Tan Kin Lian's Blog: Growth Policy and Growth Fund

Thursday, February 15, 2007

Growth Policy and Growth Fund

A customer told me that he is confused between the Growth policy and the Growth fund.

I agree. It is unfortunate that we use the same name for two different products.

Here is the difference:

* the Growth policy is a single premium endowment policy
* the Growth Fund is an investment fund which has 70% in equity and 30% in bonds.

Sorry about this confusion. Do take note of the difference.

7 comments:

Anonymous said...: Dear Mr Tan,

I really need your advice regarding my investment in the technology fund that my Income agent advised me to invest in a few years ago. I invested $10k but today its value has dropped to about $3k. I would like to know if this technology fund is part of the Income's Growth fund that you are talking about? Should I hold on to my investment?

KC; February 19, 2007 2:09 AM
Tan Kin Lian said...: The Technology Fund is a specialised fund and is NOT a part of the combined fund.

I am surprised that you are still showing a large loss. I believe that the Technology fund has recovered a significant part of the past loss by now.

Many investors who averaged out on their cost of investments are now showing a profit.; February 19, 2007 8:26 AM
Anonymous said...: Dear Mr Tan,

Thank you for your response. It is not true that the Technology fund has recovered. As I had written, not only I did not make any money, I experienced a 70% loss of my investment.

KC; February 19, 2007 10:45 AM
Thomas Phua's Blog said...: Tech Fund when introduced was at $1 offer price then.

When the Tech bubble burst, the price plunge to as low as $0.10.

I started to buy after it burst at $0.45 thinking why not, it is half price already.

Then it went down to $0.35, I bought to average.

It went down to $0.24 and I have no choice but to average and buy in again.

It went down to $0.18 and I average again.

At $0.12 I bought again.

At $0.10 I surrender because I was worried it will go bust and down the drain.

The Tech Fund reverse and it is now $0.253 bid price.

This is so call dollar cost averaging. My average price is $0.223 cents.

I am now having a small profit margin having spent $60,000 and if I liquidate now, it is worth $64,000.

Not much of a gain, but still waiting for better gain if it don't swing down.

I must say that to do dollar cost averaging, one need to have the means to follow through.

"Risk is to your advantage" as what Mr Tan advocates and this way of buying and managing is exactly what Mr Tan teaches.; February 21, 2007 10:24 AM
Anonymous said...: Dollar cost averaging works only if the average trend is upwards. If you had bought at one dollar, there is no way you will have a profit now.

Btw dollar cost averaging is the song insurance advisers sing to get their clients to invest in regular premium ILPs that yield the highest level of commission for them.

Mr Tan, I have 2 questions which I hope you can answer me:

1. What is the cost difference in terms of premium do I pay if I invest in an Income ILP through 1 lump sum instead regular monthly premium for the same amount?

2. If I want to invest more, is there a cost difference if I top-up my single premium ILP instead of purchasing another one? Will my adviser still get a commision if I choose to top-up instead?

Thank you for answering my questions!

KC; February 27, 2007 11:38 AM
Thomas Phua's Blog said...: I sang my own song from $0.45 and if I stay put not doing averaging, I will be losing 50%.

Now I am at least slightly profitable. If I keep thinking that agent wants to earn commission and keep being so calculative, I would not do the averaging. And I keep getting suspicious of agent's intention, then I deserve to lost 50% instead of gaining a small profit.; February 28, 2007 10:03 PM
Anonymous said...: Hi Tan,

Please remember to reply my 2 questions above. I'm referring specifically to Income ILPs.

Thanks,
KC; March 01, 2007 7:21 PM