Observation

It is always favorable to the investors to purchase securities after the market crash (i.e. at low prices);

Lower purchase price will allow the investors to achieve higher rate of return in future when the market stages a sustainable recovery;

Therefore, there is no better time than now to apply the concept of Dollar Cost Average (DCA) as an investment strategy, since nobody can accurately predict when the market will bottom out.

Dollar Costs Averaging (DCA) is a prudent investment strategy that allows investors to accumulate more units as the market falls with a predetermined regular investment amount over a fixed interval.

Not The Time To Panic But Time For Wise Investments In Bursa

The current sluggish momentum in the local bourse is not because of any fundamental weakness but more due to jittery investors sentiments, said CIMB-Principal Asset Management Bhds chief investment officer, Raymond Tang.

The local market has already factored in the impact of the financial meltdown in the United States and Europe, he said, adding that it is also adjusting and taking into account the recession that is expected to take place in the United States.

"I think our market is less volatile, (but whether) it has bottomed, I think it is still too early to say (no one knows) how much further the engine (financial market in the West) has been damaged," he said during a briefing on how to invest in a difficult market.

At 4pm the Kuala Lumpur Composite Index shed 18.89 points to 947.17. CIMB-Principal year-end target for the Index is 1,000 points.

Hence, it is not the time to "panic" but the time to make wise investment decisions as it has been proven that when the market goes down it will rebound and there will be gains to be made.

Tang said even during the massive downturn, the local bourse did not take a nosedive like the other regional markets.

"Malaysia's market fell far less then the neighbouring countries. If you see in the last two weeks, the local bourse fell between six and seven per cent versus the neighbouring countries, which fell 20-30 per cent. But, of course when the markets rally, we go up less."

For Malaysia, it is more of a "pot hole" and not a "bump."

"Hold on for a while because the whole market is in chaos. So, explore the situation and be less panicky. Those with a clearer mind will profit compared with those who panic," he said.

Investors should also focus on a 3-5 years time horizon, said CIMB-Principals chief executive, Datuk Noripah Kamso.

It is just time to slowdown a bit, take a look around and when things are fine, move ahead, Tang said, adding that even CIMB-Principal has deferred plans to launch about two funds, of which one is a real estate fund.

"The funds were planned for last year, we deferred it for six months, then another six months as there is no point selling funds at the current market situation," he said.

As for funds exposed to the global market, he said CIMB-Principal has positioned itself in companies that will survive recession.

On the other hand, Noripah said CIMB-Principal has reached out to the investing public via its new Flagship Fund initiative to enable the investing public to invest defensively during the current market volatility. The flagship fund consist of eight core funds with consistent long-term risk adjusted returns. She said the funds are widely diversified across different sectors and assets.