NFB Proficio Issue 59

Page 1

NFB FINANCIAL UPDATE Volume59 Dec 2011

FROM THE CEO’s DESK

N

ovember, no kidding! A remarkable year with extraordinary volatility, risks and a few rewards is almost a thing of the past. A few days back it was 11-1111. What's special about this? Never again this century will the calendar show this duplication in numbers! As humans we are full of quirks, habits and superstitions. The Chinese hold a special place for the number 8. Thank heavens for this as the government will do just about anything to ensure their growth rate is greater than or equal to their national lucky number. A while back I was treated to a lecture by a prominent China/India expert. He suggested that China's position as the leading global economy would be established by the middle of this century. I think, given developments of late, he was correct except his forecast is true, in certain respects, right now! Finding safe ways to ensure your needs are met is the basic stuff of investing. Similarly, ensuring your needs are reasonable and you aren't trying to tap blood from the proverbial stone is also relevant. Not expecting massive capital gains from the price of assets is not only a safer bet, but is also prudent in these times of greater uncertainty. A theme we have adopted at NFB is seeking earnings in whatever form these take. Unsafe ways proliferate in these times. The Reserve Bank and the Regulator are currently dealing with a massive case of fraud, misinformation and theft. Sharemax will be mainstream news in the next while and it might even eclipse the Masterbond scandal which rocked South Africa in the early 90's. Advisors, some who earned a 10% commission, have placed billions of rands of unsuspecting or, in some cases, perhaps greedy investors' funds into suspect property backed "investments". These convoluted structures are bound to expire without investors recovering their cash. Loads of blaming and recrimination, followed by legal fees, liquidators' fees, disbursements and so forth will further dilute the spoils, leaving thousands of investors penniless!

Changing tack, NFB has a range of portfolios, invested in leading funds, direct equities, bonds and preference shares designed to meet investors' needs. Your portfolios probably contain these and we continue to refine the selection, the process and the ongoing effort to lessen the cost of money management. At the beginning of this editorial I mentioned volatility. Seldom have we seen such wild gyrations in the various asset classes. The effect these crazy swings have on individuals is significant. We would urge you to carefully consider reacting to these movements. Trading can cost money and can trigger tax events. And, as is often the case, this is done just when the market changes trend, potentially causing major doubt, over-reaction and a less than optimal outcome. I believe if the allocation of portfolios is appropriate at a macro level, staying the game is most often the best strategy. At NFB we micro manage the portfolios and effect changes to suit the macro economics as they unfold. This can also, if done in a tax efficient product, minimize the tax effect for the investor. I would, in approaching the year end, suggest you engage with your advisor to ensure your portfolio is well balanced and also to discuss products and other innovations which are available or in development. With regard to rewards, gold remains strong. My problem with this metal is that it does not pay a dividend. This aside, for those who believe in gold, you could access it through an Exchange Traded Fund. Discuss this with your advisor, but remember, it reminds me of Icarus and Deadilus! It flies high, but can crash alarmingly when it loses its glow. It remains for me to thank our clients, business introducers, staff and institutional friends for your support and input during 2011. I wish everyone well over the festive season and look forward to a Malema free 2012... 12-12-12 is just around the corner! Mike Estment, BA CFP® CEO, NFB Financial Services Group

IN THIS ISSUE From the CEO’s desk The resurgence of the Retirement Annuity Facts and fiction about Risk Cover

financial services group


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.
NFB Proficio Issue 59 by NFB - Issuu