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Fourth Quarter 2022 – In Touch

Jurgens Team — Thu, 15 Dec 2022 09:43:41 +0000

Investment news for you

Well done to Lemeryn, Simone, Jethro, Jordan and Miguel for furthering their studies and passing their exams!

A message from Mark Jurgens

2022 will go down as a challenging year for South Africans and global investors. High inflation, spiking interest rates, an ongoing war and load shedding are amongst the difficulties being negotiated. However, the benefits of a strong Reserve Bank and surplus taxes being generated from local resources, as well as a resilient South African culture, have softened the blow.

In my fourth and final article relating to Behavioural Finance, I would like to discuss Familiarity Bias. Despite obvious gains from diversification, studies have shown that investors often prefer familiar investments from their own country, region, state or company. Investors prefer domestic investments over international investments. Beyond a geographic familiarity bias, investors also exhibit strong preferences for investing in their employer’s stock. I have met a number of people who have been overconfident with the long-term investment prospects within their company of employment. This can result in not only the risk of poor investment returns, but also potential loss in compensation. Dimension Data and Steinhoff are two examples where employees on all levels lost significant amounts of money when share prices plummeted.

An implication of familiarity bias is when investors hold suboptimal portfolios and suffer from under diversification. Although the best practice is for portfolios to hold at least 50+ stocks, the average investor in this instance, only holds three or four. Focussing on their employer, large capitalisation, and domestic stocks; work against global diversification. To overcome this bias, investors need to cast a wider net.

In my experience, unit trust managers add tremendous value to clients who previously managed their own portfolios based on their limited choices of familiarity. With the amount of unit trusts available today, global diversification is far more attainable than ever before.

One must try to constantly remain aware of behavioural finance influencers and realise the value of independent advice.

I want to take this opportunity of thanking you for your support during a tough year. Volatility creates opportunities, although not always easily identified. Stay well and regards I also want to thank my colleagues at Jurgens Finance for their hard work and commitment. Wishing you and your families safe travels and a happy festive season.

Stay well and regards.

Mark Jurgens

'Let it go, let it go….' from Alan Botha

Human nature allows us to get stuck because we focus on things that are outside of our control. The more we do this, the more disempowered we are, and the more frustrated or disappointed or angry or anxious we feel.

In contrast, the more we focus on what is in our control, the more empowered we are, we can do something useful. This year, declining investment markets have evaluated our ability to remain focussed on our end goal, in turn, ease of access to information or misinformation, and social media influencers, have pushed us over the edge. We feel the need to act and do something in the face of this mounting crisis of market despair; ultimately to our detriment in the journey of long-term wealth creation.

While this year may have been challenging for the investment market, it is important to remember that most of what we see, and experience is out of our control. So even though this is tough to absorb, it is important to stay in the moment and understand that we cannot control everything but if we are mindful – that is self-aware, present, engaged in what we are doing, able to let our thoughts and feelings flow through us without getting hooked by them – then we can exert control in these areas. Your own behaviour is the most important thing you can control. If you can master your behaviour, you will certainly succeed as a long-term investor.

Out of your control:

The Economy

In the grand scheme of things, our spending has little to no impact on the economy. We have zero influence with the Reserve bank or interest Rates, and our purchases of items like mobile phones or cars have almost no impact on corporate earnings or market volatility. Despite all this, you still contribute to inflation everyday, simply by spending your money.

The Markets

No matter how much you might try to control the markets, they will always be unpredictable and seemingly out of your reach. Even if you had billions of rands at your disposal, it would still be impossible to influence the trillion-rand/dollar marketplaces. They operate on their own, unaffected by those who inhabit them. Markets are always looking ahead and pricing in good and unwelcome news, long before we can react to positive or negative price movements. A proven strategy is to always take a long-term view and you will always be well rewarded.

In your control:

Your financial planning and investment portfolio

Constructing a financial plan that will help you weather recessions, market volatility and drawdowns.You need something you can live with, something that is tailored to your risk tolerance and has achievable goals. The asset allocation and diversification in your plan should reflect this. Additionally, we need to ensure that you know where you are headed and how well you are doing along the way. This includes building towards and in retirement. You can control your financial destiny by living within your means and making wise choices about your behaviour, taxes, fees, and expenses. Reading too much negative news can affect your outlook in a destructive way, so be selective about the news sources you consume.

Conclusion

If we are on autopilot, being spun around by our thoughts and feelings, we are not likely to be able to exert control in these areas. But if we are mindful – that is self-aware, present, engaged in what we are doing, able to let our thoughts and feelings flow through us without getting hooked by them – then we can exert control in these areas. Your own behaviour is the most important thing you can control. If you can master your behaviour, you will certainly succeed as a long-term investor.

Short Term News Update - Greg Brits

INSTALLING SOLAR PANELS

With South Africa’s struggling power grid, many consumers are finding alternatives to best serve their households and businesses. The installation of solar panels has become very popular, however, from an insurance perspective, we would like to point out a few very important considerations when the panels are installed on a pitched roof.
• Identify accredited manufacturers and installers who have many years of experience in this
• Check with your installer, in writing, that your roof can withstand the additional load bearing
• Following the above point, ensure that your installer has a Contractors All Risk Policy that is valid and active. Damages to your roof, tiles, gutters etc., may not necessarily constitute a claim via your Insurer as the contractor caused the damage. This would also apply to flat roof was not designed to accommodate the extra weight. field. This also means that the warranty periods are greater, which works in your favour. weight. This is vitally important as Insurers may repudiate a claim based on the fact that the roofs as damage may be caused to your waterproofing. INSTALLING SOLAR PANELS
• A COC (certificate of compliance) must be issued upon completion of the installation. This also applies to upgrades of an existing solar system if you decide to do so.
• Remember to notify us of the replacement value for the solar system, as your building sum insured will more than likely need to be increased. In the event that you rent premises or are the tenant of business premises, you do have the option to insure the system on an All-Risks basis.

HOLIDAY TIPS

The holiday season brings its own challenges with regards to safety on our roads but also the crime aspect when your home is unoccupied. Here are a few tips to remember:
• Test and service your alarm system to ensure that battery back-ups and all required zones are fully operational.
• Clear your post-box as thieves monitor activity at residences. A full post-box means no one is at home.
• Leave a spare set of keys with a neighbour or family member in case of emergencies.
• Switch off unnecessary appliances which won’t be in use whilst on holiday, namely geysers or gas supplies.
• Where possible, switch off the water supply to the home to avoid unnecessary pressure build up should a pipe leak or burst.
• Ensure your electric fence is fully operational.

We would like to take this opportunity to thank all our loyal clients for your continued support during 2022. We wish you and your families a blessed Christmas and prosperous New Year, may your holiday season be filled with love and memorable occasions. Should you have any questions with regards to solar installations and your Insurers requirements, please do not hesitate to contact our office.

Best Regards and Merry Christmas,
Jurgens Insurance Brokers Team

May your holidays sparkle with moments of love, laughter, and goodwill, and may the year ahead be full of contentment and joy.

Quote of the day :

We are extrapolating machines in a world where nothing too good or too bad lasts indefinitely.

Morgan Housel Tweet

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Third Quarter 2022 – In Touch

Jurgens Team — Thu, 22 Sep 2022 12:15:32 +0000

Investment news for you

Some of our ladies prepared a delicious Spring Day breakfast for Jurgens Finance, which was thoroughly enjoyed by all!

Short Term News Update from Greg Brits

A message from Mark Jurgens

Welcome to the months of Spring! Despite the global turmoil endured by many; one must take a moment to appreciate the fresh signs of Spring and hope for a less volatile last quarter of 2022.

Having discussed behavioural ﬁnance in previous newsletters, I want to continue with an additional bias, being the Action Bias. The Action Bias describes our tendency to favour action over inaction, often to our beneﬁt. However, there are times we feel compelled to act, even if there is no evidence that it will lead to a better outcome than doing nothing.

A recent appropriate example of this would be a study by Momentum. 2021 saw increased engagement between investors and their portfolios, driven by panic – causing many investors to lose money by switching their investments midway through the downfall. It was found that retirement investors performed more than double the volume of switches to their portfolios in 2021, amounting to over 50 000 switches. Putting it into perspective, these 50 000 plus switches in the retirement investment landscape resulted in nearly half a billion rands in value destroyed in 2020 and 2021 as retirees battled to overcome the market turbulence trap that may have lasting effects to their standard of living.

Momentum, being a medium sized asset management company holding only a portion of retirement investments, have only reported their ﬁgures. This means that taking into account all investment management companies, this loss would amount to billions of rands.

Factors such as panic, overconﬁdence, and a desire for control can lead us to make poor decisions when it comes to our investments. It can result in us over-trading or selling at low levels. These decisions result from the action bias, as we feel compelled to do something, instead of patiently working towards a future goal. In situations where the correct decision is unclear, our automatic response tends to be based in action; ignoring the potential beneﬁts of inaction. As we have consistently advised you, our clients, more damage is done by making changes to portfolios and attempting to ‘time the market’, rather than taking no action and beneﬁting from ‘time in the market’.

If you have any concerns or questions, please never hesitate to contact our ofﬁces, as we are here to add value to both you and your investment portfolio.

Stay well and regards.

Mark Jurgens

'Wealth vs Getting Wealthier by Morgan Housel' from Alan Botha

Will Smith writes in his biography that:

• Becoming famous is amazing. The amount of fame almost does not matter.
• Being famous is a mixed bag. Same with money.
• Losing fame is miserable.

The amount of fame almost does not matter. It is the trajectory that people cling to.Same with money. I think for many people the process of becoming wealthier feels better than having wealth. If it’s wealth we were after, most of us would feel great, because most of us are unfathomably wealthier than we were a generation or two ago. Or ten years ago. Or ﬁve years ago. Or two years ago!

What feels great is being on an upward path. That is when dopamine takes over. That is when you can extrapolate it and assume it goes on forever, and compare yourself to where you were before, and feel like nothing can stop you. When that path declines – even if it happens when you have a level of wealth you could not fathoma few years ago – the whole sensation shatters.

U.S. household net worth is $80 trillion higher today than it was ten years ago, which is astounding. But it is about $700 billion lower than it was three months ago, which is honestly nothing. Yet one of those ﬁgures creates ten times the headlines, ten times the attention, ten times the emotions, ten times the introspection. It has nothing to do with the level of wealth and everythingto do with the trajectory.

The problem is that an occasional downward path is inevitable in investing. Outside of fraud, it is completely unavoidable. The reason markets can go up signiﬁcantly in the long run is because they make you pay the cost of admissionof going down a lot in the short run.

When people are addicted to the act of becoming wealthier – the numbers going up more than just the numbers being big – and the numbers going down is an integral part of how investing works, of course you will ﬁnd some shattered souls. Some broken egos. Some terrible decisions being made.

Same in business.
Same in careers.

When most people hear this, they respond with the classic line, “It’s the journey, not the destination, that matters!” OK, most of the time that’s good advice. But here it is backwards. An addiction to the process of making money is a version of never having enough and never being satiated. It is a game that cannot be won but offers the illusion of a ﬁnish line right around the corner.

That is OK for some people – if you genuinely enjoy the game, that’s great. But I think that’s two percent of investors, including professionals. My sense is many people suffer naively through the game expecting it to end, and they are frustrated when it never does. Or they think they like the game, but what they like is numbers going up, which is half the game. An indifference to the process – the path of the journey – and a focus on the outcome and goal is the best most people can do with money. Or an acceptance of the process, knowing it will be a constant chain of surprise, volatility, setback, and disappointment, but if you can stick around long enough the odds of eventual growth and success are in your favour. That is vastly different from enjoying the process, which can quickly turn into an addictionto needing more.

Money buys happiness in the same way drugs bring pleasure: Incredible if done right, dangerous if used to mask a weakness, and disastrous when no amount is ever enough.

Short term news update from Greg Brits :

Electrical/Gas/Geyser Compliance Certiﬁcates

It is important to note that many older homes, complexes, ﬂats and commercial properties may have geysers still in operation which may not comply with the new regulation. When a geyser replacement is required, the plumberis responsiblefor the installation.

They also need to ensure that it is installed and complies with the new SANS regulation released end of July 2020 which requires a Compliance Certiﬁcate (also referred to as a COC). This may result in additionalcosts.

Current regulation also requires that when Electrical or Gas Installations are installed or changed that an updated COC is required.

It is therefore very important to use an Accredited Electrician / Plumber/Gas Installer.

If in the unfortunate event that you make use of a non-compliant electrician or plumber, you will then assume the full responsibility as the owner of the property, for the electrical and plumbing installation, which may result in a claims dispute or possible rejection.

Please remember to use your Insurer’s call centre where applicable, to ensure the process is handled correctly, and hence we urge all our loyal clients to contact our ofﬁce should you require any additional information in this regard. We would also like to take this opportunity and thank our clients for theircontinued support.

Staff News

Congratulations to Kim Boshoff on achieving her 15 Year Service Award – Presented by Greg Brits, Lorraine Else and Mark Jurgens. We wish Kim many more years as a valued member of the Jurgens Insurance team.

Quote of the day :

“Debt removes opƟons, savings add them.”

UNKNOWN Tweet

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First Quarter 2022 – In Touch

Jurgens Team — Mon, 25 Apr 2022 12:36:15 +0000

Investment news for you

The Jurgens Group thoroughly enjoyed attending our Annual Conference, something we sorely missed after the last two years of COVID.

A message from Mark Jurgens:

2022 has certainly started more intensely than any of us expected. Expectations of a Covid free life were replaced with the Russian/Ukraine unrest.

In response to many concerns being voiced recently, I thought it opportune to begin with the benefits of managing behavioural finance. Emotions, moods, relationships, and personalities affect us all. Sometimes for positive reasons, and sometimes to our detriment.

Part of an advisor’s job is to help you plan for your future. This involves finances, residences, employment, family, and retirement, amongst other individual requirements.

This year, our newsletter will carry a four-part series in which I will be discussing “Behavioural Finance.” Clients often forget about why certain plans have been initiated and begin discussing new ideas. In most instances, moving away from structured plans results in the long-term objectives not being achieved. Once plans have been actioned, they need to remain enforced.

Advisors are there to remind investors of the implemented plans and why they were agreed upon. Volatility (market crashes, war, cool unrest, pandemics, calamities) create anxiety and fear of loss. History has shown that making sudden changes in volatile times normally result in additional losses.

An advisor is there to assist in creating a stable environment, avoiding knee jerk reactions and to discuss and ensure the correct decisions are maintained. March 2020 is a good example, whereby investors panicked only to see the markets fully recover (with additional profits) over a period of eight to nine months.

We all make better decisions when discussing, debating, and sharing them with a trusted person.

“Herd Investing” is a common behavioural finance flaw. It relates to investors believing a large group of people in a certain product must have done the necessary research and this therefore proves the environment must be ethical and profitable. Bernie Madoff, the US hedge fund manager, created embarrassing experiences for many so-called professional investors due to a herding approach.

One could say that trusted financial advisors should be considered “a partner who ensures I make the correct decisions and avoid impulsive, un-calculated decisions.” “Herd Investing” is a common behavioural finance flaw. It relates to investors believing a large group of people in a certain product must have done the necessary research and this therefore proves the environment must be ethical and profitable. Bernie Madoff, the US hedge fund manager, created embarrassing experiences for many so-called professional investors due to a herding approach. An advisor is there to assist in creating a stable environment, avoiding knee jerk reactions and to discuss and ensure the correct decisions are maintained. March 2020 is a good example, whereby investors panicked only to see the markets fully recover (with additional profits) over a period of eight to nine months. I believe it takes time and experience to be in a position to apply the above qualities. Although these points are infrequently discussed, they are probably the most important skills required in a financial advisor.

I have personally assisted investors over the last six weeks with regards to appropriate behaviour during the current unstable climate. Do not ever feel any financial uncertainty is too small to discuss.

Stay well and regards,

Mark Jurgens

‘Addressing current market volatility', from Alan Botha

When events like the war in Ukraine, the rand weakening, oil rising to more than $120 a barrel, unusually high inflation and market volatility dominate the news, it is natural for investors to question and second guess their investment strategy.

To say that the start of 2022 has been volatile would be somewhat of an understatement. In recent weeks, markets have been tossed back and forth by speculative headlines regarding the potential for Russia to invade Ukraine. The potential invasion has become a reality with Russia launching their troops into pro-Russian regions in Ukraine. This has led to the S&P 500 falling into a correction for the first time in two years, joining the Nasdaq Composite. (A correction is defined as a drop of more than 10% but not more than 20%.) Events like these may not be new, however, the volatility and uncertainty it causes does not make it any easier for investors to deal with. How should investors best attempt to manage geopolitical risks in portfolios?

• The first is predicting and gambling, where investors try to predict the outcome of the event and then guess the impact it will have on the market. If done correctly it could make them seem like a market master, but often investors, and most market participants, get it terribly wrong.

• The second is the flight instinct, when faced with market volatility heading.” Well, that is nice. Now comes the test. Given the recent risks would have on the intrinsic value of investment markets which requires a rational framework and immense discipline. and panic, some investors prefer to sit out and wait, i.e., move to cash or what is deemed safe-haven assets (like gold). The problem is that the opportunity cost of not being invested in the market could be large

• The third is remembering valuation and the impact that geopolitical risks would have on the intrinsic value of investment markets which requires a rational framework and immense discipline.

• The fourth and most important is holding tight and focussing on the long term. Most of us know long term is the right strategy when it comes to careers, relationships – or anything that compounds. But saying “I’m in it for the long run” is a bit like standing at the base of Mount Everest, pointing to the top, and saying, “That’s where I’m heading.” Well, that is nice. Now comes the test. Given the recent and expected continuation of market volatility throughout 2022, what lesson can we remember when we are trying to think and act long term?

The long run is just a collection of short runs you must put up with. Long-term thinking can, to some extent, be a deceptive safety blanket that investors assume allows them to bypass the painful and unpredictable short run. Unfortunately, this is very rarely the case, it might be quite the opposite – the reality is that part of long-term investing is dealing with short term pain, and you will need to embrace downturns throughout your investing journey. Annual return and drawdown data of the S&P 500 show that – although over the last 42 years we only ended up with an annual negative performance in nine out of the 42 years – every single year (in the 42 years) had a drawdown or temporary setback in the market, and each of those for vastly different reasons.

As we move through this latest period of market volatility, we continue with our investment partner Morningstar Investment Management’s 90-strong investment team to continue to prioritise research by not overreacting to current events. Our managed portfolios are well diversified across multiple asset classes and different sectors of the market and portfolios will be protected from the extreme volatility in many parts, while exploring any opportunities which may emerge.

Alongside this, the portfolio managers are continually evaluating the portfolios by simulating different scenarios to ensure that they remain robust to a broad range of potential economic outcomes rather than simply those that dominate the headlines today.We encourage our clients to take the approach of navigating this unknown territory, by focusing on the longer term, knowing that ”this too shall pass”.

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Second Quarter 2020 – In Touch

Kim Wright — Mon, 14 Sep 2020 15:36:55 +0000

A sign of the times!!

We are committed to our responsibilities to safely meet with our clients at Jurgens Group offices. Adhering to all Health & Safety COVID-19 regulations and social distancing, it has become a rather different way of meeting and greeting.
Group offices. Adhering to all Health & Safety COVID-19 regulations and social distancing, it has become a rather different way of meeting and greeting.

Message from Mark Jurgens

First and foremost, I would like to wish you and your loved ones ongoing good health and patience in dealing with our “new normal” lives.

These unsettling COVID-19 times are clearly impacting on our lives, the people we love, our colleagues and our communities. Without question, we are experiencing a health and economic crisis which we have not witnessed in our lifetime.

How different each of our days have become; working remotely, social distancing, wearing of masks, hand sanitising, juggling work and parenting commitments; as well as maintaining the ever-important connections with family and friends – albeit virtual.

A friend’s young child asked him “Dad, what happens when this is all over?” He needed to pause and reflect upon the magnitude of such a simple question.

One may feel that we are navigating without a map but we will tread cautiously, find our footing, and together with that, our new directions. This process will require vision, innovation, leadership and a strong sense of realism. Leadership within times of disruption and distress will test many an organisation

and the actions taken today will be judged for many years to come. This will require difficult trade-offs and tremendous patience.

Before COVID-19, we were already in a constant cycle of retraction followed by the emergence of recovery, only for this global event to undo our gains. This distressing factor is that some companies will not emerge from this crisis, and the implications of this upon lives and communities will be severe.

This crisis has prompted the loosening of financial prudence at the state level and led to the introduction of historic stimulus packages. The benefits to the real economy are yet to be realised.

I am positive that from the many lessons learned during this year, we will recover. A better tomorrow shall be one where humanity and community are central and where the best of agriculture, manufacturing, healthcare, science, data and technology is leveraged. It will take a different way of thinking and increased levels of agility and collaboration.

With regard to investments, it is natural for one to feel the “need to make a change”. This provides a feeling of being in control. However, unnecessary change and knee jerk reactions are very rarely financially rewarding.

Please do not allow your guard to drop due to the lifting of “Lockdown levels”. COVID-19 has no regard to levels. Maintain the three golden rules – safe social distancing, masks in public and regular washing / sanitising of hands. Lighten your mood with a variety of face masks, spoil yourselves with a moisturising and fragrant hand cream and when you stand a few feet away from a friend or loved one, show them a smile in your eyes and remain present in that moment (not on your phone!)

Above all, let us worry about your investments and you take care of you and yours. A positive and optimistic demeanour will go a far way in maintaining your health and strength.

Take care,

Mark

Championing Changes from Alan Botha

The Covid-19 pandemic has had an impact on most industries and the financial services sector is not immune to some of the disruption that has ensued. In fact, we have now seen an acceleration of some of the impending changes led by technology and increasing regulation. Jurgens Finance have been at the forefront of championing some of these changes, to ensure an industry which is representative of superior quality advice, full transparency of fees and that ultimately, better client outcomes are garnered through this process.

One of the changes we have adopted in our enhanced business model, was to bring on board an independent global research capability, to assist us with selection of underlying investment managers in the portfolios we manage for our clients. We sent out a communication in February that we have now appointed Morningstar as a discretionary fund manager (DFM) to assist us in this role.

In the past Jurgens Finance managed all portfolios in-house and although we have achieved much success and delivered credible performance outcomes for our clients, we felt it an appropriate time to add even more robustness and expertise, to our investment process and committee. We believe that the true value of what we do, lies in the holistic advice that we disseminate, getting to know our clients intimately, to provide credible, individualized solutions. Although we still maintain full responsibility for the portfolios we manage, Morningstar will now assist in taking much of the Due Diligence function off our shoulders, which enables us to focus on the financial advice that really matters.

What is a discretionary fund manager (DFM)?

Discretionary fund managers (DFM) are investment specialists who assist us in constructing and optimising our investment offering to our clients. They research and select different fund managers and combine them optimally to target the returns required depending on your tolerance for risk, and whether you are growing your assets or drawing an income.

When identifying investment managers, we will look to blend managers who have different investment styles and objectives to avoid duplicating risks and ensuring enhanced diversification. This will ensure that through all market conditions, the portfolio will not all do well, or lose money at the same time. This also allows us to switch all underlying investors at the same time, if for example, an underlying manager falls out of favour or changing market conditions dictate that we make a tactical change to our portfolios.

Why Morningstar?

We investigated many DFM’s, and in our research we came across over 40 businesses offering these types of services in South Africa. Many DFM’s are owned by larger financial services groups and use or provide services to other parts of the group. Morningstar was appointed on the back of being truly independent (ownership structure), with outstanding experience and qualifications of the research team, a compelling investment performance track record (consistent and above-average returns), and importantly represented a good cultural fit, with extensive global capabilities (assistance with both local and global portfolios).

We also utilised Morningstar to negotiate lower institutional fees from the various investment managers, which translate into all our portfolios having lower costs, even after paying a fee to Morningstar for their services.

We are excited about this latest development and are confident that this will deliver exceptional investment value over time to our clients. We will continue to work on our business model to ensure we keep adapting to this changing environment, with the continued delivery of stellar service, well researched advice, and investment outcomes that allow clients to achieve their financial planning objectives.

Short Term News Update from Greg Brits

The impact COVID-19 has had on business and life in general, is devastating. New ideas need to be developed and invented to continue doing business and operating in such extraordinary times – all for the sake of stopping the spread of a deadly virus. Our hearts go out to those businesses who are unable to trade and operate at present.

Please remember that we still have The Talking Point initiative in place for those who wish to chat to someone confidentially. Our current situation has added a huge burden on our economy and stress on individuals, families and communities. Should you be feeling trapped, isolated and financially overwhelmed due to lack of income, please call 0861 887 887 for help to cope.

As Directors and Managers of businesses trying to adapt to the “new” normal, you may encounter exposure to possible lawsuits by companies or customers for example. Cases which may have been unheard of before Covid-19. Fortunately, there is a reasonable cost-effective product called “Directors and Officers cover” to assist with this type of abnormal experience. Please chat to us about adding this to your existing policy or as an independent quote.

During times where staff need to work remotely, this can lead to exposing one’s business to Cyber liability. The result could be costly company losses and brand damage while trying to solve this issue. We have webinars that we can share with you should you want to know more.

Please bear in mind that keeping large volumes of hand sanitisers in stock on premises carries due risks because of its known low flash point. Please ensure that the relevant storage by-laws are adhered to.

We have been in contact with many of you during this time of lockdown and as always, we are available to assist you during these trying times.

Staff news

Miguel Araujo receiving his 5 Year Service Award from Mark Jurgens.

The Jurgens Group has become more than just colleagues of mine, we are like a family who strive for nothing but the best. Under the guidance and mentorship from Mark over the past 5 years, I have grown tremendously as a person as well as a wealth manager. I look forward to what the future holds within the business and I intend on being here every step of the way. I would also like to take this opportunity to thank all my clients over the past 5 years for entrusting me in managing their portfolios. Here’s too many more!

Quote of the Day

“Never cut a tree down in the winter time. Never make a negative decision in the low time. Never make your most important decisions when you are in your worst frame of mind. Wait, be patient. The storm will pass. The spring will come”

Steve Jobs Tweet

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Second Quarter 2019 – In Touch

Kim Wright — Tue, 02 Apr 2019 04:53:38 +0000

Introduction from Mark Jurgens

As we have now passed the 21st of June, our winter solstice, we are officially in the second half of winter and soon the cold weather will be over.

In this edition of “In Touch” I would like to raise awareness of Environmental Social Governance (ESG) standards. ESG standards are becoming a significant consideration of environment conscious investment world:

Environmental: Climate change, Carbon Emissions, Deforestation, Pollution and Waste, Natural Resources.
Social: Labour Management, Health & Safety, Product Liability, Stakeholder Opposition, Social Opportunities.
Governance: Business Ethics, Corporate behaviour, Anti-competitive Practices.

Many offshore investment companies offer mutual funds that employ and consider ESG criteria their investment practices and decision-making. When seeking out investment opportunities for long-term sustainability and minimising financial risk, these offshore companies are seriously focused on investing in companies with values that match their own and who are committed to ESG standards.

Old Mutual recently launched South Africa’s first ESG Index funds:

Old Mutual MSCI World ESG Index Feeder Fund; and Old Mutual MSCI Emerging Markets ESG Index Fund. These Index tracker funds replicate the performance of top international companies which show the highest ESG commitment. Index or passive funds are generally less expensive than actively managed unit trust funds.

From research, it has been found that the consumer is positive and in favour of supporting ESG- friendly companies. When we look at tracker funds and stock markets, we will see that ESG-Committed companies have outperformed their peers in the same type of industry over the last 5 years, a trend which we believe will continue.

We have had requests from a few clients who are aware of and are keen to support ESG related companies. Should you wish to find out more or discuss the options of investing in ESG funds, you are always free to contact me.

A New Mindset to Wealth Creation and Preservation - Alan Botha

Many investors contribute to retirement funds during their entire working lives, however, statics published, suggest that most retirees don’t retire with financial security. The introduction of new regulations known as retirement default options are designed to improve this outcome. The regulation, introduced in September 2017 and implemented on the 1st of March 2019, compels all retirement funds to adopt a set of default options to preserve savings before retirement and to provide an income option in retirement.

Currently, most fund members are not exercising preserving savings. They cash in their savings, incurring additional tax and seriously compromising their ability to generate a decent income in retirement. The government and the retirement fund industry hope that this will improve as the new regulations also compel funds to counsel members on their options when withdrawing from a fund or retiring. While these regulations should help in ensuring better outcomes for retirees by reducing some of the behavioural issues of cashing in retirement funds early, I cant help but think it is merely addressing the symptom and not the actual underlying cause of the behaviour.

The behaviour relates to general education around financial literacy, which Stanley Fallaw, a long-term researcher of wealth trends, defined as “the knowledge of or ability to use personal financial management practices and methodologies”. Advice on money often boils down to simplistic messages about budgeting, understanding compound interest and avoiding debt. Research suggests that financial decision – making depends as much on values, expectations, emotions, and family experiences, as information learned at school.

In short, the way people interact with money is highly complex and as the world evolves, it may become more complex. An insatiable appetite for instant gratification and consumerism suggests that investors have lost sight on what is considered meaningful to them and the appropriate ability to disseminate the difference between “nice to haves” and “must have” purchases.

Thinking about the future is incredibly important when it comes to managing money and considering future consequences and a willingness to delay gratification in favour of longer-term goals is key. In turn, self-control and conscientiousness is the process by which we control our thoughts, feelings, and behaviours. Being aware of our decisions is also important. These are the kinds of thought processes necessary for good financial decision-making.

As Carly Sawatski suggests, “Instead of only focusing on values laden advice about what makes a wise financial decision (such as avoiding debt), rather use questioning techniques to stimulate and guide your thinking”. These could include:

• Reasons: What are your reasons for making that decisions?

• Evidence: Can you convince me that is the best decision?

• Argument: What would someone who disagreed with you say?

• Impact on others: Will your decision affect anybody else?

• Consequences: What might happen next?

These questions engage people to think about what drives them and what all their available choice might be. A period to reflect on the decision made will also reinforce learning and improve any future decision-making ability.

We believe the above information ties into our most critical role to play as advisers, where we remove the emotion and biases from financial decision making, exploring alternatives from various angles with critical questioning, to ensure we make thew best decisions in collaboration with our clients.

Short Term News Update – Greg Brits

With the current economic times we find ourselves in, we have noticed a definite increase in Commercial Crime i.e. companies experiencing financial losses as a result of theft and fraud by employees, computer fraud, computer viruses, extortion, fraudulent transfer instructions to financial institutions, this to name just a few examples. Theft by employees is a general exclusion under most sections of a commercial insurance policy and can be covered under the fidelity section or by a separate commercial crime policy:

In more detail, a commercial crime policy covers the following scenarios:

Computer Fraud: The insured is hacked, the hacker gains access to their banking profile and transfers the insured’s funds to themselves. Alternatively, the fraudster obtains the insured’s banking log-in details through a phishing campaign.

Extortion: For example, the insured or a staff member is threatened with physical harm unless a ransom is paid.

Contractual Penalties: when checking a stock delivery for a specific customer’s order, the insured finds stock missing due to employee theft. He is then unable to make delivery to his customer in accordance with their contract and incurs contractual penalties. These are payable under the Commercial Crime Policy.

Fraudulent Transfer Instruction: In the case where an impersonator gives instruction for payment to be made from a company’s bank account, and the bank’s security checks fail to determine this, the impersonator receives the funds. Although it can be argued that the illegitimate party, the client can claim back from the crime policy and we subrogate against the bank’s insurers. Historically these incidents have not been as prevalent and cover not taken up. We would encourage clients to contact our offices should they wish to add this Commercial Crime Cover.

General Maintenance

During the winter months is the best time to inspect roofs for general maintenance. Insurers are becoming more reluctant to pay out claims for resultant damage from maintenance related causes.

Vacant Buildings

An owned property being left vacant – i.e. has no furniture in it – may it be while letting the property and in the process of changing tenants; or when selling a property you have vacated while awaiting transfer to the new owners to be finalised, it is imperative that you advise us of this to ensure continues cover. All insurers exclude cover on vacant properties unless otherwise agreed. This is due to the increase in vandalism and theft while properties are left vacant.

Investec Global Select Investment Conference

Mark and Alan attended the Investec Global Select Investment Conference in London recently. Some of the world’s foremost asset managers, business leaders and industry experts shared their insightful ideas with delegates.

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