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
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.
'Let it go, let it go….' from Alan Botha
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:
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.
In your control:
Your financial planning and investment portfolio
Short Term News Update - Greg Brits
INSTALLING SOLAR PANELS
• 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.
• 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