Investors Encouraged to Take Advantage of Investment Opportunities Presented by COVID-19 – JMMB 

JMMB financial expert, Nadine Thomas, advises investors to stay invested and take advantage of the opportunities that have been presented by the COVID-19 crisis. “There is opportunity in every crisis and this one (the COVID-19 pandemic) is no different… Now is an opportune time to invest (and) there are some good assets with strong fundamentals that are now trading at discounted prices,” said Thomas.  She was addressing online participants during one of the recent episodes of the JMMB Group weekly Goal Getter Live (webinar) series, on the company’s social media channels. This premise is underscored by investment guru, Warren Buffet, who is quoted as saying, “Be fearful when others are greedy and greedy when others are fearful”.

In sharing further details, Thomas, outlined that investors should carefully examine a company’s fundamentals namely: corporate governance policies/practices, projected growth trajectory, financial performance, cash flow, business model and strategy, to determine whether or not to include this company in their portfolio. The financial expert, however, urged investors to consult and maintain consistent contact with their financial advisors, to assist in crafting their investment strategy, in line with their: unique goals, risk appetite and timeframe/time horizon: as there is no one-size-fits-all model to investing. In addition, she highlighted that investing is to be approached with a long-term perspective, in order to reap the best results and “smooth out price volatility.” 

While noting that the stock market is still experiencing much volatility and there is much uncertainty now, Nadine recommends that individuals take a ‘phased approach” or what is referred to as the dollar cost averaging strategy, when leveraging investment opportunities, at this time. This investment strategy is, where an investor divides up the total amount to be invested across periodic purchases of a specific asset, in an effort to reduce the impact of changes in the price on the overall purchase. She further points to the global market, outlining that the Standard and Poors (S&P) 500 companies, over the last three months (up to June), have since seen 30% of those companies rebounding, although initially experiencing a falloff in stock prices. This is an indication that the market has corrected itself and a similar response is expected over time on the local stock market, though the financial expert did not give an expected timeline. 

For investors whose risk profile may not be suited to invest in the stock market, Thomas indicated that they may choose other investment options / asset classes such as unit trusts - a pooled investment fund, managed by a fund manager. Investing in unit trust allows an investor to benefit from the expertise of a fund manager to make key investment decisions and saves you time in on the daily monitoring of the assets in the fund, in addition to offering an investor diversification, even with a few thousand dollars. 

Although some assets, such as stocks and bonds, may have seen a decline in the price and there is increased volatility in the market at this time, “stay invested in your goals” was the word of advice given by the financial expert.  “For persons whose portfolios are diversified…do not become distracted or lose sight of why (you) invested in the first place, therefore, stick to your investment strategy and stay invested. While, for persons who do not have a diversified portfolio, now is a great time to make the most of the market, with the assistance of your investment advisor,” added Nadine. 

Another key investing pointer shared by Thomas, during the webinar, was the overall value of diversifying one’s portfolio, that is, the assets owned. She shared, “portfolio diversification seeks to mitigate against the risk that you face so that you are less impacted by the volatility (price fluctuations) in any specific asset.” She, therefore, encouraged investors to have a conversation with their financial advisors to examine the various asset classes such as: equities, fixed income, real estate, unit trusts and mutual funds and other alternate investment instruments, to determine the right mix, based on their specific financial circumstances, risk appetite (low to high), goals/objectives, return and time horizon. 

“One lesson that I believe that COVID-19, has taught us is the need for an emergency fund,” pointed out Nadine. She outlined that this amount should be at least equivalent to 3-6 months’ worth of one’s expenses that can be easily accessed in the event of unforeseen circumstances, such as sickness. She cautioned individuals not to be tempted to use their emergency funds for investments, because of the potentially great returns; as this can result in high interest rate debt in the form of credit cards and unsecured loans, in the event of an emergency. As such, the investment advisor emphasized that before you begin to invest it is critical to have an emergency fund in place to buffer you in times of financial mishap, like the COVID-19 pandemic. 

During the 90-minute long live event, Nadine also shared investment basics; dispelled investment myths; explained the different asset classes (equities, fixed income, cash, unit trust and alternate investment instruments); the difference between investing and saving; while answering questions from online participants. 

The JMMB Goal Getter Live series of webinars, held on Tuesdays at 8:30 p.m. via the company’s social media platforms (YouTube, Twitter and Facebook), seeks to give hope, lend expertise and share solutions that will assist clients and the wider public, to navigate the crisis; and serves as an avenue to address a cross-section of topical issues - thus underscoring JMMB Group’s commitment to being in its clients’ world.