Answers to some of your questions about investing

Is the money I invest in a mutual fund/unit trust insured?

No. Mutual fund/unit trust investments are typically not insured and share values will fluctuate. An investor's shares may be worth more or less than their purchase price at the time of sale. It is recommended that you read the Prospectus carefully before investing.

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Q2:

When is the best time to invest? When the share price is high? When the share price is low? Or does it make a difference?

While traditional market wisdom says "Buy low, sell high" that is easier said than done. Because people tend to be optimistic in good times and pessimistic in bad times, many do just the opposite. The best time to invest depends more on your goals and financial situation than on market conditions.

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Q3:

What will happen if the stock market takes a big loss?

Risk quite simply, is the chance of loss. It is also a factor which allows investors the potential for achieving higher return. The acceptance of more risk may result in a higher overall return in the future. Once you have completed your Personal Investment Profile, you will have a better idea of your current risk tolerance.

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Q4:

What is dollar-cost averaging?

Dollar-cost averaging means investing regularly (usually monthly or quarterly) the same amount regardless of whether the prices of shares you’re purchasing are high or low. The amount of shares purchased will vary as the price fluctuates. It’s a way to smooth out the market’s ups and downs by averaging out your investment costs.

This method of investing eliminates the need to decide when to invest, helps to avoid the temptation of timing the market and encourages discipline in your investment program.

HOW DOLLAR-COST AVERAGING WORKS

$500 INVESTED REGULARLY FOR 5 PERIODS
(Price trends chosen are for illustrative purposes only.
Different trends will result in different average costs. )

MARKET TREND

UP DOWN MIXED

INVESTMENT ($) SHARE
PRICE ($) SHARES
PURCHASED SHARE
PRICE ($) SHARES
PURCHASED SHARE
PRICE ($) SHARES
PURCHASED

500 10.00 50 10.00 50 10.00 50

500 9.25 54.05 10.50 47.62 11.00 45.46

500 8.75 57.14 11.25 44.44 9.00 55.56

500 8.25 60.61 11.75 42.55 11.00 45.46

500 8.00 62.5 12.00 41.67 10.00 50

2,500 44.25*** 284.3 55.50*** 226.28 51.00*** 246.48

AVG.COST: $8.79*
AVG.PRICE: $8.85** AVG.COST: $11.05*
AVG.PRICE: $11.10** AVG.COST: $10.14*
AVG.PRICE: $10.20**

* AVERAGE COST IS THE TOTAL AMOUNT INVESTED DIVIDED BY SHARES PURCHASED.
** AVERAGE PRICE IS THE SUM OF THE PRICES PAID DIVIDED BY NUMBER OF PURCHASES.
***CUMULATIVE TOTAL OF SHARES PRICES USED TO COMPUTE AVERAGE PRICE.

Source : Citibank N.A.

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Q5:

How often should I review my investment portfolio?

Assuming your portfolio is following a well-defined strategy that’s appropriate for your personal situation, you should review that strategy at least once a year.

If you are not following a specific investment plan that’s attuned to your goals, time horizon, risk tolerance and financial situations, you should do it immediately. A good way to start is with a Personal Investment Profile from Citibank.

To find out how Citibank can help you to invest, send us your Personal Investment Profile or set an appointment with us at your convenience. Or call our 24-Hour CitiPhone Banking on (65) 224 5757.

		Answers to some of your questions about investing:
	Is the money I invest in a mutual fund/unit trust insured? When is the best time to invest? When the share price is high? When the share price is low? Or does it make a difference? What will happen if the stock market takes a big loss? What is dollar cost averaging? How often should I review my investment portfolio?