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IFAST Insight- Learning from past Financial Crises

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Information about IFAST Insight- Learning from past Financial Crises
Finance

Published on March 9, 2009

Author: clariekwa

Source: slideshare.net

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"iFAST Insight interviewed a panel of financial advisers who experienced the Asian Financial Crisis, the Technology Bubble and the SARS Crisis, and got them to share the key lessons they learnt and their advice for investors in this current global financial crisis." From Feb - Jul 09 issue.
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financial cover planning story By allis on le e By iFAST Editorial Team LEARNING FROM PAST FINANCIAL CRISES iFAST INSIGHT interviewed a panel of financial advisers who experienced the Asian Financial Crisis, the Technology Bubble and the SARS Crisis, and got them to share the key lessons they learnt and their advice for investors in this current global financial crisis. P undits are calling the current recession the worst the global economy has experienced in 60 years, since the dark days of the Great Depression of 1929. The implosion of the subprime-induced cred- it crisis that first emanated from the US and Europe in the latter part of 2007 has brought about an economic storm that has swept across the globe. Equity markets worldwide have tanked, dispelling any talk of the “decoupling” between Asia and the US. The US, Europe and Japan are in a recession, while closer to home, Hong Kong and Singapore have lapsed into technical recessions. A quick look back at the recent economic crises brings to mind the Asian Financial Crisis (1997), the bursting of the Technology Bubble (2001) and the SARS Crisis (2003). History has taught us that the global economy has its boom and bust cycles; the global economy may be in shambles now, but the recovery will eventually happen. iFAST INSIGHT interviewed a panel of financial advisers who experienced the Asian Financial Crisis, the Technology Bubble and the SARS Crisis, and got them to share how their portfolios were impacted then, the mistakes they made along the way, what lessons they learnt, and their advice for investors in this current global financial crisis. 22 | 2009 February ~ July Article disclAimer: This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. No investment decision should be taken without first viewing a fund’s prospectus. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. As some of the authors/contributors may have a personal interest in some of the funds commented on, investors should seek the advice of professional advisers regarding the evaluation of any product, unit trust or other financial instruments, report, index, opinion or any other content contained herein, to ensure the investment instrument is suitable for them. In the event that investors choose not to seek advice from a professional adviser, they should consider whether the investment instrument is suitable for them. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. The value of units and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. iFAST Financial and/or its licensed financial advisers representatives may own or have positions in the funds of any of the asset management firms or fund houses mentioned or referred to in the article, or any unit trusts or Singapore Government Securities bonds related thereto, and may from time to time add or dispose of, or may be materially interested in any such unit trusts or Singapore Government Securities bonds.

THE ASIAN FINANCIAL CRISIS Sani Hamid Raymond Wee the issues that led to the demise of many corporations and pushed In July 1997, the Thai baht collapsed, sparking off the banking systems in Asia to the brink. Simply put, Asian economies Asian Financial Crisis (AFC) that lasted till February 1998. saw a period of sustained growth for a good part of the 1990s The effect of this crisis was felt throughout Asia. During which eventually went beyond what these economies could sustain that period, the MSCI Asia ex-Japan Index fell to a low of fundamentally, as evidenced by large current account deficits and 316 points from 576 points at the start of the period – a persistent inflationary pressures. 45% drop. It was a painful lesson. Like almost everyone else, the finan- While Singapore was not the worst hit, it too suffered cial market meltdown hit my portfolio severely. The only bright from the AFC. Rather than intervene in the market, the spot was that having only just been in the work force for about Singapore government allowed the Singapore stock mar- four years, my investment portfolio was not too large. However, ket to weather the volatility. The STI fell 43% from 1923 it was my trading portfolio which did the most damage as I suf- points at the start of the period, to a low of 1082 points. fered losses of a few thousand dollars related to contra trades. iFAST spoke with two veterans of the financial indus- And back then when my monthly salary was less than $4,000, it try who lived through the AFC. Raymond Wee is currently was painful. an Associate Director in Financial Alliance and leads a team of consultants. He started his career as a tied agent iFAST: What are some of the mistakes you (or other before becoming an independent financial adviser and has people you know of) made as a result of this crisis? more than 13 years of experience in the Financial Services RW: The financial services industry was not as developed back industry. Sani Hamid is the Director of Wealth Manage- then as it is now. We did not have the tools to create a diversified ment in Financial Alliance and has been with the company portfolio for our clients, as the number of funds available to us as for more than 15 years. They shared their experience and tied agents were limited. We did not have the opportunity to work insights in the following interview. with a unit trust platform with over 300 funds. Hence most of our iFAST: What was this crisis about? How was clients’ investments were pooled into either an Asian equity fund your portfolio impacted then? or a global equity fund from the same fund manager. As we did RAymond Wee (RW): The AFC led to much gloom not practice portfolio creation, we pretty much did not split our clients’ investments into equity-bond mix. and doom in the general population. At that time in 1998, We had one other global bond fund and a Singapore fund, most people had the same end-of-the-world (or rather which I shunned due to their slow growth prior to the crisis com- end-of-the-market) feeling as we do today. In the financial pared with Asian and global equities. The years prior to 1998 services industry, we were also not spared that sentiment. were like the years from 2004 to 2007 where the market could There was much talk that the dismal economy would drag do no wrong. Everything an investor threw his money at made on for years. With that, the heyday of the financial serv- profits. Anything that was seen as slow, stable growth was not at- ices industry, which had seen good growth since the early tractive. 1980s, was over at best, or it would be wiped out at worst. When the crisis struck, our clients’ investments did more poor- Some of my colleagues left the industry to pursue other ly than now, as we did not put in bonds to cushion losses, nor things. My clients who invested in my company’s single were we able to access better-performing fund managers. When I premium investment-linked products (ILP) funds made average losses of 40%-50% on their principal amount. made the switch to join an IFA in 2004 and had the opportunity to make the comparison of the Asian equity funds, I realised that in the period from 1997 to 2004, the top Asian equity funds were SAni HAmid (SH): The AFC was about - like many performing at an excess of 20% per annum year-on-year (yoy), other crises – excess. Excessive foreign currency borrow- whereas the one my clients invested in from my tied company only ings and reckless lending by the banking system, especially did 9% p.a. yoy! ➝ to non-productive sectors of the economy, are just two of 23 Important: See Disclaimer on Page 6 iFAST INSIGHT | Article disclAimer: This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. No investment decision should be taken without first viewing a fund’s prospectus. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. As some of the authors/contributors may have a personal interest in some of the funds commented on, investors should seek the advice of professional advisers regarding the evaluation of any product, unit trust or other financial instruments, report, index, opinion or any other content contained herein, to ensure the investment instrument is suitable for them. In the event that investors choose not to seek advice from a professional adviser, they should consider whether the investment instrument is suitable for them. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. The value of units and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. iFAST Financial and/or its licensed financial advisers representatives may own or have positions in the funds of any of the asset management firms or fund houses mentioned or referred to in the article, or any unit trusts or Singapore Government Securities bonds related thereto, and may from time to time add or dispose of, or may be materially interested in any such unit trusts or Singapore Government Securities bonds.

cover story By iFasT ediT o r ia l T e a m iFAST: What are your tips on how investors should ➝ A grave mistake committed by many in the financial serv- face 2009? ices industry was to quit. The industry has continued to see growth and if we engage our clients in the proper way, we SH: We always like to believe “it’s different this time”. We will still be relevant to our clients and can add value to their thought we were different from Thailand when the baht financial planning process. tanked in 1997, we thought ridiculous valuations for internet stocks were justifiable in 2000 and in 2007, again we thought SH: I bought a stock called Uniphoenix. The price had the world had decoupled from this crisis that originated from dropped substantially and on the charts it looked poised for a the US. Similarly, it will not be different - the market will re- rebound. What the chart didn’t tell me was that it was going cover. We believe markets will bottom in 2009, potentially even to get suspended. It has remained suspended until today, for in the first quarter and in the worst case, in the third quarter. It a good 10 years. will not be different as markets have normally bottomed in the same year growth hits a trough. And we expect that in 2009. iFAST: What did you learn from this crisis? As such, investors who ride out this downturn will be rewarded RW: Diversification can help cushion losses, though it cannot for understanding that “it’s never different”. buck the trend. With equities losing up to 60% of their value WHEN FACED since November 2007, most bond funds lost only 5%-8% in WITH A CRISIS... the same period. Ultimately, the market will recover, given time. As men- tioned, at that time in 1998, we had the same end-of-the- do: world feeling as we do today. My clients, who invested in my company’s single premium ILPs, were sitting on losses of • Keep calm. 40%-50% of principal and there was pressure from them to • do appropriate switching. sell. However, even those who invested in the market highs of • Get back into the market when you see good value and 1997, made profits of an average of 5% per annum, when not allow the scars from losses to scare you away. they held their investments to 2004/05. This is a reasonable • Be patient. I know a lot of people who keep averaging return given the limited tools available in terms of fund avail- down just because stocks have fallen say 10-20% from their original purchase level. Instead, wait for signs that ability and diversification into different instruments. the market has bottomed. For example, I believe the SH: I learnt a few key lessons in that crisis. The first and market has moved into a sideways base building consolidation phase. I believe this is the time to pick foremost is not to over-leverage. In other words, “Don’t play up stocks for those with a minimum time horizon of 3 contra if you cannot manage the leverage”. The crisis also years or more. taught me how markets could turn suddenly and that no mat- • Protect your profits. Increasingly, as crisis become ter how many times you hear the words “we are different”, as more frequent and severe, capital preservation will be many countries tried to differentiate themselves from Thai- a key feature in any portfolio. In fact, we are looking land after the baht’s collapse, financial markets are closely to introduce features into our clients’ portfolios which intertwined. will help guard against sharp declines like that faced iFAST: How has this crisis helped you to plan in 2008. your clients’ portfolios better in 2008? RW: It has given me conviction that markets, no matter how don’t: disastrous, will recover. This has enabled me to reassure my • Sell off at a whim. clients who have made losses, to hold on to their investment • Believe every piece of news you read. Markets have objectives that they started off with and stay invested for the been known to be talked-down by the pessimism of next 5-10 years. economists. • Link the economy with the market. Markets may recover SH: Based on the (painful) lessons I learnt in 1997, I exited before the economy does. the equity markets in Q4 2006 as I felt very uncomfortable • Be overly sentimental with losers. the question with how markets had rallied unabated, reminiscent of pre- investors should be asking themselves is whether the 1997. With hindsight, it was a full 12 months too early and investment they are holding will be able to recover I had to contend with the fact that markets rose much more when the market does. the worst case would be to during that period. But I feel vindicated now as prices have hold onto a stock or unit trust which will underper- collapsed way beyond my exit levels. Now I have in fact gone form the market when a recovery takes place. back into the market via dollar cost averaging because my capital is fortunately intact. Source: Financial alliance Pte ltd 24 | February ~ July 2009 Article disclAimer: This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. No investment decision should be taken without first viewing a fund’s prospectus. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. As some of the authors/contributors may have a personal interest in some of the funds commented on, investors should seek the advice of professional advisers regarding the evaluation of any product, unit trust or other financial instruments, report, index, opinion or any other content contained herein, to ensure the investment instrument is suitable for them. In the event that investors choose not to seek advice from a professional adviser, they should consider whether the investment instrument is suitable for them. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. The value of units and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. iFAST Financial and/or its licensed financial advisers representatives may own or have positions in the funds of any of the asset management firms or fund houses mentioned or referred to in the article, or any unit trusts or Singapore Government Securities bonds related thereto, and may from time to time add or dispose of, or may be materially interested in any such unit trusts or Singapore Government Securities bonds.

THE TECHNOLOGY BUBBLE Victor Wu Bob Mock ren Buffet – was the order of the day. Millions of dollars were In the mid-1990s to the early 2000s (right before the bursting thrown to corporations with no clear business plan, to grow to of the technology bubble), technology and technology-relat- the likes of Microsoft in an unrealistic time frame. 18 months ed entities and stocks were all the rage. Dot-com companies became the golden standard for VC investment time horizon.2 sprung up at a pace previously unseen; almost every sizable To be fair, some company founders did strike it rich by selling dot-com entity was regarded to have the potential to be the their businesses at the early stages of the bubble. But majority next big thing in the technology space. did not and all these selective successful testimonies only served Bob Mock, Senior Consultant with Alpha Financial Ad- to create a larger false impression of the market. visers Private Limited, says, “At the peak of the Nasdaq index Then on 10 March 2000, millions of dreams all over the of over 5,000 points, the price earnings (PE) ratio went to an world were shattered when the NASDAQ fell 33% in 1 month. astronomical high of 62X. The bubble started to deflate when And there was more to come, over the next 2.5 years, the NAS- leading technology companies such as Cisco and Oracle failed DAQ lost about 78% of its value (closer to our heart, the STI to meet analysts’ earnings expectations.” He added that the lost about 50% during this period)3. When the dust settled, crisis was perpetuated by investors’ greed for short-term gains US$5 trillion of paper value had evaporated from the tech- and thirst for high returns which led to concentrated bets on laden index4. technology shares, disregarding the golden rule of traditional asset class allocation based on investors’ risk profile and the iFAST: What are some of the mistakes you (or need for portfolio diversification. other people you know of) made as a result of In an interview with the duo, they tell us more about the this crisis? key lessons they learnt from this crisis. Victor Wu joined Alpha VW: A Gallup poll put out by Paine Weber was conducted on in 2004 and has 5 years of industry experience. Bob Mock, a group of investors in December 1999. In it, Warren Buffett a senior consultant with Alpha, has more than 10 years of was criticised by many for failing to take advantage of the phe- working experience in the financial industry. nomenonal rise in the IT stocks. Many investors were making iFAST: What was this crisis about? How was your extraordinary returns and had expected a 19% annualised re- turns in the next decade5. When the party was over, they were portfolio impacted then? the ones who would kill to have the 12% annualised return VicToR Wu (VW): At the height of the investment fren- in Berkshire Hathaway’s holding since 1965 to 2006. Buffett zy, people were pouring their personal assets into the market, clearly knows something that we, mere mortals, do not. When even quitting their jobs to be full-time day traders. This was caught up in the euphoric period of the mid-90s, people were also a period marked by rapid IPOs. There were 457 IPOs in throwing the fundamentals of the companies out of the win- 1999 (a rate of 1.25 IPO per day), most of which were tech- dow. But Warren Buffett has repeatedly shown us that he is not nology and internet related. 117 of them doubled in price on the first day of trading.1 A Venture Capitalist (VC) was once in the business of buying over-priced assets. He was constantly seeking out undervalued companies which promised long term described as someone having deep pockets with short arms. profits growth. In his 2000 acquisitions, there was not a single Even then, when an investment was pitched with a “.com” technology company in it, but a bunch of ‘boring’ companies, at the end, the VCs would jump right at it. Irrational exuber- by any standard applied. ance – in the words of Alan Greenspan and the great War- Another lesson which we observed from the technology sec- tor meltdown was the lack of diversification when investing. People were holding majority, if not exclusively, technology and internet stocks in their so-called portfolio. In our excitement, we forgot that there was a need to diversify across asset classes, ➝ 25 Important: See Disclaimer on Page 6 iFAST INSIGHT | Article disclAimer: This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. No investment decision should be taken without first viewing a fund’s prospectus. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. As some of the authors/contributors may have a personal interest in some of the funds commented on, investors should seek the advice of professional advisers regarding the evaluation of any product, unit trust or other financial instruments, report, index, opinion or any other content contained herein, to ensure the investment instrument is suitable for them. In the event that investors choose not to seek advice from a professional adviser, they should consider whether the investment instrument is suitable for them. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. The value of units and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. iFAST Financial and/or its licensed financial advisers representatives may own or have positions in the funds of any of the asset management firms or fund houses mentioned or referred to in the article, or any unit trusts or Singapore Government Securities bonds related thereto, and may from time to time add or dispose of, or may be materially interested in any such unit trusts or Singapore Government Securities bonds.

cover story By iFasT ediT o r ia l T e a m Greed as well as fear is bad for investors’ portfolios when regions and sectors. While some experts may frown upon ➝ one tends to chase after hot stocks when the shares are rag- the concept of diversification, it would be suitable for people ing, forgetting to buy stocks with strong fundamentals and low in the Main Street. valuations. Conversely, investors are likely to sell out at market BoB mock (Bm): As usual, mistakes were made by both bottoms due to fear that their shares may go lower the next day with relentless bad news from reading the newspapers. retail and institutional investors. The main mistake committed by both type of investors was ignoring the basic rule of invest- iFAST: How has this crisis helped you to plan ing, which is to invest based on sound business fundamentals. your clients’ portfolios better in 2008? Institutional investors, such as analysts and fund managers, VW: The IT bubble as well as other market corrections that were talking up the technology sector as the only place to be came along the way had certainly reminded us how important in, while putting down “brick and mortar” defensive sectors it is to invest in the long-term value of quality companies and as sunset investments. not the ‘flavour-of-the-season’. We have just been reminded Retail investors, meanwhile, failed to reduce their in- how frequently bubbles form, with the recent commodities vestment risks by placing most of the money into technol- bubble. In early 2008, investors were demanding to invest in ogy shares or funds. This mistake, turned out to be a pain- the commodity sector. However, we felt that the over high valu- ful lesson for them as they saw their wealth decimated when ation was just not justifiable to invest in and thus commodity the NASDAQ crashed, and they were not buffered by other products were not included in the portfolio. While the question asset classes such as bonds, real estate and commodities in on whether the commodity bubble popped depends on who their portfolios. Another mistake made by some investors was you ask, clearly the fever has subsided just as abruptly. borrowing to invest in the bull market, failing to cut losses When you have a game plan, stick to it no matter how fast to salvage their portfolios, and selling at much lower levels tempting outside market noises may seem. Revisit your invest- after several rounds of margin top-ups. ment objectives and time horizon to gain strength when your iFAST: What did you learn from this crisis? confidence seems to be wavering. This, coupled with periodic VW: To further add salt to their wounds, investors burnt by rebalancing of the diversified portfolio and a level-headed mind, would always do the trick. Identifying how emotions are the market tended to over-react to market volatilities rather affecting us is the key to preventing more mistakes from being than respond in a rational manner. Just as greed rules our made especially during the down times. Somewhere between emotions when the going seems smooth, fear paralyses our greed and fear is that elusive sweet spot which we all can be at mind when all seems lost. Investors pulled out of falling stock peace with. markets, completely disregarding market fundamentals. Sud- denly, all long-term investment planning becomes short term Bm: Indeed, the lesson I learnt from the technology sector when faced with the fear of sustaining further losses. crash has proven to be invaluable to my practice. I have made It is painful enough to see a large portion of your investment it a point to construct diversified portfolios for most of my cli- portfolio evaporate in a fast and furious pace, but the thought ents based on their risk profiles and their personal preferences of the possibility that the lost wealth might never return is just on certain asset classes or sectors. The portfolios constructed too much for some to bear. It is both personal and painful to have a long-term perspective but short term tactical portfolio acknowledge that expensive mistakes have been made. How- adjustments are used to enhance the returns or reduce risks in ever, there is nothing shameful in cutting loss, rebalancing the view of the constant changing economic environment. portfolio and moving on again, instead of permanently staying I do not encourage the use of leverage in direct stock mar- on the sideline, missing out of future market rallies after each ket investments or unit trusts as the losses will be magnified crisis. There will never be a single event or a clear defining when market crashes just as the gains will be multiplied in a bull moment to indicate the bottoming of any financial crisis. run. However, the current global credit crisis has added a new Bm: After the technology bubble burst, investors learnt that dimension to portfolio investment risk as this is the first truly global contagion triggered by the US real estate bubble. As a valuation does matter in long term investing and one should result of innovative financial engineering, some complicated invest in companies that deliver positive cashflows and pay derivative products are packaged out of subprime bank loans good dividends. Technology companies may produce state of that are then sold to most developed and emerging banks that the art programs or games but their business viabilities will be seek higher yields. reduced if they do not bring in profits to sustain (their busi- We have learnt that even widely diversified portfolios may nesses) for the long term. suffer big losses in a short time frame and the current crisis We also learnt not to put all eggs in one basket as asset class may drag on for longer than expected. Investors are likely allocation in portfolio does reduce investment risks through to accept lower returns or even negative returns in the near diversification. Investors should not confuse long-term invest- ➝ future if the credit market does not recover fast enough to allow ment with short-term trading. 26 | February ~ July 2009 Article disclAimer: This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. No investment decision should be taken without first viewing a fund’s prospectus. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. As some of the authors/contributors may have a personal interest in some of the funds commented on, investors should seek the advice of professional advisers regarding the evaluation of any product, unit trust or other financial instruments, report, index, opinion or any other content contained herein, to ensure the investment instrument is suitable for them. In the event that investors choose not to seek advice from a professional adviser, they should consider whether the investment instrument is suitable for them. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. The value of units and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. iFAST Financial and/or its licensed financial advisers representatives may own or have positions in the funds of any of the asset management firms or fund houses mentioned or referred to in the article, or any unit trusts or Singapore Government Securities bonds related thereto, and may from time to time add or dispose of, or may be materially interested in any such unit trusts or Singapore Government Securities bonds.

AD 27 Important: See Disclaimer on Page 6 iFAST INSIGHT | Article disclAimer: This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. No investment decision should be taken without first viewing a fund’s prospectus. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. As some of the authors/contributors may have a personal interest in some of the funds commented on, investors should seek the advice of professional advisers regarding the evaluation of any product, unit trust or other financial instruments, report, index, opinion or any other content contained herein, to ensure the investment instrument is suitable for them. In the event that investors choose not to seek advice from a professional adviser, they should consider whether the investment instrument is suitable for them. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. The value of units and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. iFAST Financial and/or its licensed financial advisers representatives may own or have positions in the funds of any of the asset management firms or fund houses mentioned or referred to in the article, or any unit trusts or Singapore Government Securities bonds related thereto, and may from time to time add or dispose of, or may be materially interested in any such unit trusts or Singapore Government Securities bonds.

cover story By iFasT ediT o r ia l T e a m ➝ normal lending and borrowing between banks and companies WHEN FACED to resume. As this (current) crisis is coined as a “once in a century WITH A CRISIS... crisis” by former Federal Reserve chairman Alan Greenspan, investors who have fully invested diversified long term port- do: folios, constructed based on sound fundamentals, must not • Stay calm and focus on the long term fundamentals of waver and should look to invest further with spare cash, with the companies or unit trusts invested. an eye on the future recovery in the global stock markets. • Monitor and rebalance your portfolio to weed out iFAST: What are your tips to investors on how highly leveraged companies to lower risk. investors should face 2009? • only look to add new positions in different tranches when stock market stabilises. VW: In summary: • Invest in dividend paying stocks or unit trusts as it helps - Set a realistic time horizon for all investment ventures to reduce overall losses in your portfolio. e.g. 5 years or more; revisit them from time to time • Engage a professional financial consultant to manage/ - Invest in businesses that you understand monitor your portfolio to minimise emotional - Diversify across asset classes, regions and sectors attachment to managing it on your own. - Let the law of Dollar Cost Averaging work for you, even more so during the present financial crisis - Accept that volatility is part of investment and that we don’t: should be more aware of our emotions when making • Panic sell out of your stocks or unit trusts on big down investment decisions days when the market crashes more than 5%.

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