I am considering to invest in funds such as First State Dividend, but the NAV for most funds in general are pretty high right now. Should I wait or buy ?

Hi Wj,

Perhaps I should explain a little bit about how UTs work.

A good UT seeks to grow the value of its NAV by having good underlying assets that appreciate over time. UTs launch at $1/10/100 per unit. Now imagine the following:

UT A launches at $1, two years later it is $1.4/unit

UT B which invests in the same mandate, region, sector, etc, as UT A, launches the same time and two years later it is $1.2/unit

The common reaction I see is people saying, "oh, UT B is cheaper and we should buy it as it is a lower price". But actually, UT A grew investor's monies better than UT B! In fact, a good UT should go up over time and you should get on the boat and ride it till you need to exit, doing DCA along the way to smoothen things out.

As an example, just take a look at UOB United SGD Fd CL A (Acc), it's just going up all these years, and are you going to say that the NAV is quite high and that you'll wait for a pull back before entering? You'll never see the price drop back to the lows of 10 years ago, as the fund manager has been growing clients monies all these years. If you hold on to this concept of waiting for the UT price to drop, you'll never enter the fund since you will always be waiting.

To determine if the fund is favourable to invest now, the question will be: Is there a right time to invest?

Throughout my career I have compiled a list that shows all the peaks on some of the best performing funds from AIA. However, each peak is covered by the next peak after some time. Now, should we wait for the market to crash or when will it actually crash?

Therefore, focus with the right investment strategy by knowing your investment objective. Then decide the tenure and decide if a lump sum or smaller amount works. Finally, invest into assets that suits your risk appetite.

Of course, consider dollar cost averaging if that helps to hedge the price risk. Here is some info that may be useful: https://www.blog.pzl.sg/dollar-cost-averaging-s...

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