Currently the equities markets are relatively cheap and there are plenty of valuable companies with very cheap price, would you wish to make additional investment directly into shares or indirectly through unit trusts?

No doubt it is a better time to invest more with relatively low price, but since the economy are now surrounding by bad news like bailouts of big companies and industries, depressions, recessions, salary and jobs cuts etc, it is therefore advisable we enhance our financial firewalls before proceed with the additional investment.

The firewall one should always set up is the emergency fund (besides sufficient insurance coverage). At normal time, we suggest generally one should have highly liquid saving fund (like moneys saved in banks and FDs) equivalent to 6 months of your monthly expenses. Depends on the possibility of income change and job security outlook of your current carrier, one may increase the amount of emergency fund to a more comfortable level, says to 12 times of your monthly expenses.

With the emergency fund in place, we shall plan to invest with money which is unlikely needed in 3 years time. For instance, money allocated for future house renovation, marriage, and child’s tertiary education etc within 3 years shall be set-aside from the securities investment.

After subtracting the emergency fund and short-term money needed, we can then proceed with investment plan with our extra money.

Happy Investing!