Is Unit Trust Investment Less Risky?
Unit trust investment always act as best investment for novice investors. Novice or youngster or financially uneducated like unit trust because they are told by unit trust agent that unit trust is secure and low risk investment. Unit trust can give 10-12% of return to investor. This return definitely enlighten novice investor since FD only give 3% of return. This point give additional points to novice investor, less risk and high return.
Have you ever think where on earth does the unit trust put your money? They put it in stock market. Yes, stock market as well. Whenever novice heard of stock market, it is dangerous, unsecure, risky, loss money, bankruptcy and etc. If heard unit trust, they think of secure, less risk and high return. This is the ironic of unit trust.
In actual fact, unit trust company work as intermediate. Unit trust agents gather the money of investor. Then fund manager hired by unit trust company invest the pooled money in stock market according to the theme of the fund. Performance of unit trust depends on stock market. In simple words, if stock market goes well, definitely unit trust perform well. If stock market crash, unit trust have the same fact. You can do the study yourself if you still doubt about it.
