if you wouldve studied the financial crisis in depth like myself you would understand the role of the regulators. At one moment the market cannot fall 5% and at the same time it cannot rise more than 5%. These are regulations that keep the market in check (Simple words, explanatory logic behind it) . However there are market corrections as it is an economic nature of demand and supply. I cannot explain the details to you, you have to look it up yourself.
What do you mean by "at one moment the market cannot fall 5% and at the same time it cannot rise more than 5%"
What do you mean by "at one moment the market cannot fall 5% and at the same time it cannot rise more than 5%"
In one day, the stock market cannot fall by more than 5%. Also in one day it cannot rise more than 5%. The regulations on the stock market and AMC's are quite strict. This helps in controlling movements of the stock market on a daily basis.
Please provide a specific reference in a regulator or exchange rule that states the market:
At one moment the market cannot fall 5% and at the same time it cannot rise more than 5%. These are regulations that keep the market in check (Simple words, explanatory logic behind it)
I would be very curious to see which regulator enforces such a requirement.
Also, what is the MER and the management fees for the mutual funds? Is there a prospectus? Closed-end or open-end mutual fund?
Who are portfolio managers? What is their prior experience and performance? Who is the fund manager? Where/with whom are the assets custodied?
These limits are known as lock limits. The main reason for these limits is to prevent investors from substantial losses due to the volatility found in futures markets. KSE cuts lower lock limit, raises upper lock limit
I think the rate has been revised again, not sure
portfolio managers are those that manage your portfolio while fund managers are those that analyse, and set benchmarks for their funds. Each fund manager is allowed max of 3 funds to prepare. Fund managers set benchmarks according to the market and if they outperform their benchmark they get paid a bonus. So they have an incentive to out perform.. Usually they are highly experienced and qualified. At UBL Fund Managers all our fund managers are CFA charterholders. They have studied finance and understand it more than anyone who isnt a charterholder. So the decisions they make are exceptional. The assets are custodied at Central Depository Company of Pakistan. They create a trust bond between AMCs and investors. So your money is always in safe hands
Regarding closed end and open ended funds many AMCs offer both however over the period of time closed end funds will perish as the trend has changed
Are you stating KSE halts trading for a while when there is a 5 pct move in either direction?.This is not the same as not allowing to drop or rise more than 5 pct. For when market opens it will do what it will do.
Your post gives the wrong impression that the investor is somehow protected against a > 5% drop.
Are you stating KSE halts trading for a while when there is a 5 pct move in either direction?.This is not the same as not allowing to drop or rise more than 5 pct. For when market opens it will do what it will do.
Your post gives the wrong impression that the investor is somehow protected against a > 5% drop.
I attachched the news article as a proof that we use lock limits. Lock limits is very extensive so I suggest Please read more about lock limits and you will understand how it works and what i said about it.
Please let me know which questions were unanswered and I'll try to answer tthem to
The best of my abilities. I'm usually in a hurry so I mightve left them out.
Stock markets do not create prosperous societies....Pakistan has to find alternative methods.
Stock market is prosperous in the long run, if one is shy of taking too much exposure of the market then they invest in debt instruments. They give a good return aswell. However nothing can give as much return as stock markets (except property but then there are several issues with property aswell)
Saying that the market doesnot create prosperous society is a biased statement on your behalf. US and UK (although have experienced the most disastrous impact of the financial crisis are still progressing as an economy and society)
This is simply short term band aid to keep the market pumped up. Banning shorting, keeping the lows idea at 1 pct, bumping upside to 10 pct.
Exactly how does this help the long-term investor. Why would you even focus on this to reassure investors
In the short term the mkt is speculative. In the long run it is a weighing machine as the saying goes.
As a financial advisor, in my opinion, so far you have focused on short term market catalysts. Which have zero effect on long term returns.
One does not need fancy financial degrees to understand this simple concept - the only free lunch is asset allocation. Periodic rebalncing simply gets asset allocation back in line with target.
Anyway, overall you have come across as professional. Just want to thank you for that.
Good luck to you.
Thanks, also the lock limit is for short term. people investing in stocks are on the edge and require this short term comfort even if investing for the long run. investing in stocks for the long run is advisable as the shakes are not that impact-able and returns are good (You might say im not focusing on the loss and there is a good reason for it. for the past ten years the stock fund at ubl is averaging around 23% annually, it may go down and up over the year but the returns have been positive if looked annually even in 2008). Ofcourse there is a risk but if you are investing in stocks then you are bound to take high risks. if your risk apetite is zero then i would suggest you to invest in money market and income funds.
I don't agree that even those who invest for long term require this short term comfort. A value investors welcomes volatility. And does not need these measures.
By the way, the incentive flow beating the index fund annually can lead to unwelcome outcomes. As these funds become index fund light - with higher expense ratio.
I don't agree that even those who invest for long term require this short term comfort. A value investors welcomes volatility. And does not need these measures.
By the way, the incentive flow beating the index fund annually can lead to unwelcome outcomes. As these funds become index fund light - with higher expense ratio.
Index funds can be good and bad. It copies the index in this case kse100 or kmi30 for islamic. We dont deal with index funds and have our own funds. These our custom made funds with different asset allocations.
Index funds can be good and bad. It copies the index in this case kse100 or kmi30 for islamic. We dont deal with index funds and have our own funds. These our custom made funds with different asset allocations.
I was simply stating that the incentive - annually beating the relevant index fund - may have undesired outcomes.
I work for a big bank in the City of London, listen carefully, stick to Vangaurd. Long term, 8% growth without any stress. Fund managers are fraudiyas, trust me i've worked for some, they take your money in fees and commissions.
I work for a big bank in the City of London, listen carefully, stick to Vangaurd. Long term, 8% growth without any stress. Fund managers are fraudiyas, trust me i've worked for some, they take your money in fees and commissions.
These limits are known as lock limits. The main reason for these limits is to prevent investors from substantial losses due to the volatility found in futures markets.....
Sorry, but those limits were put in place to discourage greedy big time brokerage houses to massively swing the markets in intra-day trading to make loads of money. Pakistani markets are small and susceptible to manipulation by 1 or 2 big traders.
