Thursday, October 05, 2006

Wait to recover the loss on technology fund

Dear Mr Tan,

One of my relative bought about $70,000 worth of NTUC technology fund. It is now worth about $40,000. Will this fund grow back to at least $70,000?

When they bought this fund, no one advice them that this is a risky fund. As you mentioned, there are ups and downs.

When will my relative recover at least back to their breakeven point ? How long will it grow back from 20cents to a dollar

KT

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Dear KT

Your relative will have to wait for the tech fund to reach 35 cents (not $1), before they can recover their investment.

I hope that this can happen within the next few years (but I do not know for sure). Many people expect technology to recover by now, but it seems to be taking longer.

They must have invested at a bad time. Many other investors made the investment at a lower price (or have averaged out on their investments), so they are already making a capital gain in this fund.

I have some personal investment in the technology fund as well, made at about the same level as your relative. So, I will also have to wait.

In my case, I have other investments, so the gain in some funds outweigh the losses in the tech fund.

Tan Kin Lian

3 comments:

observer said...

Hi KT,

The dot.com days are no longer here to stay. It will take a long while to make back even the capital of $70K.

Maybe your relative may wish to switch camps to hedge and along the way make lesser loss.

Go for equities like stocks as most markets are rather bullish currently.

Thomas Phua said...

Many people did not average their investment when price goes down.

I bought tech fund when it was 40 plus cents. I thought why not , people buy at $1 I buy at 40 cents, then it went down to 36 cents, I bought some more, it went to 30 cents, I bought again, it went to 26 cents, buy a but more, and down it went to 18 cents, bought a little more, but it went down to 14 cents and I thought if it will collapsed to zero then. I last bought when it was 14 cents and when it last went to 12 cents, I have no confidence to buy more and after that, it start to move up again.

This way of buying can be same as dollar cost averaging, my average price is thus 23 cents.

If it moves beyond this price it is profit for me.

Try and average it when the price is down, instead of waiting for it to climb back to same level.

Alamah said...

My experience investing with NTUC Income's Funds is that it make money if you keep it long enough.

Example, the Enhanced Fund, it collapsed during 1997 Asia Financial Crisis, and it has grows above the previous high.

Switching Funds may be a good idea to recover the loss. Try Singapore Equity.

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