability. Analyse the company's business model, its competitive edge (what makes them unique), and any valuable assets they possess. Look for improving profit margins, even if they haven't reached profitability yet. These signs suggest the company is on the right track. Small Cap Myths Debunked Myth Reality Small caps are too RISKY!  While small-cap stocks can be more volatile, this doesn’t necessarily translate to higher risk. The level of risk varies depending on the company’s industry, management, and financial health. Some small-caps are stable and have strong growth potential.  For instance, over the past 10 years (as of June 2024), the Russell 2000 has delivered an average annual return of 12.5%, compared to the S&P 500's 10.2%. Small-cap companies are generally not profitable. Some small-cap companies offer attractive dividends due to their historical nature and the desire for yield from families and shareholders. According to Robert Beauregard , these stocks offer a higher dividend yield (2.51%) compared to established indexes like the S&P 500 (1.83%) or the large-cap world index (2.34%). This means you could potentially earn more income from your investments while still enjoying the growth potential of smaller companies. Small caps are poorly managed. Many small-cap companies are led by skilled and experienced management teams who are deeply involved in the company's growth and success. Small caps are only suitable for speculative investors.  While small-caps can be more volatile, they are also suitable for long-term investors willing to research and have a higher risk tolerance. Should I include Small Caps in My Portfolio?  As an investor, it’s crucial to understand the risks involved when investing in individual stocks. Your investment is directly tied to the performance of the specific company you choose. If you invest in a small-cap company with strong fundamentals and a healthy outlook, the stock is likely to grow over the long term. However, if the company underperforms, your investment could lose value. As mentioned before, small-cap stocks tend to be more volatile, meaning their prices fluctuate more than those of larger companies. For instance, in 2023, over half of US small-cap stocks lost 10% or more, despite the overall market gaining about 26% for the year. Thorough research and risk management will be required when considering small-cap investments. If you don't have the time or expertise to make your own trading decisions, consider working with a financial advisor. There are two ways to invest in small caps: Buying Individual Stocks: This means you directly purchase shares of specific small companies you believe will show potential growth. Buying a Fund: This involves investing in a mutual fund or exchange-traded fund (ETF) that focuses on small-cap stocks. These funds hold shares of many different small companies, offering diversification, and are managed by professional fund managers who make investment decisions. For most investors, a broadly diversified mutual fund or exchange-traded fund (ETF) is a better option than picking individual small-cap stocks. This is because these diversified funds spread your investment across many companies, reducing the risk of losing everything if one company performs poorly. If you do decide that investing in small-cap stocks is right for you, you can buy and sell shares of individual companies  directly through online trading platforms. But, if you find buying individual stocks seems too risky or time-consuming, you can opt to invest in small-cap focused ETFs and mutual funds.  RHB Small Cap Jewel Get exclusive access to Malaysia's top 20 high growth small-cap companies, curated by RHB Research. Sign up here  to grab your copy of RHB’s 20th Anniversary Small Cap Jewels. Tips for Investing in Small-Cap Companies 1. Do Your Research It’s important for you to do your homework before you start investing in any company. Look at the company’s business model, competitive position, management team, and growth prospects. Financial statements, earnings reports, and market trends are good places to start. 2. Diversify Your Portfolio Never put all your eggs in one basket. Diversify your investments to manage risk effectively. By spreading your investments across various small-caps and other asset classes, you can balance potential risks and rewards. 3. Consider Small-Cap ETFs or Mutual Funds If researching individual stocks feels too overwhelming, consider investing in small-cap exchange-traded funds (ETFs) or mutual funds. These funds provide exposure to a basket of small-cap stocks, offering diversification and professional management. 4. Start Small As a new investor, start with a small investment in small-cap stocks. This allows you to get comfortable with market dynamics without risking too much of your capital. 5. Be Patient Investing in small-cap companies often requires patience. These companies may take time to grow and deliver returns. Keep a long-term perspective and avoid making impulsive decisions based on short-term market fluctuations. Conclusion In conclusion, with adequate research, investing in small caps could be a valuable addition to your portfolio. Small caps may offer you the chance to be at the forefront of innovation and, in some cases, potentially enjoy attractive dividends. Remember that every investment carries risk, so it’s essential to do your homework and consider your risk tolerance before diving in. Diversification is key; consider incorporating small caps alongside large-cap holdings to balance stability with growth potential. Happy investing! Subscribe to our   financial newsletter   for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.

When considering an investment, the flashy ticker symbols and daily stock price movements might catch your attention. However, savvy investors often emphasize evaluating a company rather than just its stocks. But why is this so? And how can you do the same ? Delving Deeper Than Stock Prices As Peter and Frankie see it, imagine stocks as the shimmering surface of a lake. They reflect what's happening now . But what lies underneath, the health and vitality of the aquatic ecosystem, symbolizes the company . Here's why and how you should evaluate a company before investing: Cash Flow Why: A company's ability to generate positive cash flow consistently indicates its capacity to remain solvent and meet its obligations without external financing. It's the lifeblood of any business. How: Look at the Statement of Cash Flows in a company's annual report. Focus on operating cash flow , which shows how much money the business brings in from its core operations. Example: Tenaga Nasional Berhad has consistently posted positive operating cash flows which is a sign of its robust business operations. Gearing Ratio Why: This ratio measures a company's financial leverage , indicating the proportion of its operations funded by debt versus equity . How: A higher ratio could indicate higher risk (e.g.: the company being unable to repay their debt), but also potential for higher returns (e.g.: the company might be expanding) . Example: AirAsia had a high gearing ratio in the past due to its capital-intensive nature. So, investors had to determine if such debt levels were sustainable in the long run. Profit Margin Why: Profit margin reflects how efficiently a company can convert sales into profit . Typically, you’ll want to look for a business that maximises profit while minimizing costs. How: A higher margin suggests better efficiency and control over costs . You can also compare their margin with their peers to see if their performance is at par with industry standards. Example: Genting Malaysia Berhad, a diversified conglomerate, has different profit margins across its segments. Evaluating these margins can help investors understand which segments drive the company's profitability. Shareholder Activity Why: Significant buying or selling by top executives or major shareholders can be a strong indicator of a company's future prospects . How: Monitor announcements on Bursa Malaysia or news reports about significant shareholding changes. And if let’s say a major shareholder is suddenly selling the stock don't panic thinking that something could be going wrong. Instead, find out the true reasons for such transactions because it could be that the shareholder is selling their stake to another strategic investor that could bring the company to new heights. Example: If the founder of a leading tech start-up increases their stake in the company, it might be seen as a vote of confidence in the company's future. Macro Conditions Why: Companies don't operate in a vacuum. The overall economic and political landscape can significantly influence a company's performance. How: Keep track of key macroeconomic indicators , like GDP growth, inflation rate, or foreign exchange rates. Read up even more and stay in touch with major events and happenings that surround the company. Example: The Malaysian palm oil industry can be affected by international trade policies, currency fluctuations, and even environmental concerns. You’ll want to be aware of these if you’re investing in companies like Sime Darby or IOI Corporation. The Big Picture: Evaluate Both The Company and Stocks Investing isn't just about catching the next hot stock. In fact, we don’t have control over the stocks as the price is based on market forces. It's a careful, informed assessment of where a company stands and where it might go in the future. This is why, what we can do is evaluate how a company’s management controls and steers their business to create value for shareholders like you and me. And if the company is healthy, its share price will follow eventually. In short, don't just skim the surface. Dive deep. The health of the lake depends on it! RHB Small Cap Jewel Get exclusive access to Malaysia's top 20 high growth small-cap companies , curated by RHB Research. Sign up here  to grab your copy of RHB’s 20th Anniversary Small Cap Jewels. Subscribe to our financial newsletter for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.

Earlier this month, the US Federal Reserve System (Fed) indicated that they will be cutting interest rates  throughout 2024. This created a euphoric sentiment in the market and that drove most asset classes up in price. So much so that even CNBC  said we can expect a ‘very bullish’ year for stocks in 2024! So, if you’ve been wanting to get into US stock investing, next year might just be the perfect time to do so! But are you wondering how  you can do this? Well, here’s a step-by-step guide on US stock market investing for Malaysians, including some of the platforms you can use. Step 1: Understanding the US Stock Market Before diving in, it's crucial to grasp the basics of the US stock market. It's home to the world's largest exchanges, like the New York Stock Exchange (NYSE) and NASDAQ, featuring a diverse range of established companies like Coca-Cola, IBM, Apple and Google. So, understanding the market's dynamics (including economic indicators, corporate earnings reports, political events, and more), key indices (such as the S&P 500 and Dow Jones), and trading hours (taking into account the time difference) is essential. Personally, when I’m trying to understand things like these, I’ll use the platform, Moo Moo .  This financial information app provides stock analysis tools, facts and reports on companies’ performance, real-time pricing as well as economic news that might affect the financial markets. Step 2: Choosing the Right Investment Platform As a Malaysian investor, your choice of platform is pivotal. Consider factors like ease of fund transfer, fees, and the range of available investment options. Preferably, you’ll want to look for platforms that offer access to US stocks, are user-friendly, and have reasonable fees. Popular choices include M+ Global  and Interactive Brokers .  Personally, I use M+ Global  because their trading app is very intuitive and easy to use. The features that they offer are also quite comprehensive including market overview, sector and top stocks performance, as well as the ability to create my own watchlist. For more details on M+ Global, check out the review I wrote here .  Step 3: Opening and Funding Your Account Once you've chosen a platform, the next step is to open an investment trading account. This process usually involves providing personal identification and financial information – typically, this includes your income source and investment experience. This step is not just a formality; it helps the platform tailor its services to your investment needs and provide appropriate guidance. Funding your account usually requires converting your MYR to USD, which can be done through the platform or your bank. It’s essential to be mindful of the exchange rates and transfer fees during this process.  Step 4: Research and Planning Before investing, it’s crucial for you to conduct thorough research and have a plan for your investments.  This research should include understanding the companies you're interested in, their financial health, market trends, and potential risks. This is where tools like financial news websites, investment apps, and market analysis can be invaluable.  Personally, the platform I use for this is a mixture of Moo Moo, M+ Global as well as Seeking Alpha . To me, Moo Moo provides the cold, hard facts when it comes to financial news; M+ Global is more towards understanding a company’s financial health, stock price and so on; Seeking Alpha, on the other hand, gives me insights from different perspectives. This is because Seeking Alpha  has a community of experts who will give their analysis and insights whether on the market or individual companies. It’s very opinionated and from that, I can understand the different points of view which will help me determine if a stock is one that aligns with my goals.  Step 5: Placing Your First Trade With your investment account funded and a plan in place, you're ready to make your first trade.  Start by navigating to the trading section of your platform. Here, you can search for stocks by ticker symbols (e.g., AAPL for Apple). Decide on the number of shares or the amount of money you wish to invest. You'll encounter options like 'market order' (buying at the current market price) or 'limit order' (setting a price you're willing to pay). Review and confirm your trade, and voila, you’re a US stock investor! Step 6: Monitoring Your Investments Investing is not just about buying stocks; it's also about monitoring and reviewing them to ensure they still align with your investment goals.  You’ll want to do this by keeping track of your investments’ performance and the overall market.  Staying informed about relevant news and being prepared to adjust your strategy if needed is also something you should be ready for.  Should You Invest In The US Stock Market From Malaysia? Investing in the US stock market from Malaysia is a viable and potentially lucrative option, especially with the anticipated bullish market in 2024.  However, it requires careful planning, research, and the use of the right tools and platforms. As an investor, it’s vital to stay informed, be adaptable, and continuously assess whether your investments align with your financial objectives.  With the right approach and resources, Malaysian investors can effectively navigate the US stock market and capitalize on its opportunities. Subscribe to our financial newsletter  for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals.