jurgens logo grey horisontal

Category: Uncategorized

Posted on

We discuss market volatility

market volatility
market volatility
We understand the recent correction in share markets has raised concern and worry for many of our clients. In this video update, we address the current market volatility and discuss your best defence in these challenging times.

Our investment philosophy focuses on risk vs return ,focusing on the importance of long-term investments regardless of whether you are retired or building towards retirement. Your investment strategy is built to handle market dips and correctional cycles by having appropriate diversification across many asset classes. We expect corrections – we just don’t always know when they are coming. We also recognise that we have been here before as periodic sharp falls are regular occurrences in share markets. Over the last 50 years, even the worst market pullbacks rewarded investors for staying their course.

We expect to see many negative headlines during this time as the central banks globally try to keep inflation in check.  It is best to try to block this negative news flow out, as it only causes more harm than good and makes it harder to stick to your long-term investment strategy. Take advantage of cheaper markets if you can do so. When assets fall in value, they are cheaper and offer higher long-term return prospects; look for investment opportunities that these pullbacks provide.

Whilst the temptation can be there to chop and change your investment approach. History tells us this is often the worst thing to do. Making wholesale changes to your investment strategy gives you two chances to get it wrong. When to get out and when to get in. Hope is not a strategy – hoping you get this right is akin to gambling. The best defence is to have a robust strategy and stick to it.

We hope that this video and commentary provides you with some insight and reassurance during these difficult times.

In this short recording – under 10 minutes – we tackle the topics of:

• Why now is the time to remain invested.

• A quick investor-friendly overview of the events influencing markets.

• Previous market crashes and how we have been here before.

• Time in the market remains superior to timing the market.

• The long term is just a collection of short runs.

• Cash does not outperform in the long-term.
Please feel free to contact us if you need further clarity or would like to discuss your current portfolio positioning.
Posted on

Second Quarter 2022 – In Touch

5 year service award

Investment news for you

5 year service award

Congratulations to Lemeryn Olivier and Lynne Ricardo on achieving their 5 Year Service Award – presented by Alan Botha and Mark Jurgens. We wish Lemeryn and Lynne many more years as valued members of Jurgens Finance.

A message from Mark Jurgens:

I trust this finds you in a much healthier headspace than this time last year, and I am pleased to note that Covid is no longer everyone’s main topic of conversation. The latest wave is seen to have been a fraction of the past waves experienced, and global deaths have decreased dramatically.

Worldwide inflation continues to be the major concern in world markets. The possibility of a recession concerns global investors. Current volatility may continue, however, any un-calculated changes to our planning normally results in losses.

As mentioned in our previous newsletter, we are discussing Behavioural Finance flaws this year.

Overconfidence Bias is an emotional bias. It is the tendency to overestimate our abilities, skills, and talent. We believe that we are better than we actually are. The danger of an overconfidence bias is that it makes one prone to making mistakes in investing.

Confirmation bias is another behavioural finance obstacle. Most of us have a really bad habit of only paying attention to information that confirms our beliefs and ignore information that contradicts it. The tendency is to form views first and then look for information which makes our opinion look correct. This is disastrous for investment decision making. We should rather be looking for disconfirming information and evidence that opposes our personal views, this would allow for more robust decision making.

Behavioural finance teaches us to invest by preparing, planning and by making sure we pre-commit.

A quote from Warren Buffett: “Investing success doesn’t correlate with IQ after you’re above a score of 25. Once you have ordinary intelligence, then what you need is the temperament to control urges that get others into trouble.”

Overconfidence tends to make us less than appropriately cautious in our investment decisions. Many of these mistakes stem from an illusion of knowledge and/or an illusion of control. It is encouraged to focus on the process rather than just the possible outcomes, this leads to better decisions, as the process helps in reflective decision making.

Stay well and regards

Mark Jurgens

'Stay on these roads' from Alan Botha :

In the words of Peter Lynch two years after the March 2020 Covid crash – “More money has been lost in crises trying to predict what is going to happen than actually in them”. As with all things unknown and uncertain, it is human nature to speculate how things will pan out. Although we have no actual control over the outcome, being mentally prepared for a certain outcome brings comfort – especially when it comes to our investments.

Success in difficult markets looks more like survival – surviving our own behavioural mistakes, avoiding timing the market, and staying invested. Investors often hear that they should tune out the noise and not pay attention to market turbulence and panicked news headlines. This is much easier said than done when it comes to your hard-earned money.

As investors, we are intrinsically loss averse which, simply put, means we hate losses more than we love gains.The three most important words when it comes to predicting the future are most definitely “I don’t know.” Time in the market is superior to timing the market and even if you time getting out of the market and into cash perfectly, knowing when to get back in can be exceedingly difficult.

Let us consider a recent example: at the end of February 2020, we saw the beginning of a historic decline in the S&P 500, the market finally reached the pandemic low on 23 March 2020 and a bear market (a decline of more if 10% in the market) became a reality. Historically, it could take an average of about two years for the market to recover from such a sell-off – except, this time it happened in just 149 days. By the end of August 2020, the index had regained its strength and reached record highs. If history has taught us anything, it is that the best days do come after the worst.

In closing – what do you do when you do not know what to do?

1. Remember that cash has not (historically) managed to outperform equities and bonds over the long term.

2. The long term is just a collection of short runs and having a long setbacks in markets. term strategy does not exonerate investors from short-term setbacks in markets.

3. It is vital to separate emotion from an investment portfolio. Often timing the market. one expects them to, it really is about time in the market and not the most beleaguered investments turn out to be a fantastic opportunity for future returns, as investors can access these investments at a decent price.

4. Volatility creates opportunity and short-term under performance can translate into a solid, longer-term upside.The unwelcome news – markets are volatile right now and it is all being driven by interest rates, inflation, and the fear of a slowing economy. The good news is that very few investors are bullish, and good things tend to happen when most investors think they will not.

5. Volatility creates opportunity and short-term under performance investments at a decent price. can translate into a solid, longer-term upside.

The unwelcome news – markets are volatile right now and it is all being driven by interest rates, inflation, and the fear of a slowing economy. The good news is that very few investors are bullish, and good things tend to happen when most investors think they will not.

Staying the course does not necessarily mean sitting still. It means avoiding bad behaviour, remembering your goals, and ensuring your approach with discipline.If your goals have not changed, then your investment strategy should not either.

Short term news update from Greg Brits :

Maintenance or Wear and Tear

One of the most common maintenance issues in many homes, office parks, buildings, and body corporates, is rising damp.

At the time of construction, a damp-proof course is laid which prevents damp from the ground rising up the walls, which damages the property. Sadly, properties which have inadequate or inappropriate damp protection layers, may be affected by excess moisture rising from the ground. Similarly older buildings where damp course may have deteriorated over a period of time, may experience damp issues as well.

In most instances Insurers will unfortunately reject a claim, due to the loss being a maintenance related issue, and the fact that rising damp occurred over a period of time and is not a sudden event. When identifying the bubbling effect and discolouring of walls that damp causes, it’s an early warning sign that the buildings damp course has failed, and it is time to call in the experts. Unless something proactive is done the discolouring and wetness will continue to spread both vertically and horizontally in the walls, exasperating the problem which ultimately means a much higher cost of repair.

The source of rising damp is usually from the foundations or exterior walls. In terms of the Sectional Title Act, maintaining common property is the responsibility of the body corporate, even though the damage presents itself on an interior wall.

Material changes to your financial status

When applying for a short-term insurance policy, Insurance companies will automatically request an ITC report from the credit bureau. This is standard practice and assists in risk mitigation, which is an important factor when insuring an individual or business.

It is important to understand that any material change during the life span of your policy be communicated to your Insurer, which includes your financial soundness. Blacklisting incorporates, Judgements, Payment Defaults, Insolvency and Debt Review, to mention a few, are to be noted. This does not necessarily mean that an insurer will cancel your policy, they may consider reviewing the terms thereof. In many cases a simple motivation of your circumstances to your Insurer will suffice if payment arrangements have been made with the Creditors.

Staff News

New staff
Richard Jordaan joined the Jurgens Group in 2021 as a Financial Advisor and Paraplanner. He has a BCom Investment Management degree from Stellenbosch University and has completed a Higher Diploma in Financial Planning. He is also a qualified CFP and is busy studying towards his CFA designation.

Richard’s career has been spent in the Wealth Management industry. He is passionate about Financial Planning and assisting clients in finding the optimal financial plan for their future. He adopts a hands-on approach and loves interacting with his clients and building honest, trusting, and long-lasting relationships.

He enjoys spending time with his family and friends and is an avid sportsman and a loyal Manchester United fan.

Quote of the day :

'The best way to deal with uncertainty without hiding in a bunker is to save like a pessimist and invest like an op mist.'

UNKNOWN Tweet
Posted on

First Quarter 2022 – In Touch

jurgens group

Investment news for you

JURGENS GROUP

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

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”.
stock market
Posted on

Fourth Quarter 2021

Fourth Quarter Jurgens 2021
Fourth Quarter Jurgens 2021

Congratulations to Lynette Govender on achieving her
20 Year Service Award – presented to her by Mark Jurgens and Alan Botha.
We wish Lynette many more years as a valued member of the Jurgens Finance team.

A message from Mark Jurgens

A client of ours recently asked me how we had managed to achieve such competitive investment returns in the last twelve months. Good question.
I would like to explain a little more about our relationship with Morningstar, as I believe their involvement in Jurgens finance is not clearly understood by all our clients.

Morningstar is a AAA rated global financial services organisation. They have analysts in countries around the globe. They are involved in a tremendous amount of research to provide valuable information in selecting the top fund managers and assisting in asset allocation decisions.

Morningstar’s research, expertise and analysis are trusted amongst the largest investment firms in the world, and this same insight has been made available to selected financial advisory businesses within South Africa.

When I started in this industry there was a selection of twenty unit trust funds in South Africa, today there are close to 1500 funds. At Jurgens Finance we endeavour to achieve the best investment returns for our clients, but the massive task of monitoring the performance of over a thousand funds would put us in a situation where we would have no time to see you, our client.

Morningstar provides all the technical information and assists in analysing the better performing unit trust funds, which are monitored regularly. With International Investments being highly sought after, this is another reason we make use of Morningstar and their global capabilities and expertise.

Our team at Jurgens Finance are zealous about your investments and are actively involved with Morningstar, in terms of ensuring our input is also utilised in the creation of these model portfolios. Meetings are held twice a month, in so doing, ensuring we remain in the top quartiles of investment returns.

We are extremely mindful of the many difficulties faced this year, and we want to take this opportunity to thank you for your ongoing support and loyalty.
We are hopeful that 2022 brings about more personal encounters while maintaining the highest level of safety.

Wishing you and your loved ones a happy, safe and peaceful festive season.

Stay well and regards

Mark

'Long term investing is never easy' from Alan Botha

(Extracts from Morgan Housel)

Most people know it is the right strategy in investing, careers, relationships – anything that compounds. But saying “I’m in it for the long term” is a bit like standing at the base of Mt. Everest, pointing to the top, and saying, “That’s where I’m heading.” Well, that’s nice. Now comes the test.

Long term is harder than most people imagine, which is why it is more lucrative than many people assume. Everything worthwhile has a price, and the prices are not always obvious. The actual price of long term – the skills required, the mentality needed – is easy to minimize, often summarized with simple phrases like “be more patient,” as if that explains why so many people cannot.

To do long term effectively you have to come to terms with four factors.

1. The long run is just a collection of short runs you must put up with.

Saying you have a 10-year time horizon does not exempt you from all the nonsense that happens during the next 10 years. Everyone must experience the recessions, the bear markets, the meltdowns, the surprises, and the memes at the same time.
So rather than assuming long-term thinkers do not have to deal with nonsense, the question becomes how you endure a never-ending parade of nonsense.

Long-term thinking can be a deceptive safety blanket that people assume lets them bypass the painful and unpredictable short run. But it never does. It might be the opposite: The longer your time horizon the more calamities and disasters you will experience. Baseball player Dan Quisenberry once said, “The future is much like the present, only longer.”

Dealing with that reality requires a certain kind of alignment that is easy to overlook.

2. Patience is often stubbornness in disguise.

Things happen daily now that would have been inconceivable just a decade ago (budget deficits, interest rates, meme-stock valuations, retail investor participation, pandemics etc.). The world changes, which makes changing your mind not just helpful but crucial.
But changing your mind is hard because fooling yourself into believing a falsehood is so much easier than admitting a mistake.

Doing long-term thinking well, requires identifying when you are being patient or just stubborn. Not an easy thing to do. The only solution is knowing the very few things in your industry that will never change and putting everything else in a bucket that’s in constant need of updating and adapting.

3. It is hard to know how you will react to decline.

If I say, “How would you feel if markets fall 30%?” you probably picture a world where everything is the same as it is today except stock prices are 30% lower.
And in that world, it is easy to say, “That would be fine, I’d even see it as an opportunity.”
But the reason markets fall 30% is because there is a terrorist attack, or the banking system is about to collapse, or there is a pandemic that might kill your whole family.

In that context, you might feel different. You might switch from an opportunistic mindset to a survival mindset. You might not have the endurance you once imagined.

4. Long term is less about time horizon and more about flexibility.

If it is 2010 and you say, “I have a 10-year time horizon,” your target date is 2020. Which is when the world fell to pieces. If you were a business or an investor It was a terrible time to assume the world was ready to hand you the reward you had been patiently awaiting.
A long-term horizon with a firm end date can be as reliant on chance as a short time horizon. Far superior is just flexibility.

Time is compounding’s magic whose importance cannot be minimized. But the odds of success fall deepest in your favour when you mix a long-time horizon with a flexible end date – or an indefinite horizon.
Ben Graham said, “The purpose of the margin of safety is to render the forecast unnecessary.” The more flexibility you have the less you need to know what happens next.

Short Term News Update - Greg Brits

There has been a recent surge in claims where an employee’s foreign driver’s license has been found to be fraudulent. Insurers do require a procedure to be put in place to check and ensure that your drivers hold a valid license. The following points will assist you in terms of what to check for. This will also be beneficial to your business, and in certain circumstances, protect you from a potential rejection at claims stage.

    • A clear copy of the driver’s license stating country of origin.

      • A letter (on an official letterhead) from the Embassy or Consulate from the relevantcountry concerned, must be stamped authenticating the individuals’ driver’s license is valid in that country,and that the license has not been cancelled or suspended.

        • The letter must include the date of issue, code of license (what he/she is permitted to drive) and the date the license expires.

          • The letter must be in English, stamped and signed with the person’s contact details who is validating the license to confirm that the information is true and correct.

            • A clear copy of their Passport must also be present.

              • If the holder of the foreign driver’s license is a RSA citizen or already has permanent residency, that person has a period of 1 year to convert his/her foreign license to a South African license. 

                With the rainy season upon us, maintenance to your home or business premises is vitally important. We believe the below pointers may prove to be very valuable to avoid disappointment at claims stage.

                • Property owners should take extra care and inspect roof tops for cracks and other maintenance related issues.

                  • Clean your drains and down pipes. Drainage systems and gutters must be cleaned out regularly to avoid any blockage from dry leaves and debris to prevent water accumulation and, ultimately, damage to roofs, fixtures and your home or business contents.

                    • Waterproofing to roofs, either flat or pitched, must be carried out by an accredited and professional repairer who guarantee their workmanship.

                       
                      From the Jurgens Insurance Brokers Team, we would like to thank all our clients for their loyal support and wish you and your families a blessed Christmas and prosperous 2022.
                     
happy holidays

Wishing you the joy of family, the gift of friends and the best of everything for the new year!

Quote of the Day

“The best and most beauful things in the world cannot be seen or even touched. They must be felt with the heart. Wishing you happiness.”

Helen Keller Tweet
Posted on

Third Quarter 2021

arrival of spring
arrival of spring
Celebrating the arrival of Spring, Jurgens Finance Admin Team: Back row from left to right: Bonny Panayi, Lynne Ricardo and Andrea Collins. Front row from left to right: Simone Heyman, Lemeryn Olivier, Lynette Govender and Jordan Busch.

A message from Mark Jurgens

Spring is such an uplifting and positive time of the year as it starts to warm up and bring about colour and new life.

You may recall we covered an article on Environmental Social Governance (ESG) funds in our previous Newsletter.  Investec Bank will be launching a SA-Domiciled version of the Global Sustainable Equity (GSE) Fund, originally launched in Guernsey.  The fund should be available from this month.

I personally support the ESG initiatives globally and believe that these portfolios will outperform those companies who do not endorse this philosophy.  Consumers appear to be more committed than companies and businesses regarding the way in which they value and support ESG principles. How business views the importance of supporting ESG, needs to be addressed.

The world is increasingly embracing the goal of achieving net-zero carbon emissions by 2050 in line with the Paris Agreement on climate change. Investec will use its own screening methodology to decide which companies to include in its GSE fund, with capital to be allocated only to companies it believes are making a net-positive contribution to the achievement of the UN’s Sustainable Development Goals.

These goals target around 17 variables that include poverty alleviation, clean water, reduced inequality, education, gender equality and other sustainability-linked goals, with a deadline of 2030.

Investec’s GSE fund will hold 30 to 50 investments in growth-orientated global stocks across a variety of sectors provided they meet its environmental, social and governance standards, and sustainability requirements.

At present top holdings in the fund include Microsoft, Prudential, Apple, Thermo Fisher Scientific, Roche, Medtronic, Novartis, Unilever, and Nike.  About 85% of the stocks held in the fund are covered by Investec’s global equity research team with the bulk of the remaining allocations outsourced to third-party funds including the Schroders Global Energy Transition fund.  The Investec GSE fund will be benchmarked against the MSCI world index and will be overseen by a committee based largely in SA and the UK.

As a Fund Manager at Investec states, “ESG will soon no longer be nice-to-have for shareholders and asset owners and will ultimately become a default expectation in terms of any long-term asset managers fiduciary responsibility.”

Stay well and regards

Mark

Quote of the Day

“Successful investing is about managing risk, not avoiding it.”

Benjamin Graham Tweet

‘Psychology of Money” from Alan Botha

Investing is not the study of finance – it’s the study of human behaviour. That’s how award-winning columnist Morgan Housel framed it in his discussion at a recent Allan Gray investment Summit, with a talk on “The Psychology of Money.”

Housel used storytelling to explore how investors make decisions around risk, fear, greed, and uncertainty. His goal was to discover how we can think about risk in a more productive way.

The Wright Brothers: Timing is meaningless, but time is everything

In hindsight, it’s hard to overstate how important the first flight was to human history. Nothing was the same afterwards. You don’t need scientific expertise to hold a childlike wonder at the sight of a large metal machine soaring through the air.  Yet, in the moment, news of the Wright Brothers’ accomplishment was hardly news at all. The only newspaper that did eventually cover their endeavours did so out of sympathy for their “silly little flying machine” with the headline “Dayton Boys Solve Problem.”

Housel’s lesson: patience is a competitive advantage.

While most investors consider themselves to be in it for the long term, they often define that as only 3-5 years – sometimes as little as a single year.  Housel contrasted this to the fact that 99% of Warren Buffet’s net worth was earned after his 75th birthday. His secret has largely been time horizon.  When progress is measured generationally, results shouldn’t be measured quarterly. The central problem investors fall for is underestimating the amount of time needed to put the odds of long-term success in their favour.

Stephen Hawking: Stop moving the goalposts

Stephen Hawking was asked how he could remain so happy despite the extremely unfortunate circumstances of living with a disease that slowly paralyzed his body. His response was remarkable, as usual. “My expectations were reduced to zero. Everything since then has been a bonus.”

Housel’s lesson: expectations are more powerful than circumstances.

Many people identify the 1950s as America’s best economic time, even though it is very easy to prove that it was no better than today.  Now our incomes are doubled, but our expectations more than doubled. We’re never going to be satisfied with any amount of money if our expectations grow faster than our wealth.  “Enough” is most important word in managing money. It’s different for everyone, but you need to clearly define it for yourself.

Harry Houdini: Real risk is what you don’t see

Known for his daring escapes, Harry Houdini’s other trick was stomaching a gut punch from the largest man in his crowd without even flinching. When a skinny college kid hit him while he wasn’t expecting it, however, it injured him in a way that eventually resulted in his death.

Housel’s lesson: how risky something is, depends on whether you are prepared for it or not.  

Our biggest economic risk is what no one is talking about because if no one is talking about it, then no one is prepared for it. If no one is prepared for it, the damage will be amplified when it arrives.

We spent all our time talking about Obama and Trump, but it was COVID that ended up being the real risk. Unforeseen events such as September 11 and Pearl Harbour made similar impacts.

Earthquakes: Everyone has a different view of the world

When people think about risk, they don’t do it in an analytical way – they do it in a cultural way.

Californians can’t predict when their next major earthquake will come, but they are always prepared for one. The state is constantly reminded of this risk by frequent small earthquakes, which makes it easier for voters to approve safeguarding measures.

People in the state of Washington face the same threat of a major earthquake. However, they experience smaller earthquakes at a much lower frequency than California. Without that persistent reminder of the bigger risk, Washington has proven to be much less proactive in safeguarding against it.

Housel’s lesson:  nothing is more persuasive than what you’ve experienced in your own life. We become prisoners to our own past and personal experiences.

In closing, people who make different decisions than you are not always crazy, they are merely acting on different experiences. Therefore, personal finance and financial planning is more personal than it is finance, and this is a significant factor to overcome, in making good choices in securing your financial future.

With thanks to Morgan Housel and the Moneta Group.

5 year service award
Congratulations to Larissa Khourie on achieving her 5 Year Service Award - presented to her by Lorraine Else. We wish Larissa many more years as a valued member of the Jurgens Insurance Brokers’ team.

Short Term News Update from Greg Brits

During the past few months’, there has been an increase in claims being submitted where the risk profile applicable to a client’s premises has changed.  In cases where such claims have not been met, they are largely due to changes having been made without our offices being notified.

As a valued client, and to offer you protection against non-payment of claims, we urge you to please contact our office with all changes made to your premises.

Below are a few areas of concern where vitally important information needs to be disclosed to your Insurer:

  • Moving or relocating to new premises, suburb, or migration to a different province. This will allow us to update your address accordingly and advise you if any additional requirements may be imposed by your Insurer.
  • Please inform our offices should the security at your premises change, or if you have disconnected your linked alarm to an armed response company.  Your policy is based on your risk profile and your security system is a crucial change which could lead to a possible rejection when submitting a claim.
  • We have also noticed changes to the occupation criteria of a residence in some instances.  For example, this could be converting part of the home into a Bed & Breakfast or Air B&B. This would definitely be considered a risk profile change and warrants disclosure to Insurers.  This would also apply to any form of business activities taking place from your residential premises as opposed to elsewhere.
  • Fire extinguishers play a vital role in risk management, and it is therefore extremely important to have this equipment serviced each year. Commercial and Business policies are subject to this condition, as well as personal residences that have thatch roofs or thatch Lapa’s.  

Please do not hesitate to contact us should you have any questions regarding the above, or the required advice we can provide should you be planning to run a business from home.