M O N T H LY U P D A T E S A N D A N A L Y S I S F R O M T H E V M W E A L T H T E A M
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Things We Learned in
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New Year, New You: 5 Investment Resolutions to consider for 2021
Âť Ladies in Wealth Âť Market Update & Economic Overview - December 2020
5 Things We Learned in 2020
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Ladies in Wealth
New Year, New You: 5 Investment Resolutions to consider for 2021
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Market Update and Economic Overview
Davie Martin, MBA MEET THE TEAM
Manager - Asset Management VM Wealth Management
Davie Martin is an alumni of Kingston College who joined the VM Wealth team in May 2019. In his role as Manager for Asset Management, he is responsible for optimizing the risk adjusted returns on the various investment portfolios to maximize customer value. Davie has over 18 years of experience in the financial industry, with his most recent position before joining VM Wealth being Manager – Trading at NCB Capital Markets Limited. Davie is an avid sports fan and a longsuffering Arsenal supporter. He also enjoys going to the beach and spending time with his family. Davie holds a Master of Business Administration with a focus on Banking on Finance from the Mona School of Business and a BSc in Management Studies and Accounting (UWI).
5 Things We
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From 2020 020 was, if nothing else, a powerful learning experience. Personally, many of us had to deal with loss, job changes and the stress of the unknown and unexpected. Financially, we saw historic shifts in the global markets that were a stark reminder of the need for planning, patience and protection. Here are some of the takeaways we believe are important for navigating the year ahead:
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THINGS CAN CHANGE IN AN INSTANT – Last year, when COVID-19 creeped up on us, the stock market took a downturn and became a global concern. Many investors panicked and acted without thorough analysis. Although the market has settled somewhat, we should continue to expect the unexpected. COVID-19 will surely be with us over the course of this year and the same rules apply: Think smart and learn from the experiences of last year. THINK LONG TERM – When it comes to investing, a long-term approach is usually best. 2020 was a year like no other and it reminded us about the pitfalls panic selling. Daily checking of your portfolio might simply cause you anxiety. Instead, think long-term when building your investment portfolio. Schedule regular reviews where you can make adjustments based on changing circumstances and outlook. Remain vigilant with more than one plan of action in the event of unexpected shocks. And heed the advice of trusted experts.
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STAY DIVERSIFIED – Having a diverse mix of investments is a prudent risk management strategy. Given the possibility of volatility in the months ahead, a diversified portfolio will reduce your loss potential due to market shifts. KEEP FUNDING YOUR EMERGENCY PORTFOLIO – Your emergency portfolio is for exactly that – emergencies. An emergency can happen at any time and your ability to ride out market lows or changes in your income will be boosted by having a rainy-day nest egg. You want to ensure that, in the event of a shock, you’re able to continue to live as comfortably as possible with peace of mind. Remember too that, due to inflation, the ideal size of your emergency portfolio is a moving target. So, as long as you’re able, continue to fund your emergency portfolio as well as your other savings and investment buckets.
BE KIND TO YOURSELF – If you struggled last year and feel like you still are, it’s ok. You don’t have to have it all figured out. Let go of the myth of certainty. It’s not too late for you to start where you are or to pick yourself up. You also don’t have to do it all at once, so commit to making one or two small changes at a time. Let those take hold and become routine before moving on to another change. Eventually you’ll look back and be amazed at all you’ve accomplished, in spite of the hurdles you’ve had to overcome. The past can be a great teacher if we let it. Do a mental review of last year, analyse how events and changing circumstances affected you and see what lessons you can take into the months ahead. With the right approach, those lessons can make all the difference.
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New Year, NEW YOU
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5 Investment Resolutions to consider for the new year
he year is still new, so there’s still time to make your resolutions. Besides, it’s never to late for financial resolutions. Set an investment goal - When it comes to investing, the best place to start is with a goal -- or a few. Knowing what you want, will help provide you with motivation to make it happen. Once you’ve figured out what you want, you can make plans to achieve it. Goals will differ from person to person and have different time horizons. Just remember to make them achievable. Break them into smaller goals if necessary.
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1. Get acquainted with your Wealth Advisor - At VM Wealth, you’re assigned a Wealth Advisor once you sign up, free of cost. To find out who your wealth advisor is, check the top righthand corner of your statement. Their name and contact details will be there. Get to know them. 2. Sit down with your Wealth Advisor to plan towards your goals. You should also check your progress throughout the year to see whether you are on target or if you need to tweak things. Your investments should match your risk tolerance and tie into your goals. With their expertise, your Wealth Advisor is the best person to guide you on your investment journey. 3. Eliminate unnecessary expenses – Do you know what you spend on in any given month? Do you really know where all your hard-earned money is going? Many people engage in compulsive or unconscious spending that can sabotage their savings and investment efforts. Take a look at your monthly expenses. A good way to see what you’re spending is to write down all your expenses for a month, theN compare it with your monthly budget. Are they in sync? Tracking your spending might be a revelation for you, but you’ll be setting up yourself for long-term financial success. 4. Expand your income streams – One study found that millionaires have an average of nine income streams. Diversification of your income streams can provide a cushion during turbulent times. Do you have assets you can convert into income earners? Maybe you own a property that isn’t meeting its income earning potential. Or you might be
accustomed to spending your dividend and interest cheques instead of reinvesting those funds. Have a look at your assets, including your investment portfolio and see how you can unlock even more earning potential. It’s time for your money to work for you. Consider our new Unit Trust portfolio, the VM Wealth Goal Maximizer. It gives you the option to invest in bonds, stocks, real estate & equity all in one portfolio. This portfolio is managed by our Asset Manager, who has the flexibility to adjust allocations based on what’s happening in the markets to optimize returns for members invested in the portfolio. 5. Invest in yourself – One way to expand your income streams is to develop and expand your skill set. This is one of the easiest ways to build your value as an employee or to make yourself or your business more attractive to clients and potential clients. Investing in yourself can take many forms, from taking a course to turn a talent into a money earner to investing in software to help you better manage business processes. It’s an investment you will never regret. “Investing in yourself is the best investment you will ever make. It will not only improve your life, it will improve the lives of all those around you.” – Robin Sharma These suggestions are just a start, but you can come up with financial resolutions of your own. Whatever you settle on, it’s a good idea to write them down and keep them somewhere visible. Better yet, get an accountability partner – someone you can share your resolutions with, who will help you stick to them. You can do the same for them. At the end of the year do a review and do it all again. Good luck!
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Check out our latest stock picks
Ladies in Wealth Welcoming Premium Wealth
Investment professionals at Victoria Mutual Wealth Management are celebrating the opening of the new Premium Wealth Management services centre, located on Knutsford Boulevard. The entity has been launched to provide expert financial management services tailored to the needs of the organisation’s premium clients.
Enjoying the moment are (l-r) Sales Manager Tamara Waul Douglas, Wealth Advisor Tudie Nanco, and Premium Wealth Officer Jodie-Ann Bennett.
Wealth Knows
Diversification Diversification is the process of allocating capital in a way that balances risk and reward. A diversified portfolio contains a mix of asset types with the aim of limiting the risk exposure of any single asset. The rationale here is that a portfolio constructed of different kinds of assets should, on average, yield higher long-term returns while lowering the overall risk. Portfolios can be diversified by such characteristics as asset class, investment vehicle, currency or geography. 8
Market Update and Economic Overiew December 2020
Fixed Income What was a volatile year ended on a mild tone. The yield on the benchmark US 10-year Treasury closed the trading year just over 1 percentage point lower at 0.91%, having opened at 1.92% in January 2020. With the release of COVID-19 vaccines in December, first from Pfizer/BioNtech and then from Moderna, pockets of optimism emerged in the markets and investors ventured into riskier assets. Read the full report
Money Market The Treasury Bills auction for December saw yields on the 91-day and 182day tenors drop to 0.76741% and 0.86031% respectively, marginal declines for the month, but declines of 54.91 and 73.74 bps for the year. There was no 273-day auction in December, but the yield of 1.03723% in November was 69.15 bps lower than December 2019. The prevailing rates are the lowest in Jamaica’s history. Read the full report
Equities 2020 saw a reversal of the Jamaica Stock Exchange’s 5-year bull run since 2015. The market had started to turn downwards from last quarter of 2019, but the COVID-19 shock sent the market plummeting by 25.63% in the first quarter of 2020. Although it stabilized somewhat after the initial shock, it did not recover, and ended the year down 22.42% for the Main Market and 25.43% for the Junior Market. Read the full report
Foreign Exchange The BOJ’s Weighted Average Selling Rate (WASR) closed December at $142.65, recording a 2.90% appreciation in value versus the November 30 close of $146.78 and a 7.07% depreciation from the $132.57 2019 close. There were no BOJ interventions in December. Read the full report 9
Achieve your Financial Goal
Exceptional Investing is the process of committing resources in a strategic way to accomplish a specific objective.
Benefits 1. Starting amount of J$10,000 2. Diversified portfolio invested in bonds, stocks, real estate, equity
3. High liquidity, giving you easy access to your money
4. An experienced team of Professional Fund Managers.
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