Over the years of researching asset managers in South Africa and globally, there have been many cases of successful asset managers who have seemingly fallen apart, lost assets and faced uncertain futures. This deterioration often happens quickly and without warning. We spend significant time analysing whether there is a common thread running between these firms that face collapse. Is there any specific factor or common denominator that we could focus on which would allow us to identify those asset managers in advance and avoid them?
Posts Tagged ‘investment’
To build a sound investment plan for the future, the first thing you need to do is consult a financial planner who will conduct an analysis of your current situation with the view to connecting your financial status with needs and goals. From this starting point, a strategy can be set in place comprising steps to a well-considered investment regime that will ultimately build the kind of wealth you dream of and hope for. It’s a thorough investigation of your financial affairs. A financial needs analysis is therefore essential to preparing for, and accessing, future financial needs.
There is no one plan that suits everyone, which is precisely why the individual analysis must be done. It’s a process that will be affected by five major factors: current wealth; income; health; dependents; and goals.
“Everything we get, outside of the free gifts of nature, must in some way be paid for.” ~ Henry Hazelitt ‘One Lesson: The Shortest and Surest Way to Understand Basic Economics’
Debt is a complex issue – and depending on how it is controlled – can have either positive or negative effects. In its simplest form, debt could well look like this: if you owe more money than you earn, you are bankrupt, actually poor. Yet the world seems determined to ignore this reality and continues to spend beyond means and borrow beyond ability to repay. The effect is the same whether you’re an individual, a company, or a country.
Worldwide millennials are estimated to be worth over 2 trillion dollars. Secondly, they are entering their prime earning years. And thirdly, they stand to inherit some of the largest investment portfolios ever accumulated by the previous baby boomer generation. However, their attitudes, sentiments, ambitions are different, even disruptive, less trustful and definitely more discerning than their parents.
Also known as Gen Y, they were born after 1980 and reached adulthood at the turn of the century, currently anywhere between 18 to 36 years of age. So what’s so special about them? Well, quite a number of things. When it comes to finance, millennials are not their parents. They think differently and their expectations are entirely different. They’re tech-savvy and independent but also wary of financial markets and complicated jargon. Most importantly, this is the wealthiest young generation in history.
“One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.” ~ William Feather
Recently, a religious organisation discovered their money had been invested in an oil and gas exploration company. Not wishing to support the mining of fossil fuels, they sold their shares in the company concerned. When you sell, of course, someone else is buying – so while the transaction did not necessarily harm the company directly, the organisation hopefully had the satisfaction of placing their money with ventures they felt offered a greater sense of altruism and good influence.
But more intriguing than anything they felt or did, is the fact that they knew exactly where their investment had gone. And most people, unless they’re well-versed independent investors who do their own selecting, have no idea what happens to their money once it is swallowed by a ‘fund’. This includes retirement funding, policies, money markets and all financial investing options across a wide spectrum of choices. In fact, it’s often a question they never ask. They simply expect the value of their investment to naturally, hopefully, grow.