strategy during falling market

There are good questions asked on unit trust recently.

"should I sell my unit trust now?"
"no."

"what if the market keep going down after this?"
"you will get more units."

"huh? but I'm not buying with the Dollar Cost Average method, I buy one-time only."
"Although you buy one-time, you will still get more units. If a company is making profit, it will distribute dividends to the shareholder right? Unit trust also invest in these companies, and the dividend distributed will be reinvest. If the market is dropping, when the dividend is reinvested, you will get more units, isn't it?"

Example: if you invest RM1000 on a RM0.25 fund, you will get 4000 units. If the price of the fund drop until RM0.20, when the dividend is reinvested (assuming the dividend is 10% of RM1000 = RM100), you will get extra 500 units.
(All calculations excluding service charge)

The Malaysian economy is doing well at the moment, with companies recording record earnings and dividend pay-out. The current drop in Bursa is mainly due to political reasons and the uncertain US economy. So don't panic if you are an existing investor, because with lower price mean more units for you when the dividend is reinvested.

Since unit trust is for a long run, you can sell at a higher price later on with more units. Buy low, sell high! But to ensure you will get better profit, do Dollar Cost Average!

Below is a very meaningful article for to read. Don't worry, be happy!

http://www.publicmutual.com.my/page.aspx?name=art_remaincalm_pg01