Types of Investments in Malaysia: A Complete Guide
•By Maher Alias
Artikel ini juga tersedia dalam Bahasa Melayu
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Generally, investments are divided into two categories: real investment and paper investment.
Real Investment refers to investments involving physical assets where the items invested in include property, gold, or silver.
When we invest in gold, we can hold the gold. If we invest in property, we can hold and live in the property concerned. This is what is meant by "real investment" or it can also be called "physical investment".
"Paper Investment" refers to the type of investment that only involves paper (or online) representing the investment portfolio such as stocks, forex, or unit trust.
When we invest here, we will receive a statement in paper form containing the investment information we own, or in digital or online format. It can also be called "virtual investment".
Below is a brief explanation of the types of investments available in Malaysia.
Property investment is seen as a profitable type of investment. There are 3 main categories: subsale, auction, and under construction (undercon). The local property market has seen rapid growth, especially in the Klang Valley area, as property values have multiplied since 2008.
Some say you cannot lose money buying a house because the price will always increase. Is that statement true? It cannot be denied that house prices will always increase depending on the type of property and location. But to say buying a house will never result in a loss, that statement is not accurate.
This is because every market will have its ups and downs, including property investment. When supply exceeds demand, house prices will certainly be affected. Take a look at the lament of a homebuyer in Bukit Sentosa. They had to be patient for a long period waiting for house price appreciation because the area did not have high demand.
Gold or silver investment can be obtained either through purchasing in the form of bars, coins, jewellery, or passbook accounts. Most people will choose to invest in either gold bars or dinar and dirham. Jewellery is more suitable as an accessory or gift given its high price due to craftsmanship costs.
Regarding gold/silver investment through passbook accounts, there is a Shariah compliance issue because it does not sell physical gold. For further confirmation on the Shariah status of gold investment accounts, refer to the statement by Ustaz Zaharuddin.
Unit Trust is a form of collective investment that allows investors with the same investment objectives to pool their savings, which are then invested in stocks or other assets managed by professional fund managers.
Depending on the type of fund, fund managers may invest in the following assets:
These assets are productive assets that will generate profits for the owners. So as a unit trust investor, you indirectly own these assets.
If you invest in unit trust, you do not need to worry about managing it because the fund is managed by professional managers with a reasonable service fee.
Understand the comparison between unit trust and stock investment.
Stock investment is among the popular types of investment in Malaysia, however stock ownership among Bumiputera is still low. To start stock investment, you need a CDS account. Learn about the Types of CDS Accounts and How to Trade Stocks Without Capital.
A stock is an equity ownership right in a company. This means when you buy shares of a company, you have directly become one of the owners of that company. We can buy a small or large amount of shares depending on the money we have. Further reading: What Are Stocks?
You do not need to worry about stock investment as it is an investment permitted by Bank Negara. The buying and selling of stocks is managed by Bursa Malaysia through various registered broker companies. Meanwhile, to prevent fraud against investors, we have the Securities Commission (SC) for regulation.
If you are interested in learning about stock investment and are looking for a flexible learning resource, you can open a CDS account with me, Maher Alias, Remisier at M+, and you will certainly gain many advantages after becoming my client.
We also provide an open Telegram discussion group @mahersaham for you to join for free.
After knowing the types of investments available in Malaysia, the next question you might ask is: when is the right time to invest?
A Chinese proverb states,
"The best time to plant a tree was 10 years ago, and the second best time is now"
Perhaps you have not yet grasped the meaning of that proverb.
Investment, like a tree, takes a long time if you want to see fruitful results.
Additionally, the tree needs to be fertilised – deepening investment knowledge, experiencing the ups and downs of investment firsthand – real investment is not a get-rich-quick scheme.
Nevertheless, if you have not started investing in recent years, you can start now.
The earlier you start, the better, and this is certainly far better than not starting at all.
Want to learn about stocks? Want to know more?
But don't know where to start?
Don't worry, download the FREE ebook from Mahersaham now!
Investments are broadly divided into Real Investment (physical assets like property, gold, and silver that you can physically hold) and Paper Investment (virtual/digital assets like stocks, forex, and unit trust represented through statements or online platforms).
Not necessarily. While property prices generally trend upward, every market has its cycles. When supply exceeds demand in a particular area, property prices can stagnate or even decline. Location and property type are key factors that determine profitability.
Unit trust is a collective investment scheme where investors pool their savings, which are then managed by professional fund managers. The funds are invested across various assets including bonds, stocks, derivatives, and property. Investors pay a reasonable service fee for professional management.
To start stock investment in Malaysia, you need to open a CDS (Central Depository System) account through a registered broker. Stock trading is managed by Bursa Malaysia and regulated by the Securities Commission (SC) to protect investors from fraud.
As the proverb says, "The best time to plant a tree was 10 years ago, and the second best time is now." The earlier you start investing, the better. Investment takes time to yield results and is not a get-rich-quick scheme. Starting now is always better than not starting at all.