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Investment Strategy
Wednesday, April 1, 2009
Staying put

While some commentators are suggesting that local consumers are gloomy about economic prospects in 2009, Jeff Morgan-Hill, Head of Niche Investments, a division of Grant Thornton Capital, is more upbeat.

                “While the short-term economic view may be a little more reserved than last year, clients must keep their investment horizon firmly focused,” he says. “Unless something dramatic has happened to an investors’ circumstances, they would be well-advised to maintain their position.

                “The first step, of course, has to be a discussion with their accredited financial advisor. Making decisions on the thoughts from media commentators, friends, family or asset managers is ill-advised, to say the least.”

                Morgan-Hill says that the importance of trusting the financial advisor is paramount. “In most instances investors have trusted their advisors through the most recent bull markets, where mistakes and capital losses were less regular. The true test of an investment strategy is in these markets, where volatility is the name of the game and share prices are heavily discounted.

                “Financial advisors are generally well positioned to advise their clients. They are also less emotionally involved and can make rational decisions that are in the best interests of their clients.”

                Ideally investors would have portfolios that cater for different aspects of their lives. This could range from paying for school or university fees, for the kids in the short term, to saving to buy that luxury vehicle or overseas trip in a couple of years’ time.

                “The real point is that investors should stay focused and not be moved by short term blips or daily market movements,” says Morgan-Hill. “This is especially the case in the volatile markets we experienced during the second half of 2008.”

                Morgan-Hill says that investors should rather prevail with previously constructed financial plans and investment strategies - that’s unless their personal objectives have changed. These strategies incorporate portfolio selection and time horizons. He warned against making emotional and perhaps irrational switches into seemingly safer asset classes, such as cash and the money markets.

                “Rather, now is the time to take advantage of discounted prices in many sectors. I maintain that a well-constructed financial plan will prevail.”

Copyright © Insurance Times and Investments® Vol:22.4 1st April, 2009
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