Whilst this article serves as information, please note it does not constitute advice. It is important that you engage together with your personal financial planner. You should discuss your individual needs, current investment portfolio and design a tailor made, structured plan that meets your goals and objectives.
1. Diversification:
Markets are continually evolving. How often in the investment world do you hear the saying don’t keep all your eggs in one basket? If you have time in the market and want to mitigate losses, then you should consider diversification. Think in lines of a balanced spread across the various asset classes. Examples, stocks, bonds, cash, equities, commodities, ETF’s and derivatives. If one or more asset classes do not perform well, you then have a cushion.
2. Sustainability and ESG Trends:
More and more investors are looking at ESG and sustainability impact as part of their investment strategy. Emerging trends initially included the direct ethical impact of companies’ relationships to sustainability and performance. As we move forward the complete adoption and continual evolution of ESG and sustainability will become the DNA of every company and investment solution. Sustainability extends out to the needs that we fulfill to our current generation. This also needs to simultaneously factor what are the impact to the future generations. A current example, fast fashion vs eco-friendly fashion. Which company would you choose to invest in?
3. Technological Advances:
Most companies today have incorporated some form or adaptation of Artificial Intelligence into their Investment businesses. These tools have revolutionised how clients can maximise portfolio optimisation example, capital growth or preservation, investment amount, term to retirement or savings goal, clients risk profile, tax rate, tax deductions used locally and offshore. AI could open global opportunities. Why would you need a human involved then? AI cannot replace emotional intelligence. When interacting with an accredited financial planner you may be able to establish a better and stronger connection. I believe online engagements are also of importance as It increases productivity and availability. But for at least one meeting try to engage in person and see what impact that has.
4. Political & Currency Factors:
If you have no global exposure to your investments, then here are some considerations. Determine which countries you would like to invest in. Look at the political stability of those countries, are there upcoming elections or potential war threats? What about currency fluctuations? How much of exposure to a specific currency do you have? An accredited institution would have teams of people analysing and projecting on these subject matters. But you also need to keep abreast, this could be utilising channels like the news, podcasts or subscribing to newsletters that help you get down to the granular.
5. Specialised and Bespoke Service providers
With so much of choice out there your choice of service provider becomes imperative. Do some research on the person with whom you would like to partner with. Are you are utilising a tied or mandated adviser to a company? This means your adviser may only present you offerings from one company. Or are you utilising an independent broker who can look at one or multiple platforms? Consider an adviser that is licensed, accredited and held accountable by a professional body like the Financial Planning Institute of Southern Africa. Find an adviser helps you connect with an individual who can assist you in structuring a comprehensive and tailor-made plan for you. Please visit the FPI Website for more information.
Neressa Appavoo, LLB, CFP®