If you’re thinking about investing in Malaysia, you might want to reconsider. Here are the five worst investments you can make in Malaysia.
The 5 worst investments in Malaysia.
There are a number of reasons why investing in property can be a bad idea in Malaysia. Firstly, the returns on investment for property are often very low, and in some cases negative. This is because the prices of property tend to be volatile, and can fluctuate quite significantly. Secondly, the risks associated with investing in property are quite high, as there is always the potential for the value of the property to decrease. Finally, investing in property can be quite illiquid, as it can take a long time to sell a property if you need to access your money.Equities
Investing in equities (stocks and shares) can also be a risky proposition in Malaysia. This is because the Malaysian stock market is relatively small and illiquid, which means that prices can fluctuate quite significantly. Additionally, there is always the risk that the company you have invested in may go bankrupt, which would result in you losing all of your investment.Commodities
Commodities are another asset class that can be quite risky to invest in Malaysia. This is because commodity prices are highly volatile, and can fluctuate dramatically depending on global economic conditions. Additionally, commodities are often subject to government regulation, which can make them difficult to trade. Finally, many commodities are not very liquid, which means that it can be difficult to sell your investment if you need to access your money quickly.Currency
Investing in foreign currency can also be a risky proposition in Malaysia due to the fact that currency values can fluctuate quite significantly. Additionally, there is always the risk that the currency you have invested in may lose value against other currencies. Finally, currency investing is often quite illiquid, as it can take a long time to sell your investment if you need to access your money.Fixed income
Investing in fixed income assets such as bonds can also be a risky proposition in Malaysia. This is because the Malaysian bond market is relatively small and illiquid, which means that prices can fluctuate quite significantly. Additionally, there is always the risk that the issuer of the bond may default on their payments, which would result in you losing your investment.
Why these investments are the worst.
Lack of returns
Returns on investments in Malaysia have been lackluster in recent years, especially when compared to other countries in the region. For example, while the MSCI Malaysia Index has returned an average of 5.5% per year over the past decade, the MSCI Indonesia Index has returned an average of 9.7% per year during the same period.
Investors looking for income have also been disappointed with Malaysian investments. For instance, 10-year government bonds in Malaysia currently yield just 3%, while similar bonds in Indonesia yield 7%.High risk
Many Malaysian investments are considered to be high risk, due to factors such as political instability and corruption. For example, the country’s sovereign bond rating was downgraded by Moody’s from A3 to Baa3 in 2015, due to concerns about the country’s debt levels and fiscal management.
In addition, some industries in Malaysia are plagued by corruption and cronyism. This makes it difficult for investors to identify which companies are truly well-managed and which ones are simply benefiting from political connections.Volatile
Investments in Malaysia can be quite volatile due to a number of factors, including currency fluctuations and global economic conditions. For example, the Malaysian ringgit fell sharply against the US dollar in 2015 due to lower oil prices and concerns about China’s economy. As a result, many investors who had bet on the ringgit losing value lost a significant amount of money.Poor liquidity
Some Malaysian investments can be difficult to sell when you need or want to cash out your position. This is because there may not be a lot of buyers interested in these assets, or because transaction costs can be high (e.g., for properties). This lack of liquidity can make it hard for investors to get their money back when they need it most – for instance, if they need to sell their investment quickly in order to cover an unexpected expense.Negative real returns
Investments in Malaysia often fail to keep up with inflation, which means that they may actually lose value in real terms. For example, while the consumer price index in Malaysia has risen an average of 4% per year over the past decade, government bonds have only yielded an average of 3% per year during the same period. This means that investors who bought Malaysian government bonds 10 years ago would have lost purchasing power, even if they held onto their bonds until maturity.
These are the five worst investments in Malaysia that you should avoid. They offer little to no returns, are highly risky, and can result in negative real returns. So, what should you do with your money?
There are a few options. You could keep it in cash, which is safe but may not grow your wealth. Or, you could invest in something with higher potential returns but more risk, such as stocks or mutual funds. Whichever route you choose, be sure to do your research and consult with a financial advisor to make sure it’s the right decision for you.