Financial expert at JMMB Investments Nadine Thomas is encouraging investors to be on the lookout for new opportunities, urging them to stay invested and to take advantage of any new prospect resulting from the novel coronavirus pandemic.
Thomas, who was speaking recently at a JMMB Group’s weekly Goal Getter Live webinar series, said that there is an opportunity in every crisis, and this current pandemic is no exception.
“Now is an opportune time to invest [and] there are some good assets with strong fundamentals that are now trading at discounted price,” she said.
She underscored the need for investors to carefully examine a company’s fundamentals, such as its corporate governance policies/practices, projected growth trajectory, financial performance, cash flow, business model, and strategy. This, she said, will help determine whether or not to include this company in their portfolio.
Thomas told investors to consult and maintain consistent contact with their financial advisors and to assist in crafting their investment strategies. This she said is to be done in line with their unique goals, risk appetite, and time frame as there is no one-size-fits-all model in investing.
“Investing is to be approached with a long-term perspective, to reap the best results and “smooth out price volatility,” Thomas added.
Noting the levels of volatility and uncertainty that still exist in the stock market, Thomas recommended that investors utilise a phased approach or what is referred to as the “dollar cost averaging strategy”, in leveraging investment opportunities at this time.
This strategy allows the investor to divide the total amount to be invested across periodic purchases of a specific asset, to reduce the impact of changes in the price on the overall purchase.
Thomas also pointed to the global market emphasising that with international stock markets now being able to correct themselves, following its falloffs in stock prices, similar results are also expected locally.
For investors whose risk profile may not be suited to invest in the stock market, Thomas indicated that they might choose other investment options/asset classes such as unit trusts – a pooled investment fund, managed by a fund manager. She opined that although some assets, such as stocks and bonds, may have seen a decline in prices, and there is increased volatility in the market at this time, investors should stay invested in their goals.
“For people whose portfolios are diversified—do not become distracted or lose sight of why [you] invested in the first place, stick to your investment strategy, and stay invested. For those people 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,” she also advised.
The financial expert, during the 90-minute long webinar, also stressed the need for diversifying one’s portfolio, noting that “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 again urged investors to have discussions with their advisors to examine the various asset classes ranging from equities, fixed income, real estate, unit trusts, and mutual funds, among other alternative investment instruments — to determine the right mix, based on specific financial circumstances.
“One lesson that I believe that COVID-19 has taught us is the need for an emergency fund,” she said as she cautioned against investors becoming tempted to use their emergency funds to undertake investment projects.
“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,” she said in closing.
— Kellaray Miles