Risk should be THE key focus, not returns

Attended a Business Conference yesterday. I summarize the key points for the investment outlook presented by Sani Hamid (Director, Wealth Management (Economy and Market Strategy) of Financial Alliance Pte Ltd).

  • Gold’s tumble is not a concern. Focus remains on gold as insurance, not a commodity nor currency.
  • Gold is the ultimate ‘anti-bubble’ amid falling bond yields.
  • There are bigger concerns:
    • Increasingly a very worrisome “dysfunctional” environment:
      – Dysfunctional Monetary Policy
      – Dysfunctional Economies
      – Dysfunctional Fiscal Policy
      – Dysfunctional Markets
  • Not a normal environment. Risk should be THE key focus, not returns.
  • Dysfunctional Economies
    • Despite low interest rates and abundant liquidity, economies remain mired in slow & low growth.
    • Current debt levels now sit at a record 225 percent of world gross domestic product, the IMF said in its semi-annual Fiscal Monitor.
    • Financial crises tend to be associated with excessive private debt in both advanced and emerging economies.
    • If companies postpone paying off debt,they could become “very sensitive to shocks, increasing the risk of an abrupt deleveraging process.
  • Dysfunctional Fiscal Policy
  • debt-gdpfiscal-policyDysfunctional Markets
    • Equity markets continue to hold up despite weak profitability and revenue growth.
    • While bond markets burst at their seems despite being a crowded trade.
  • Investment Strategy:
    • Not about timing the market but rather smoothing volatility
      • Our defensive strategy should not be confused with timing the market. Done to lower the market volatility.
      • Because clients are only human –inability to take sharp swings.

My key take away for current market condition:

  • Defensive
  • Manage Risk by portfolio diversification
  • Focus on out performers
  • Portfolio re-balancing to manage the volatility

Join the coming workshop on “How to construct your retirement investment portfolio without losing sleep?”

See other event here. https://mystocksinvesting.com/events/




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