Investment news for you
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
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.
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.
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.
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
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.
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.'