The “Ikan Jerung” of Bursa Malaysia

Unit Trusts vs. Direct Stock Investing

Rizal and Devi were colleagues at a manufacturing firm in Penang. During lunch breaks, the talk was always about the latest “hot stocks” on Bursa Malaysia. Rizal, feeling adventurous, decided to open a Central Depository System (CDS) account. He put RM10,000 into a penny stock he heard about on a Telegram tip group. “It’s going to the moon,” he told Devi.

Devi was more cautious. She didn’t have the time to read annual reports or track the FBM KLCI index every hour. Instead, she chose to invest her RM10,000 into a diversified Equity Unit Trust managed by a professional firm. She also set up a Regular Savings Plan (RSP) to automatically deduct RM300 from her salary every month.

Three months later, a global trade tension caused a market sell-off. Rizal’s “hot stock” plummeted 40% in two days. Panicked and needing cash for his motorcycle repair, he sold at a massive loss. He cursed the stock market as a “gambling den.” Devi’s unit trust also dropped, but only by 5%. Because her fund was diversified across 50 different companies (telecommunications, banking, and plantations), the failure of one sector didn’t wipe her out.

By the end of the year, the market recovered. Devi’s portfolio was back in the green, and her consistent monthly buying meant she bought more units when prices were low — a strategy called Ringgit Cost Averaging (RCA). Rizal, meanwhile, had no units left and a hole in his savings. He realized that while direct trading offers high rewards, it requires high Financial Literacy and emotional control. Devi, as a “passive investor,” used the expertise of fund managers to grow her wealth while she slept.

Key Takeaways: Don’t confuse “investing” with “speculating.” For most Malaysians, diversified products like Unit Trusts or ETFs are safer than picking individual stocks based on rumors. Ringgit Cost Averaging removes the stress of trying to “time the market” and builds wealth steadily over time.