Before venturing into any of the investments, you should have a thorough understanding of the risks and rewards of each particular asset class making up the product.

For example, if your remisier recommends you to purchase a bond with an attached warrant, you should analyse the merits of the share and warrant separately before making a decision. Suppose the conditions of the warrant were attractive but the company is having cash flow difficulties, would you still invest? The answer is an emphatic no.

This workshop has provided you with the risks and rewards of the basic asset classes. You may use this knowledge to make an informed judgement as to the merits of almost any investment. For those who are not initiated, it can be confusing to read the advertisements promoting the various investment products offered by financial institutions.

To buy in to these products you need to be aware of the most basic investment rule. It applies to any investment product and any time frame. It is as sure as the statement, you will die and you will pay taxes. The rule is, there is no free lunch. It also means, the higher the gain, the higher the risk. It also means, it is impossible to eliminate risk.

Ask the fund representative a few simple questions before signing on the bottom line.

The questions are:

• What is your fund’s performance versus the KLSE index over 1, 5 and 10 years?
• How does your fund’s performance measure versus similar funds offered in the marketplace?
• What are the penalties for early withdrawal?
• What are the fees?
• What are the risks and rewards of your fund based on different economic scenarios?