How to calculate profit, loss and brokerage fee in stock market trading

By the end of this part, you will have the basic knowledge to enter stock market.
But the most important thing to remember is that, make sure that you are investing, not gambling in stock market.
Part 1 – How to Open Trading and CDS Account for Trading in Bursa Malaysia?
Part 2 – How to Buy and Sell Shares in Bursa Malaysia?
Part 3 – How to Determine Trading Settlement in Bursa Malaysia?
Part 4 – How to Calculate Profit, Loss and Brokerage Fees in Stock Market Trading?
In Part 3, we see that the settlement formula as follow.
Total Buy Settlement (RM) = Value of Shares + Brokerage Fees + Clearing Fees + Stamp Duty
Total Sell Settlement (RM) = Value of Shares – Brokerage Fees – Clearing Fees – Stamp Duty
Now I will show you on how calculate all the component in the formula.

Step 1 – Calculate the value of Shares

This is easy. For example if you buy or sell 1,000 units of A shares at RM5.00 then you have to pay or received RM5,000.

Step 2 – Calculate Brokerage Fees

Brokerage fees is really depends on your chosen Broker. Normally it range from 0.05% to 0.7% from contract value depending on your value of transaction, account type and trading type. However, broker normally impose minimum brokerage fees per transaction. You can check  for online brokerage fees in this comparison table.
Take the same example as above, and with brokerage fees of 0.42%.
Brokerage Fees = 0.42% x RM5,000 = RM21

Step 3 – Calculate Clearing Fees

Clearing Fee is charged by Bursa as the clearing house. The fee is 0.03% from contract value or value of shares but subjected to maximum of RM1,000.00
Take the same example as above.
Clearing Fees = 0.03% x RM5,000 = RM1.50

Step 4 – Calculate Stamp Duty

Stamp duty is a charge by the Government and Broker will collect on their behalf. You have to pay RM1.00 for every RM1,000.00 of contract value or value of shares and rounded up to the nearest ringgit subject to maximum value of RM200.00
Take the same example as above.
Clearing Fees = RM5

Step 5 – Calculate Profit (or Loss)

Base on formula above we take the following example,
Buy 1,000 units of A shares at RM5.00 and sell it later at RM6.00
Shares Value when buying  = RM5 x 1,000 = RM5,000
Shares Value when selling = RM6 x 1,000 = RM6,000
Buy Settlement =  RM5,000 + 0.42% x RM5,000 +  0.03% x RM5,000 + RM5 = RM5,027.50
Sell Settlement = RM6,000 – 0.42% x RM6,000 –  0.03% x RM6,000 – RM6 = RM5,967.00
Net Profit = RM5,967.00 – RM5,027.50 = RM939.50

Step 6 – What is Contra?

In Part 3, we already understand that when you buy shares, you only have to pay it at T+3. What happen if you sell the shares that you bought earlier before T+3 or you pay for it?
We call this Contra. What will happen is that, your broker will calculate the different between buy and sell settlement. The different sum will be credited or debited in your trust account depending whether you are making profit or loss.
If you make profit from contra transaction, we call it Contra Gain. If otherwise we call it Contra Loss.

How to Buy and Sell Shares in Bursa Malaysia

This is the Part 2 on the series. I hope that you understand the process and the option available when opening your trading and CDS account which explain in Part 1.
If you read Part 1 before I publish Part 2, please revisit that page as I write in additional information in relation to cash upfront or collateralised account which I think quite important.
Part 1 – How to Open Trading and CDS Account for Trading in Bursa Malaysia?
Part 2 – How to Buy and Sell Shares in Bursa Malaysia?
Part 3 – How to Determine Trading Settlement in Bursa Malaysia?
Part 4 – How to Calculate Profit, Loss and Brokerage Fees in Stock Market Trading?

Step 1 – Deposit Cash

Once you open Trading and CDS Account, the next steps before buying shares is deposit cash to your trust account. Depending on your broker, you can make deposit either via cheque, cash or through online banking to your broker bank account.

Step 2 – Check Shares Price

In Bursa Malaysia, shares are traded on all working days of Federal Territorries (Wilayah Persekutuan) between 9.00am to 12.30pm for morning session and 2.30 pm to 5pm for afternoon session. However, Bursa Malaysia allow orders to be send 30 minutes before each session but no matching will be done.
For offline trading account you can call your remiser or dealer representative to check shares price.
If you have an online trading account, by now you should have username, password and broker website address. Login to your account and get familiarised with the interface.
Make your favourite folder and add your favourite counter in that folder so that you can easily monitor the shares price movement.
Shares price will move based on tick sizes set by regulator. The tick size is the minimum price variation between the buy and sell price for a share.
The table shows the tick sizes for shares listed in Bursa Malaysia.

Shares Price	Tick Size
Below RM1.00	0.5 sen
RM1.00 to RM2.99	1 sen
RM3.00 to RM4.99
RM5.00 to RM9.99
RM10.00 to RM24.99	2 sen
RM25.00 to RM99.98
RM100.00 and above	10 sen

Step 3 – Initiate Buy Order

When you satisfy with the choosen counter after researching the company fundamental or technical analysis, you can start place a buy order.
In Bursa Malaysia, the minimum number of shares or stocks you can buy or sell per transaction is 100 units. In other word, if the shares price at RM1 per unit, you need at least RM100.
For Offline account, call your remiser or dealer representative to place an order. He or she will key-in your order based on your choosen price and amount of shares. The order will be send electronically to Bursa Malaysia computer system.
Bursa Malaysia system will check whether there is any seller that match your price. If there is no seller, your order will be put in queue until there is seller that willing to sell that match your price. Your remisier will to update you on the status of your order.
For Online account, place your order through trading interface by specifying your choosen counter, number and quantity of shares to buy. The trading interface will send the order to your broker computer system and subsequently route it to Bursa Malaysia computer system.
The same process as above will occur in Bursa Malaysia computer system. You can see the status of your order in your trading interface.

Step 4 – Initiate Sell Order

After succesfully buy your choosen shares as in Step 3, you may sell it anytime during trading hours. If you notice that the shares price appreciate and you already make profit, you can send a sell order. The process is similar as in Step 3 but make sure that you place a sell order instead of buy.
For both buy and sell order, a contract note will be sent to you by your stockbroking company to confirm your transaction.

Central Depository System (CDS)

Central Depository System (CDS)

when we want to start buy share, the 1st account we should have is CDS account - Central Depository System.


What is CDS?

the CDS acts as a means of representing ownership and movement of securities. CDS account holders enjoy the conveniences if obtaining electronic securities transfer and trade settlement.


Who may open a CDS account?

An individual who has reached the age of eighteen (18) years as of the application date.



Why do I need to open a CDS account?

You need to open a CDs account to buy and/or sell shares, and to carry out other CDS transactions on all equity and non equity counters (i.e. bonds, loan sticks, warrants, etc.) which have been prescribed into the CDS.


How do I open a CDS account?

You can open a CDS account with any Authorised Depository Agents (ADAs). All stockbroking companies in Malaysia are currently ADAs.

source from Bursa Malaysia - Klse


Two Type Of CDS account

1) Direct CDS account
CDS is held under client's name
annual report, voucher, dividend direct send to you.


2)Nominee CDS account

- CDS is held under company's

such as when open with OSK, its will under OSK Nominees.

-all annual report, voucher will send to your brokerage company, customer have to call for request.

- dividend also will send to the brokerage company, and the company will bank in to your account with charges your services charges

The Financial Planning Process

THE FINANCIAL PLANNING PROCESS

Most people want to handle their finances so that they get full satisfaction from each available dollar. Typical financial goals include such things as a new car, a larger home, advanced career training, extended travel, and self-sufficiency during working and retirement years. To achieve these and other goals, people need to identify and set priorities. Financial and personal satisfaction are the result of an organized process that is commonly referred to as personal money management or personal financial planning. Personal financial planning is the process of managing your money to achieve personal economic satisfaction. This planning process allows you to control your financial situation. Every person, family, or household has a unique financial position, and any financial activity therefore must also be carefully planned to meet specific needs and goals. A comprehensive financial plan can enhance the quality of your life and increase your satisfaction by reducing uncertainty about your future needs and resources. The specific advantages of personal financial planning include Increased effectiveness in obtaining, using, and protecting your financial resources throughout your lifetime. Increased control of your financial affairs by avoiding excessive debt, bankruptcy, and dependence on others for economic security. Improved personal relationships resulting from well-planned and effectively communicated financial decisions. A sense of freedom from financial worries obtained by looking to the future, anticipating expenses, and achieving your personal economic goals. We all make hundreds of decisions each day. Most of these decisions are quite simple and have few consequences. Some are complex and have long-term effects on our personal and financial situations. The financial planning process is a logical, six-step procedure: (1) determining your current financial situation (2) developing financial goals (3) identifying alternative courses of action (4) evaluating alternatives (5) creating and implementing a financial action plan, and (6) reevaluating and revising the plan. Step 1: Determine Your Current Financial Situation In this first step of the financial planning process, you will determine your current financial situation with regard to income, savings, living expenses, and debts. Preparing a list of current asset and debt balances and amounts spent for various items gives you a foundation for financial planning activities. Step 2: Develop Financial Goals You should periodically analyze your financial values and goals. This involves identifying how you feel about money and why you feel that way. The purpose of this analysis is to differentiate your needs from your wants. Specific financial goals are vital to financial planning. Others can suggest financial goals for you; however, you must decide which goals to pursue. Your financial goals can range from spending all of your current income to developing an extensive savings and investment program for your future financial security. Step 3: Identify Alternative Courses of Action Developing alternatives is crucial for making good decisions. Although many factors will influence the available alternatives, possible courses of action usually fall into these categories: Continue the same course of action. Expand the current situation. Change the current situation. Take a new course of action. Not all of these categories will apply to every decision situation; however, they do represent possible courses of action. Creativity in decision making is vital to effective choices. Considering all of the possible alternatives will help you make more effective and satisfying decisions. Step 4: Evaluate Alternatives You need to evaluate possible courses of action, taking into consideration your life situation, personal values, and current economic conditions. Consequences of Choices. Every decision closes off alternatives. For example, a decision to invest in stock may mean you cannot take a vacation. A decision to go to school full time may mean you cannot work full time. Opportunity cost is what you give up by making a choice. This cost, commonly referred to as the trade-off of a decision, cannot always be measured in dollars. Decision making will be an ongoing part of your personal and financial situation. Thus, you will need to consider the lost opportunities that will result from your decisions. Evaluating Risk Uncertainty is a part of every decision. Selecting a college major and choosing a career field involve risk. What if you don’t like working in this field or cannot obtain employment in it? Other decisions involve a very low degree of risk, such as putting money in a savings account or purchasing items that cost only a few dollars. Your chances of losing something of great value are low in these situations. In many financial decisions, identifying and evaluating risk is difficult. The best way to consider risk is to gather information based on your experience and the experiences of others and to use financial planning information sources. Financial Planning Information Sources Relevant information is required at each stage of the decision-making process. Changing personal, social, and economic conditions will require that you continually supplement and update your knowledge. Step 5: Create and Implement a Financial Action Plan In this step of the financial planning process, you develop an action plan. This requires choosing ways to achieve your goals. As you achieve your immediate or short-term goals, the goals next in priority will come into focus. To implement your financial action plan, you may need assistance from others. For example, you may use the services of an insurance agent to purchase property insurance or the services of an investment broker to purchase stocks, bonds, or mutual funds. Step 6: Reevaluate and Revise Your Plan Financial planning is a dynamic process that does not end when you take a particular action. You need to regularly assess your financial decisions. Changing personal, social, and economic factors may require more frequent assessments. When life events affect your financial needs, this financial planning process will provide a vehicle for adapting to those changes. Regularly reviewing this decision-making process will help you make priority adjustments that will bring your financial goals and activities in line with your current life situation.

Pumpkin Soup

Ingredients
• 1 1/2 kg pumpkin, peeled and cubed
• 1 onion, sliced
• 50 g butter
• 2 garlic cloves, peeled
• 1 ltr chicken stock
• 1 ltr water
• 2 tbsp crème fraiche
• 1 pinch of nutmeg
• 1 pinch of cinnamon
• 1 tsp white sugar
• 1 tbsp olive oil
• 2 tbsp maple syrup
• salt and pepper

Step 1: Cook onions and garlicPlace the saucepan on a medium to high heat, and when hot, add the butter, letting it brown a little, followed by the onion. Sweat the onion for about 5 minutes. Now add the garlic, stir, and continue cooking.

Step 2: Add the pumpkin and stockWhen the onion is slightly brown, add the pumpkin, chicken stock and half of the water. Bring it to a boil, then simmer for 20 to 30 minutes.

Step 3: Season soup and remove from heatWhen the soup has been cooking for roughly 20 minutes, add the maple syrup, season with salt and pepper, stir briefly and take it off the heat.

Step 4: Blend the soup
Ladle the soup gradually into the blender. As you go, drain the water back into the pan. This can be added later if necessary. Release the steam from the blender before continuing. Now, pulse the soup two or three times before blending at a medium speed for about half a minute. Add a tablespoon of crème fraiche and blend again. then transfer to another saucepan or bowl
Repeat this same process with the remaining pumpkin soup.

Step 5: ServePour the steaming pumpkin soup into serving bowls.

Stir-Fried Pumpkin with Eggs

Ingredients

• One Pumpkin , weighing about 1 kg
• 3 tablespoons vegetable oil
• 3 large cloves garlic, peeled and minced
• 1 tablespoon fish sauce
• 4 large eggs
• ¼ teaspoon ground white or black pepper

Instructions

1. Peel the pumpkin and cut it into quarters. With the side of a spoon, scrape off the seeds and the fibers. Cut the pumpkin into 1-inch cube
2. Put the vegetable oil in a wok, and set it over medium-high heat. When the oil is hot, add the garlic; stir-fry until fragrant.
3. Add the pumpkin to the wok along with the fish sauce. Cover it with plain water and boil until the pumpkin is soft enough for you to pierce the tip of a knife into it easily, yet still firm enough to hold it shape. This should take about 10-15 minutes. The goal is to use the water to soften the pumpkin and let it evaporate, so there’s no need to replenish the water.
4. Once the pumpkin is soft, make a well in the middle and crack the eggs right into it; stir.
5. Once the eggs are cooked, remove the wok from heat. Sprinkle the ground pepper on top. Serve warm with rice.

 

What is Financial Planning?

Home / Articles & Help Guides / What is Financial Planning?

What is Financial Planning?

Financial Planning can mean many different things to many different people, typically as a person goes through their life they will be faced with many different stages of Financial Planning such as:

• Saving for a house deposit
• Mortgage Planning
• Saving for a Family
• Family Protection ensuring loves ones are looked after
• Saving for retirement, ensuring pension income will be sufficient
• Getting ready for retirement, choosing the right annuity
• Estate Planning & Tax planning

This is just a very broad example of how someone’s priorities may change throughout their life, now lets consider the process.

The Financial Planning Process

Financial planning is a process of setting objectives, assessing assets and resources, estimating future financial needs, and making plans to achieve monetary goals. Many elements may be involved in financial planning, including investing, asset allocation, and risk management. Tax, retirement, protection planning including life assurance and estate planning are typically included as well.
Financial planning plays a starring role in helping individuals get the most out of their money. Careful planning can help individuals and couples set priorities and work steadily towards long-term goals. It may also provide protection against the unexpected, by helping individuals prepare for things such as unexpected illness or loss of income.
As mentioned Financial planning may mean different things to different people. For one person, it may mean planning investments to provide security during retirement. For another, it may mean planning savings and investments to provide money for a dependent’s college education. Financial planning may even involve making career-related decisions or choosing the right insurance products.
Many individuals choose to use the services of financial planners to help them reach their goals. A financial planner is a professional who provides advice and guidance for a wide spectrum of financial planning issues. Financial planners may or may not be certified and offer varied levels of experience, it is important to make sure you choose a financial adviser that is right for your needs, care should be taken to make sure you research local advisers and prepare questions you want to ask them in advance.
Though a financial planner may make developing a financial plan easier, hiring one is not at all a necessity. There are many books, computer programs, and other resources available to help individuals with financial planning. Furthermore, there is a wealth of related information available on the Internet. The decision to hire a financial planner may depend on many things, including the financial worth of the individual, his or her goals for the future, and the amount of research the individual is willing to perform.
Their have been many changes put in place and are due to be put in place by the FSA, The Financial Services Authority. When it comes to choosing a Financial Planner must people consider an Independent Financial Adviser (Click this to see a full description of what an Independent Financial Adviser is) to be the must suitable to meet their Financial Planning needs, this is because they provide unbiased advice because they are not tied to a particular provide and so can recommend products as services from the whole of the market.
All too often, people delay planning for the future. They may feel such planning should take a back seat to staying financially afloat in the present. However, even those living from paycheck to paycheck can benefit from financial planning by creating a budget. A budget can be used to determine what is actually spent each month and find ways to trim or even eliminate unnecessary or out-of-control expenditures.
The right time to create a financial plan is right now. No matter what your income level or what your hopes for the future, you need a solid plan to achieve your goals. Drifting through life without carefully set goals and well-researched methods of achieving them is a recipe for disaster. To enable your money to offer you more of what you want out of life, start creating a financial plan today.