Timing the market is less of a required art for fixed income. Fixed income investing necessitates long term planning typically with a buy-and-hold discipline. Interim price movement during the holding period of a bond held to maturity has no effect on its income. Current market conditions might not provide desired returns.
This condition is not permanent and does not imply that investors should completely deviate from their long term plan. Any opinions expressed may differ from opinions expressed by other departments of RJA, including our Equity Research Department, and are subject to change without notice. Neither the information nor any opinions expressed constitute a solicitation for the purchase or sale of any security referred to herein.
RJA may also have performed investment banking services for the issuers of such securities. Investors should discuss the risks inherent in bonds with their Raymond James Financial Advisor. Risks include, but are not limited to, changes in interest rates, liquidity, credit quality, volatility, and duration. Past performance is no assurance of future results.
Stocks are appropriate for investors who have a more aggressive investment objective, since they fluctuate in value and involve risks including the possible loss of capital. Dividends will fluctuate and are not guaranteed. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Guam Guam. Account Login. Forgot your password? Various reasons contribute to the sudden meltdown of market. For instance, at present, due to coronavirus pandemic, the Indian stock market is witnessing massive falls. The mutual fund investors worry about seeing their investment in negative value due to massive cut down in Net Asset Value within a short period.
In this situation, investors, especially those bearing a low-risk appetite, go for redemption or stop their regular SIPs. It is a common and natural behaviour among investors during such market turmoil. How far is this decision correct for the investors to stop further losses? Instead of turning to redemption or stopping the regular SIPs, it is advisable here to understand the implications of redeeming or discontinuing SIPs.
Redeeming your equity stocks when the market is low will only result in permanent losses. Equity mutual fund investments are for long-term. A few irregularities market volatility are very much a part of the journey. Therefore, during such times, it is advisable to stay calm and think of ways to deal with the situation. By sticking to your original investment plan, you give time to the market and your funds to recover.
When the market is low, it is always a good idea for an investor to take the SIP route. If you are systematically investing in mutual funds, consider paying SIP regularly and do not stop it midway. You will benefit with additional units. More the number of units you accumulate higher will be fund value when NAV rises in a high market.
Using the SIP route, you do not need to time the market. Whatever, the market conditions could be, high or low,you will be benefit in either case. The mutual funds follow the principle of rupee cost averaging. The number of units purchased depends on the existing Net Asset Value. An investor can purchase a high number of units at lower NAV if planned for a long-term investment. Suppose, if you have mutual fund units, costing Rs.
As a result of a sharp fall in the market, the present NAV is Rs. In this condition, you might sell the units to save further loss. Here, it is probable that you will lose Rs. On the other hand, keeping in mind the benefits of long-term investment, instead of selling, you can buy more units; say units costing Rs.
As you decided to sell the units at low NAV i. From the above table, you can see a total loss of Rs. Instead of selling, you opt for purchasing some more units, say units at Rs. Your total investment is Rs. Now, again when the market faces the bright side and the price per unit rise to Rs. From the above table, we can conclude that avoiding redemption during low market, holding the units and adding more to it provides additional benefits when the market recovers.
The market fluctuations will always be there for one or the other reason. The risk in the equity market is always higher but so are returns. Some might like to step out and re-enter the market later, but it might only result in hurting your capital. It is observed from past market history that whenever the market has fallen sharply, it has also provided a golden chance for the long-term investors to benefit them similar to the present situation using mutual fund SIP route.
A downturn in the market is not a reason for the redemption of mutual fund units or stop regular SIP. In other words, it can turn out to be a bad idea to redeem during a massive fall. Ideally, the mutual fund investors should give the scheme at least years to perform. However, there arise certain situations when redemption decision counts favourable. For instance, if your mutual fund schemes consistently happen to underperform its benchmark over years, you can take a closer look at schemes you invested in and move to other schemes, which show better performance.
Secondly, redemption option seems meaningful when you are close to achieving your financial goals within years in case of market crash. During a financial crisis, it is not feasible to time the market. Practically, if you think, it is not feasible to predict the behaviour of the market on any particular day. There is no calculated strategy to time the market and decide for the investors when to make investments.
During market disasters, investors often tend to behave like traders.
Listed on the Nigerian Stock Exchange since , Access Bank is a diversified financial institution which combines a strong retail customer franchise and digital platform with deep corporate banking expertise and proven risk management and capital management capabilities.
The Bank serves its various markets through four business segments: Retail, Business, Commercial and Corporate. As part of its continued growth strategy, Access Bank is focused on mainstreaming sustainable business practices into its operations. The Bank strives to deliver sustainable economic growth that is profitable, environmentally responsible and socially relevant, helping customers to access more and achieve their dreams. Its segment focus includes Commercial, SME, Private and Retail banking as well as the underbanked and financially excluded segments.
ACT serves a large spectrum of clients in both the public and private sector, at local and international level including: multinational and African companies, private financial institutions, financial development institutions, African governments, institutions and agencies but also non-profit organizations. Led by its founder, Ibrahima Cheikh Diong, who is well known for his passion for Africa?
ACT has a strong regional, on-the-ground, network that enhances its ability to serve clients through market intelligence, local and international contacts, due diligence, deal structuring, strategic partnership development and capacity building. Acuity Ventures : Acuity Ventures is a venture capital firm that invests in early to growth-stage technology companies in Africa.
Acuity leverages its partners? Acuity doesn? Acuity believes in smart decisions driven by data. Acumen : Acumen is changing the way the world tackles poverty by investing in companies, leaders and ideas. We invest patient capital in businesses whose products and services are enabling the poor to transform their lives. We are also developing a global community of emerging leaders with the knowledge, skills and determination to create a more inclusive world.
In , Acumen was named one of Fast Company? Learn more atwww. Advance Global Capital Ltd. AGC work with investors who want both risk-adjusted market-rate returns and measurable, positive impact that aligns with their values. Our flagship fund puts capital to work in underserved communities worldwide and deliver tailored financing to partners, and flexible working capital solutions to SMEs so they can grow and continue to positively impacting their local economies. In , AGC was selected as one of 50 impact investment fund managers recognised in the ImpactAssets 50 database; this award recognises outstanding impact investment funds with a demonstrated positive social, environmental and financial impact.
Adventis International : Adventis International is an Africa focused investment firm managing and innovating a range of both Africa debt and equity products. Our team has many years of experience including development of over 1, MW of now operating wind and solar projects in North America.
AEDC continues to develop large sites in Kenya. AEDC also helps commercial and industrial customers in Kenya by offering a cheaper and more reliable source of power and allowing customers to better manage and control their biggest business expense. We are a complete solution provider, offering our customers fully financed options to best suit their business operations, including solar, other renewable technologies, storage and efficiency retrofits.
Africa Finance Corporation : Africa Finance Corporation AFC , is an investment-grade multilateral finance institution established in through a Treaty among several sovereign African states, to be the catalyst for private-sector-led infrastructure investment across Africa. AFC invests in high quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport and telecommunications.
Simply put, we are obsessively focused on helping private companies expand, be more efficient, modernize, attract capital, and otherwise grow. On the consulting side, we work with both foreign and local companies. We assist multinationals interested in entering East Africa, and help them understand the operating environment and where they fit in. Our work runs the gamut, from feasibility studies and competitive assessments, to market analysis, regulatory overviews, and strategic entry planning.
Given a complex and difficult operating environment, we provide the local knowledge to cut costs, clear hurdles, and make a launch in East Africa as easy as possible. For local companies, we offer a host of change management services designed to make stronger companies, and turn a first mover advantage into a competitive advantage. We work to help businesses modernize and adopt international and industry best practices, diversify into new lines of business, develop turn-around strategies, and improve efficiency.
Finally, in the investment side, we help local companies secure capital debt and equity from international financiers. Our role is dictated by the client, and can be as all encompassing as managing the whole process- from document creation to due diligence and deal close; to simply linking clients with potential investors.
Many of our clients are either in the early stages of their business, going through challenging financial times, or require a longer term investment horizon than the typical year PE fund window. We have the team, experience and capability to provide critical value added solutions and insights to the private sector in East Africa. In addition to his investing role, Mr. Mutooni heads the coverage of Kuramo?
He is based in New York. Prior to Kuramo, Mr. During his 11 year tenure, Mr. Mutooni served as GEAM? ALC Titrisation has realized the very first securitization transaction in the West African Economic and Monetary Union, and has launched four 4 securitization funds. The company aims to contribute to the rise the securitization market in order to support the achievement of the social and economic development of our countries.
Africa Merchant Capital : The Africa Merchant Capital Group is a privately owned boutique merchant bank, providing corporate finance advisory, trade finance and asset finance solutions for mid-market businesses active in Sub-Saharan Africa. AMC fills a finance gap in the African private capital markets which is too small and insignificant for global financial institutions and too substantial to be funded by the local finance providers.
The team draws from multi-disciplinary professional experience including corporate finance, merchant banking, investment management, consulting, advisory and personal investment in the region. AfricaDev Consulting Ltd : AfricaDev Consulting is a firm dedicated to support financial institutions, family-owned businesses, established companies and multinational corporations in their African expansion success.
Leveraging on a deep understanding of local markets, political frameworks and business culture, as well as an extensive network and expertise in complex problem-solving, AfricaDev Consulting is founded to play a key role in helping companies to grow in Africa. Our services comprise business development, financial advisory and strategy consulting.
More info here: www. African Development Bank : The African Development Bank is a multilateral development bank and the premier financial development institution in Africa The AfDB is made up of 54 regional member countries African countries and 26 non-regional members. The African Development Bank has proven expertise in human and economic development in Africa, with extensive experience in the development of the financial sector.
The Bank operates across five priority areas that has been identified as essential in transforming the lives of the African people, and referred to as the High 5s: -Light up and Power Africa; -Feed Africa; -Industrialize Africa; -Integrate Africa; and -Improve the Quality of Life for the People of Africa.
African Reinsurance Corporation : African Reinsurance Corporation Africa Re is the leading pan-African reinsurance company and the largest reinsurer in Africa in terms of net reinsurance written premiums. Africa Re was set up by 36 African states in , following a recommendation by the African Development Bank AfDB , with the mission of developing the insurance and reinsurance industry in Africa through increased underwriting and retention capacities, and support to African economic development.
Its shareholders? Best Company since and A? ATI is also uniquely able to insure both equity and debt transactions and ATI has both a commercial mandate to be profitable and development mandate to ensure our transactions create positive development impact. This growth is supported by strong partnerships with international reinsurers, banks and African governments. These types of deals are attracting significant global attention. For more information: www. AfrAsia Bank Limited helps clients achieve their financial aspirations, and our services are always swiftly delivered.
AfricInvest funds have dedicated teams covering the African continent and France for growth capital and LBO transactions related to small, mid and large caps companies, financial sector institutions and VC. AfricInvest relies on a team of 75 highly skilled investment professionals, representing 15 nationalities, operating out of ten offices in Abidjan, Algiers, Cairo, Casablanca, Dubai, Lagos, Nairobi, Paris and Port Louis, Tunis and soon Johannesburg. For more information, please visit www.
Its focus is on lending to successful African SMEs in need of funding for growth or expansion, primarily as a senior secured offshore lender. It will structure financial offerings with tenors adapted to the cash generation capabilities of the SME. AfricInvest Private Credit has management, staff and credit committee members that are independent from AfricInvest Group?
Understanding that medium-sized African businesses typically have different collateral to offer than their larger counterparts, AfricInvest Private Credit will work with them on a flexible basis to ensure that deserving borrowers have access to appropriate debt financing.
Afrinet Capital : Afrinet Capital is a venture capital firm that invests in bold, early stage entrepreneurs who provide solutions that solve fundamental structure issues leading to high growth potential by inventive dedicated tangible ideas and products.
AgDevCo provides long-term capital risk and seasonal working capital and can also offer matching funding to commercial businesses to support the development of their smallholder farmer programme. AgDevCo supports its investees both at an operational and strategic level, giving them practical, day-to-day commercial and agronomic advice, tailored to their needs and business model. Agility : Agility is a leading global funder and developer of logistics real estate with a current portfolio of over 21 million m2 of warehouse parks around the world.
Across Africa, Agility is funding and developing a network of international-standard warehouse parks providing reliable logistics infrastructure in a secure environment with consistent power and IT connectivity. Agility warehouse parks offer ready to move-in standard units from m2 upwards as well as built to suit solutions to meet specific customer requirements.
Customers are a mix of local medium size enterprises and multi nationals using Agility warehouses for storage, distribution, packaging, processing and light manufacturing. Agility warehouse parks also include open storage facilities and secure vehicle parks. Albatros Energy Mali S. The 90 MW thermal power plant achieved Financial Closing in and is considered a milestone project in Mali. The total Project Cost is around mill. Euros and it has been completed in 16 months in budget and slightly ahead of schedule.
For further information see also: www. Allianz is present in Africa since Recently Allianz Group also launched a dedicated investment stragy to increase its exposure to African assets, and Allianz Global Investors AGI launched a fund-of-fund seeking Private Equity investments on the African continent.
The company provides a range of service offerings including mergers and acquisitions, fundraising, debt restructuring, etc. Our experience cuts across various sectors such as financial services, technology, infrastructure, oil and gas, public sector, etc.
We typically serve mid to large corporates but are in the process of developing an SME focused offering. Alpha Direct Insurance Co. The company has an in-house software development and data analytics team and is putting together a world-class product engineering and deployment team in line with its vision. The company is backed by a group of Seed-stage investors consisting of leading entrepreneurs from the United States and Africa, who have built billion dollar businesses in the insurance, manufacturing and retail spaces.
Alpha Morgan Capital Managers Limited is a fast growing financial services and solutions provider. We do this through providing business facilitation services, including business appointments, trade missions, and market research; Introducing businesses to potential investors and investors to businesses and providing updates on the Malagasy business environment.
AMIC focuses on building a diverse strategic portfolio via its top-notch management team. AMIC continuously strives to unlock new levels of growth and shareholders value through Guidance, Close Monitoring, and Follow up with management teams to ensure higher efficiency and greater returns of portfolio companies, capitalizing on its past experience, knowledge and networks to invest in market-leading companies with strong growth potentials.
Angaza Capital : Angaza Capital is a global impact investment and development firm with presence in Kigali, London, the UAE and Tel-Aviv, aiming to support Africa in fulfilling its high potential to shape a more sustainable future with local entrepreneurship, smart capital and innovation leading the way.
The company manage the Rwanda Innovation Fund, investing in local and international innovative technology-enabled sectors and companies which demonstrate the potential to solve Africa? The fund focus on a selection of high growth generative tech-enabled sectors: Agri-tech and inclusive Fin-tech at its core, as well as Clean Energy and Smart Logistics, leverages partnerships with the Government of Rwanda and Abu Dhabi Global Market and backed by strong local and international partners and investors.
Angaza Capital is part of the building of Africa? It is at the forefront of the Smart Africa vision, where technologies and leadership are supporting the continent in leapfrogging to a new paradigm of sustainable growth and a more inclusive future. Anthemis : Anthemis is a leading global venture investment firm focused on fintech. We invest in and build early stage fintech companies that we believe will transform the financial services industry for the Information Age.
We offer strategic benefits for LPs in addition to generating compelling risk adjusted returns. Apis Partners core investment team comprises of 14 investment professionals based in London and Lagos with specialised expertise in financial services in growth markets. Apis Partners? Apis Partners is conscious of the developmental impact that growth capital can achieve in our markets, and as such, consider financial inclusion a core tenet of our mandate.
Apollo Agriculture : Apollo Agriculture is an agricultural fintech company that helps small-scale farmers maximize their profits. Apollo uses machine learning, remote imaging via satellite, and mobile money to provide proven agricultural tools and financing to farmers in a low-cost and highly-scalable way. By reducing the cost and complexity of reaching and lending to small-scale farmers, Apollo is making productive, profitable farming possible for even the most remote of Africa?
By bridging the gap between traditional financial infrastructure and distributed ledger technology, we create an efficient, flexible, transparent, and compliant ecosystem allowing innovators to build solutions for the future. As our system will reduce the cost of transferring money to near zero, we work actively to promote financial inclusion with an inclusive community-based approach for solving SDG Africa is our key market and we are already now working on use cases in Kenya amongst other countries.
We have strategically partnered some of the largest Telcos, Retailers, Super APPs and other institutions in Africa for distribution and speed to scale. The main focus has been on growth and buy-out opportunities across diverse sectors of the economy. Auerbach Grayson : We are a U. We began covering Africa in and we partner with local stock broking firms in 25 countries in Africa. The firm originally began assisting clients as a full-service law firm operating through its various offices in Africa and Europe with an integrated team of more than 40 lawyers.
AVM Advogados has grown from a Luanda-based law firm into a truly international practice. Through our offices we advise clients on all aspects of international and national transactions and litigation. Our multidisciplinary team allows us to anticipate trends and respond in a streamlined manner to complex business and legal issues.
We also provide legal services to leading investment banks, insurance companies, other financial institutions, private entities and government agencies. The goal is to provide access to finance to the more than million people in rural Sub-Saharan Africa who are currently left behind and excluded from accessing finance to improve their businesses and invest in their communities. Since going live with its product in late , awamo is already working with over MFIs, reaching more than thousand consumers.
C is the pioneer private Bank in Ethiopia after the political reform and the Economic policy change that followed. Named after the nurturing river Awash in Ethiopia, Awash Bank has been in business for the last 25 years with remarkable growth and excellent customer service. Awash Bank is the leading private bank in the country in all parameters and has set a vision to be one the top ten private banks in East Africa by The new Organic Law institutionalizes the BNA, as the Central Bank of a two-tier banking system, established as a monetary authority, an agent of the foreign exchange authority and separate from commercial functions, while the Law of Financial Institutions regulated the exercise of credit functions.
Barak Fund Management Ltd : Barak seeks to generate equity-like returns in a capital-constrained market with relatively low volatility and limited correlation to the broader markets. Our strategy focuses on fully-funded or blended debt in the African commodity markets, using asset-backed loans with various forms of collateral. Portfolio Managers manage USD liquidity with respect to investor subscriptions.
An integrated team of 19 seasoned portfolio managers, analysts and traders analyses the sovereign debt of over 75 countries and the corporate debt of over companies. BeneFactors ltd : BeneFactors is a Rwandan factoring fintech. We focus on SMEs and have developed an innovative risk assessment process to be able to work with clients who do not have fixed assets nor good company-level data for collateral but engage in stable value chains.
We are a team of 10 people, buying invoices worth quarter of a million USD per month. Ventures : Beta. Ventures invests in driven, early-stage entrepreneurs scaling tech and tech-enabled startups to become market leaders in African. Founded in Luanda in As a leading innovator in domestic capital markets investing, it services retail, institutional and high net worth investors with an unmatched breadth and depth of fixed income and private equity solutions.
The firm is a member of ALN. ALN is an extensive alliance of Africa? ALN firms are recognized as leading firms in their jurisdictions by the international legal directories and many have advised on ground breaking, first-of-a-kind deals in their markets.
ALN is the largest grouping of its kind in Africa, with close working relationships across its sixteen members and an established network of Best Friends across the continent. BIO — Belgian Investment Company for Developing Countries : BIO supports private sector growth in developing and emerging countries by funding financial institutions, enterprises and infrastructure projects that are privately held. With equity capital of close to 1 bn euros, BIO provides tailored long-term financial products directly or through intermediaries.
For clients, BIO also provides subsidies for technical assistance programs as well as feasibility studies to enhance business performance and strengthen the impact on sustainable development. BIO supports projects with a balance between return on investment and development impact. BlueOrchard Finance : BlueOrchard is a leading global impact investment manager.
BlueOrchard was founded in by initiative of the UN as the first commercial manager of microfinance debt investments worldwide. We offer premium investment solutions to qualified investors and provide debt and equity financing to institutions in emerging and frontier markets. BlueOrchard has invested more than USD 6 billion in over institutions across 80 countries.
As Trustees, we carry on the specialized business of trust services including Private and Public Trust, Employment Retirement Benefits, Trust Fund Management for both private and corporate bodies, Estate Administration under trust, Executorships among others. In fact, we were the second trustees to be established in Nigeria. Our ability to render efficient and professional services is centred on highly skilled and experienced manpower with high degree of integrity and dedication to duty.
At the heart of this work has been helping these firms raise the funding required for the establishment or expansion of their factory. Bonergies objective is to empower Small and medium sized Businesses, Small Holder Farmers, Cooperatives, Women Groups and families in non-electrified rural areas by giving them access to Solar energy for productive use to generate revenues like Solar water Pumps, Solar Refrigerators, Solar Fruit Dryers, Modular Solar Home systems and Lighting systems.
Bonergie is setting up a Last-Mile-Distribution Network with already existing 5 regional offices and 8 Solar Boutiques in non-electrified villages. Bonergie exists since and served more than customers. Bowmans Tanzania : Bowmans Tanzania is a leading Tanzanian law firm. Established in January with an experienced team of lawyers, Bowmans Tanzania has quickly risen to be a top-ranked law firm in Tanzania, including being only one of three Tanzanian law firms ranked?
Tier One? The Bowmans Tanzania team comprises leading corporate and commercial lawyers and dispute resolution experts with extensive experience in proactively managing risks and offering commercial solutions to the challenges faced by our clients in the context of financings, mergers and acquisitions, joint ventures, capital markets transactions and commercial ventures, among other areas.
The firm? Bowmans Tanzania? Bowmans Tanzania is the Tanzanian office of Bowmans, a leading African law firm with eight offices in six African countries, including Kenya, Mauritius, South Africa, Tanzania, Uganda and an associated office in Ethiopia. With over specialised lawyers, and a track record of providing specialist legal services, both domestic and cross-border, spanning over a century, Bowmans is differentiated by our independence and the quality of legal services that we provide.
Bowmans comprises legal specialists with unique African knowledge and a vision is to be acknowledged as the pre-eminent law firm in Africa for corporate, institutional and public sector clients? We draw on our unique knowledge of the African business environment and in-depth understanding of the socio-political climate to advise clients on a wide range of legal issues.
Our aim is to assist our clients in achieving their objectives as smoothly and efficiently as possible while minimising the legal and regulatory risks. Bowmans was ranked first by deal value in Mergermarket? Branch International : Branch is a machine-learning provider of mobile financial services to emerging markets with the purpose of unlocking financial access to billions of underserved people around the world.
Unlike traditional institutions, Branch gives people an opportunity to build credit despite limited banking history by assessing creditworthiness based on the data captured from customers? Bridge believes every child has the right to high-quality education and works in partnership with governments, communities, parents, and teachers to ensure access to quality education.
Bridge uses in-depth teacher training and support, advanced lesson plans and wireless technology to provide pupils with a meaningful and life-changing education. It runs or supports over 1, schools and has educated , children. Bridge has delivered significant learning gains in all markets that it operates in and is a proud SDG4 partner.
Globally, there is an education crisis. Around million children are either not in school at all, or in school and not learning. Bridge is committed to helping tackle this through a data driven, evidence based approach that delivers strong schools and a great education for all. In ours subsidiaries, we focus on SMEs financing. It is a relatively profitable niche despite of this sector risks. Not only do our products save money, fuel and natural resources, but they also dramatically reduce harmful indoor smoke emissions which can cause significant health problems, even death.
Caban Capital Corporate Advisory : Caban Capital has extensive experience in the Financial Services sector, from fund administration to the introduction of unique investment products. We have more than years combined experience in the Financial Services Industry, primarily in the assistance of the development of small- and medium-sized businesses. It is our express belief that organisations can generate profits whilst having a positive impact on the environment and at the same time, uplifting people.
We advise our clients on all aspects of the transaction from conception through to completion. Our ability to complete transactions is enhanced by our strong relationships within the merchant banking, private equity, alternative finance and venture capital sector. Calvert Impact Capital : Calvert Impact Capital invests to create a more equitable and sustainable world.
Through our products and services, we raise capital from individual and institutional investors to finance intermediaries and funds that are investing in communities left out of traditional capital markets. Calvert Impact Capital also offers loan syndications, where we originate, structure and administer loans for institutional and accredited lenders seeking environmental and social impact. Carbon Holdings : Carbon Holdings is a privately owned, Egyptian petrochemicals company which was established in The company was founded by Mr.
Carbon Holdings develops and acquires midstream and downstream petrochemicals and process industrial plants. The company is the principal shareholder and sponsor of several projects in the industrial zone in the Northwest Gulf of Suez, Egypt and in other strategic markets around the world. Carbon Holdings shall continue to build upon our successes in Egypt.
We offer a range of carefully designed products and tailor-made solutions, staying focussed on our core competencies. Using our analytical skills we find opportunities in listed fixed income and equities. We look for value in companies that have an edge in their relevant markets and with strong management to capitalise on their competitive advantage.
We offer local equity, money market and flexible income unit trusts. Non-core services are outsourced to allow our team to focus on the task at hand — managing your money. However, we do not invest in real estate, primary agriculture or extractive industries.
Catalyst Fund managed by BFA : Catalyst Fund is a startup accelerator that helps fintech innovators create and deliver accessible, affordable and appropriate products for the underserved. Catalyst Fund operates in five key markets: Kenya, Nigeria, South African, Mexico and India, and has accelerated 25 fintech startups to date.
Catalyst Fund is managed by BFA, a consulting firm that works at the frontiers of finance, data, and technology to craft efficient solutions that enable individuals, organizations, and communities to address vulnerabilities and prosper. In addition to accelerating startups, Catalyst Fund develops innovation ecosystems in emerging markets by bringing together investors, banks, market builders, and regulators, and sharing in-depth knowledge and tools developed while working directly with frontline innovators.
CDC has a mandate to make direct investments in both debt and equity. At CHANGE Global Investment, we manage public equity strategies which deploy a long-term investment approach focused on uncovering significant pricing inefficiencies in the emerging and frontier markets. Our clients consist of investment consulting firms, pension funds, charitable foundations, and family offices.
All of our investment professionals were born and raised in the developing world, and as such have witnessed the opportunity of CHANGE firsthand. We have personally experienced how the opening of markets unleashed the human spirit. We have a fluent understanding of the cultural aspects of investing in the emerging and frontier markets. Our personal backgrounds empower our investment philosophy and process to discover strong investment ideas before the competition.
It is our responsibility to strive to achieve maximum investment returns at minimum capital risk, while promoting advancement. We apply this goal to the firm and to our investment efforts. The Group employs approx. Clarmondial : Clarmondial is an investment advisory firm headquartered in Switzerland.
Clarmondial is supported by colleagues in West, East and Southern Africa. Clarmondial is developing several investment strategies focused on Africa, starting with the Food Securities Fund — this is an innovative blended finance fund for agricultural value chains focused on sub Saharan Africa. The company is also working with leading corporates on supporting investments related to sustainable sourcing, including products from Nigeria, DRC, Uganda, Ghana, and Madagascar. Additionally, Clarmondial has active mandates to explore new funding mechanisms in Africa focused on financing the transition to sustainable fisheries and on the circular economy.
Colonial Consulting : Colonial Consulting is an investment consultancy to leading foundations and endowments. The Bank is the first organization in the Middle East to be the focus of a case study conducted by one of the top five business schools worldwide; the London Business School. CIB is the first company in the Arab world and Africa to be listed on the index, which includes companies from 36 countries across ten sectors. During April , CIB established its commercial representative office in Addis Ababa, Ethiopia with the aim to strengthen the relationships with Ethiopian banks, promote Egyptian exports and gain market insights.
Its aim is to be the first point of strategic support for any UK-based company wishing to invest in the DRC. The Chamber is focused on attracting qualitative investments that will benefit not only the investors high returns on investment and the local population in the DRC positive social impact, job creation, etc.
It stimulates the investments necessary to contribute to the development of the DRC. It is not Amazon nor Fedex, but a custom mobile solution designed specifically for the African middle market. The advent of mobile technologies is the game changer, enabling Copia to provide a profitable, high quality service to this market for the first time in history.
The Company is ready for expansion across Africa and is raising a Series D. With subsidiaries in Consulting, Securities trading, Real estate and Funds management; Cowry Asset has evolved into a financial supermarket.
Cradle Gold Group : Cradle Gold is the second largest independent junior gold mining company in the world when measured by compliant resources. Cradle Gold anticipates declaring new maiden resources in excess of 10 million ounces above 1, meters below surface on its current Witwatersrand assets. Cradle Gold is currently evaluating a number of acquisition opportunities which will significantly expand both our open pit and shallow underground resources. Over the years, CRDB Bank has grown to become the most innovative and preferred financial services partner in the region.
Supported by a robust portfolio and uniquely tailored products, CRDB Bank remains the most responsive bank in the region. Cristal Advocates : We are a corporate and commercial law firm offering full scale legal services but with an emphasis on tax, energy, infrastructure and business support. We have a multi-disciplinary team of lawyers, accountants and other professionals with local, regional and global exposure enabling us to provide total business solutions through integrated service offerings.
Our team offers cutting edge creative solutions to modern day business challenges in a timely manner and with the highest levels of professionalism. Our customer-centric philosophy is hinged on being a reliable service provider offering efficient and commercially viable solutions in our areas of practice.
Crown Agents Bank : Crown Agents Bank reduces the cost and friction associated with moving money to, from and across developing, emerging and frontier markets, with trusted access even in territories with unique challenges. It is the partner of choice for many governments, development organisations, banks and non-bank financial institutions that aim to support or do business with some of the fastest growing economies in the world, with a particular focus on Sub Saharan Africa.
The bank currently supports over currency pairings with a growing list of accessible currencies including 49 from across Sub Saharan and Northern Africa. CAIM works with central banks, sovereign funds, pension funds and other investment funds in some of the world? CAIM seek to truly understand its clients? This long history of commitment to excellence means it has an extensive network of global partners and the expertise to deliver efficient, scalable services.
Dahabshil Bank International : Dahabshil bank is a leading shariah compliant bank in the horn of africa offering comprehensive banking and financial services solutions to a wide spectrum of private and business clientele. We provide them with long-term financing and promotional programmes, and advise them as they implement their investments.
They can thus develop successfully and sustainably, while generating local added value and creating qualified jobs. As a development finance institution, we deliberately enter difficult markets as well, and promote private sector expansion there. We provide companies with long-term investment capital in the form of loans or equity, which is often difficult to obtain in developing countries.
We advise and accompany our customers continuously to help them design their investment and company professionally, efficiently and sustainably. Established in , the DBSA promotes economic and social development, growth and regional integration through infrastructure finance and development. The DBSA plays a catalytic role in delivering infrastructure in the energy, transport, water and telecommunications sectors, with a secondary focus on health and education.
It operates across the infrastructure value chain from planning, preparation, and financing to implementation, delivery and maintenance. The DBSA? Its mission is to support economic growth through investment in economic infrastructure and improve the quality of life for all, through the development of social infrastructure.
In DFID we seek to work in partnership with African nations to better support both peace and global prosperity. Double Kingdom : Double Kingdom is an infrastructure developer, operator and logistics services company focused on West Africa. ADP I? ADP II? Our funds invest across Africa in companies benefiting from demand created by the fast-growing middle classes.
We are long term investors, and look to partner with management and entrepreneurs to create value. We believe there is a strong correlation between ESG and high returns. We assist our portfolio companies to implement high standards of environmental, social and governance practices to create value and drive sustainable economic development. Duet Group : Duet Group is a leading London based asset manager with an expertise in investing in African public and private markets.
Being one of the fastest growing Banks in the Micro Finance industry that is constantly and rapidly evolving, we are proud to inform you of our achievement recorded within this short space of time. We have managed to establish ourselves and claimed our rightful place amongst the comity of Banks in Nigeria.
We are determined to be second to none in bringing first class facilities and products to our customers and clients alike as envisioned in the Bank roadmap and strategy. We use this occasion to celebrate this milestone recorded which has given us a golden ticket and opportunity to momentarily look back at our achievement recorded and chart the path forward as we enter into the next phase. The Bank was birthed with the vision and purpose of:?
Providing diversified, affordable and dependable financial services to the active poor in a timely and a competitive manner. Mobilizing savings for intermediation,? Creating employment opportunities,? Increasing the productivity of poor people and provide veritable avenue for the administration of the micro credit program of government and high net worth individuals. The story of the Bank in many aspect has changed the face of micro financing in Delta state and Nigeria as a whole.
All branches are fully approved by CBN. EcoPlanet Bamboo : EcoPlanet Bamboo Group, LLC is an experienced owner-operator of bamboo farms globally, and has pioneered the industrialization of bamboo as a sustainable, alternative fiber. Beginning operations in in Central America, EcoPlanet expanded into Africa, and has since developed a diverse portfolio of operations across Southern, West and East Africa.
In addition to bamboo farms and plantations, EcoPlanet Bamboo has invested heavily into the development of innovative and clean manufacturing technology for the conversion of bamboo pulp and paper products, and is working within both domestic and global industries for packaging, sanitary paper and textiles.
Efarms : Efarms is an agricultural focused fintech company that leverages technology and relationships to source investments that are channeled into agricultural production and commodity trading, so as to unlock fiance and markets for smallholder farmers. We believe that we can transform Africa into the hub that feeds the world, one value chain at a time.
You can find out more about us by visiting www. All shareholders are national. We offer advisory and general and life insurance brokerage services. We operate in a market of a hundred insurance intermediairies. Our vision is to be among the top 10 of the Insurance Brokerage firms in Cameroon by and to enter to partnerships with foreign Insurance Brokerage Firms. Ethics and Excellence are our key values. Eman Capital Microfinance Limited : Eman Capital Microfince is an indigenous company providing financial services to the low income earners.
With three shareholders and an equity of about one million Ghana Cedis, we have managed to provide affordable financial services to over 20, clients over the past 10 years in Kumasi and other parts of Ghana. We offer deposits, loans , investments and business advisory services to our cherished clients.
We pick up the pieces from where the main Banks has left of and put them together to make a business sense. The company currently has five Board members with varied levels of relevant qualifications. Recently, the Bank of Ghana undertook a clean up exercise of the Banking sector and we are proud to announce that, Eman Capital was among the few banking institutions that survived the exercised. Our systems and controls are strong enough to protect our depositors and investors.
It works across 8 sectors, including energy, oil and gas transportation, telecommunications, transport and water, providing principally senior debt products. Empower New Energy: Empower New Energy Empower is an award-winning renewable energy investment company investing in small and medium-sized renewable energy projects across Africa.
Empower aims to deliver development-focused, high-impact distributed renewable energy into its target countries. Empower applies know-how and investment capital to quality projects that are otherwise too small to attract international finance, and manages assets and risks through a portfolio of investments. EquaLife Capital : EquaLife Capital is the first venture debt investment fund in Eastern Africa providing working capital, asset financing, and bridge financing to start-ups, growth stage companies, and SMEs operating in East Africa.
On-going strategic, operational, and finance support is provided to each investee to add tangible value to the growth and profitability of each Company. Equator is currently investing in Africa from ShoreCap III, and looks at opportunities to partner with forward looking management teams all over the continent. One of the Big 4s. Ethiopia Investment Commission : EIC is a govenment organization manly for promoting investors from abrod to invest in the country and to facilitates investors related issues.
Eurizon specialises in asset management, offering products to retail clients mutual funds and managed accounts as well as to institutional clients, to whom its provides a wide range of tailored investment products and services. Its product range includes specialized funds featuring different management styles and investment strategies. Eurizon has cross-border activity in 25 countries and 8 global management centers.
The EIB is the biggest multilateral financial institution in the world and one of the largest providers of climate finance. The EIB invests in a wide range of projects in Africa from providing the financial support to allow microfinance institutions to lend small amounts to microenterprises and innovators, up to large infrastructure projects.
EY : EY is a global consulting firm that provides assurance, tax, advisory and transaction advisory services to its numerous clients across the world. Feather Invest : Feather Invest is an investment firm focused on industrial turnarounds. With its deep and well proved industrial operational experience rooted in the firm? Finaltus : Finaltus is a Licensed Investment and Transaction Advisory Firm, based in Nairobi with a wide range of experience in multiple African countries.
The Firm have handled assignments from clients ranging from National governments, commercial enterprises, Impact Funds and Family offices. Finance in Motion : About the eco. By providing financing for business practices that conserve nature and foster biodiversity, the fund seeks investments with both environmental and financial returns.
An impact investment fund advised by Finance in Motion, the eco. Along with the sub-Fund for investment, is a development facility that provide high-impact technical assistance to investment partners and final borrowers. About Finance in Motion Finance in Motion is one of the world? Focusing exclusively on development finance, we have mobilized over EUR 4 billion for positive change in low and middle-income countries over the course of our operations.
Finnfund : Finnfund is a Finnish development financier and professional impact investor. We build a sustainable world by investing in responsible and profitable businesses in developing countries. Each year we invest — million euros in projects, emphasising renewable energy, sustainable forestry, sustainable agriculture and financial institutions.
The company has about 90 employees. Finogee Financial : — A Boutique investment banking firm specializing in mergers and acquisitions FX markets Trade finance advisory International loan syndications and Equity infusion. Having successfully transformed to a retail and commercial banking-led group, FCMB expects to continue to distinguish itself by delivering exceptional services, while enhancing the growth and achievement of the personal and business aspirations of our customers.
Fitch Ratings: Fitch Ratings is a leading provider of credit ratings, commentary and research. Dedicated to providing value beyond the rating through independent and prospective credit opinions, Fitch Ratings offers global perspectives shaped by strong local market experience and credit market expertise.
The additional context, perspective and insights we provide has helped investors fund a century of growth and make important credit judgments with confidence. At FleetPartners, we are interested in not only providing you with vehicles, but also managing them professionally and efficiently. Our services are split into three broad categories: Vehicle leasings, Fleet management and Fleet technology.
With our years of experience, distinct professionalism and technical expertise, we lease out vehicles at the most convenient means of payment through uniquely designed leasing options and solutions to meet your fleet and financial needs. When we came into the market, we saw a huge gap in the industry, Lessors were experiencing huge losses when the lessee defaults in a lease transaction, and assets are consequently recovered.
This makes it difficult for the lessor to liquidate the asset at his book value and recover his investment, thus running at a loss. We created a solution to monitor the usage of the assets through direct mileage readings, to match the usage of the asset with its corresponding tenure. This helps in preserving the value of the asset throughout the tenure of the contract.
Another lapse we identified in the industry was the lack of flexibility in leasing. We observed that lessors adopted the conventional monthly fixed rental system due to inadequate technology to monitor vehicle usage per kilometer and so could not accurately charge per kilometer.
Thus, we created a solution that tracks cost per kilometer, thereby allowing for more flexibility. FleetPartners revolutionized the leasing industry with our cutting-edge fleet management technology. Our remarkable success in the leasing business resulted in a strategy that allows us pay attention to every detail in the business. It also involved using the best technology that got every detail from the vehicle, thereby fully automating all processes.
With a unique marketing and branding strategy, we introduced a new trend in the industry as the first leasing company to aggressively project our brand and create significant visibility online and offline. This strategy replaced the traditional contact-based approach of marketing. At FleetPartners, we constantly strive to come up with better solutions to improve the vehicle leasing and fleet management needs for businesses and individuals in Nigeria. This has earned us awards in different categories in the past, among some of the awards are the Global Banking and Finance Review Awards for Best Leasing company in Nigeria presented in London, the International Finance Magazine?
With a total of 7. Flourish : About Omidyar Network: Omidyar Network is a philanthropic investment firm dedicated to harnessing the power of markets to create opportunity for people to improve their lives. Established in by eBay founder Pierre Omidyar and his wife Pam, the organization invests in and helps scale innovative organizations to catalyze economic and social change.
You can learn more here: www. To date end of the first quarter of , Omidyar Network has made investments in 88 for-profit companies and nonprofit organizations in the financial inclusion space:? It is our mission to empower entrepreneurs to build a better world. Our role extends beyond financing, as we help businesses to operate and grow transparently in an environmentally and socially responsible manner.
With our clients serving millions of customers, their adoption of good practices will have a broad positive impact on local development. They create jobs, provide people with an income, generate taxes and contribute to a healthy private sector. This makes it possible to build a local economy that offers opportunities for people today without compromising the opportunities of future generations.
Through our approach, we aim to demonstrate to other investors that strong financial returns and positive impact in developing countries and emerging markets can go hand-in-hand. Our success in higher-risk markets provides them with the confidence to get on board, allowing us to mobilize more funding for our clients. If you are systematically investing in mutual funds, consider paying SIP regularly and do not stop it midway. You will benefit with additional units. More the number of units you accumulate higher will be fund value when NAV rises in a high market.
Using the SIP route, you do not need to time the market. Whatever, the market conditions could be, high or low,you will be benefit in either case. The mutual funds follow the principle of rupee cost averaging. The number of units purchased depends on the existing Net Asset Value.
An investor can purchase a high number of units at lower NAV if planned for a long-term investment. Suppose, if you have mutual fund units, costing Rs. As a result of a sharp fall in the market, the present NAV is Rs. In this condition, you might sell the units to save further loss. Here, it is probable that you will lose Rs. On the other hand, keeping in mind the benefits of long-term investment, instead of selling, you can buy more units; say units costing Rs. As you decided to sell the units at low NAV i.
From the above table, you can see a total loss of Rs. Instead of selling, you opt for purchasing some more units, say units at Rs. Your total investment is Rs. Now, again when the market faces the bright side and the price per unit rise to Rs. From the above table, we can conclude that avoiding redemption during low market, holding the units and adding more to it provides additional benefits when the market recovers. The market fluctuations will always be there for one or the other reason.
The risk in the equity market is always higher but so are returns. Some might like to step out and re-enter the market later, but it might only result in hurting your capital. It is observed from past market history that whenever the market has fallen sharply, it has also provided a golden chance for the long-term investors to benefit them similar to the present situation using mutual fund SIP route.
A downturn in the market is not a reason for the redemption of mutual fund units or stop regular SIP. In other words, it can turn out to be a bad idea to redeem during a massive fall. Ideally, the mutual fund investors should give the scheme at least years to perform. However, there arise certain situations when redemption decision counts favourable. For instance, if your mutual fund schemes consistently happen to underperform its benchmark over years, you can take a closer look at schemes you invested in and move to other schemes, which show better performance.
Secondly, redemption option seems meaningful when you are close to achieving your financial goals within years in case of market crash. During a financial crisis, it is not feasible to time the market. Practically, if you think, it is not feasible to predict the behaviour of the market on any particular day. There is no calculated strategy to time the market and decide for the investors when to make investments. During market disasters, investors often tend to behave like traders.
The fall in NAV of funds spread fear among the investors. It is always a good idea for mutual fund investors to stay focused on their goals and stick to their investment horizon. Redemption can proceed on any business day through either offline or online process. It is imperative to note that the price of funds units are fixed only once a day. The redemption request can be forwarded before the financial market closes down or when the fund house has marked its time.
The units will be redeemed at the net asset value NAV on that particular day. On average for equity mutual fund within business working days, the amount gets credited in the account. The redemption fee is levied on the investors as the charges or fees need to be paid to redeem or sell the units. It is also known as exit load. Other names of redemption fees are market-timing fees and short-term trading fees.
The redemption fees also encourage investors to hold the units for a long term. It is imperative for the investors to have clear understanding about exit load or redemption fees to calculate the exact amount they would be entitled to receive after redemption.
The redemption fee is levied to compensate for the short-term trading of securities.
Any opinions expressed may differ from opinions expressed by other departments of RJA, including our Equity Research Department, and are subject to change without notice. Neither the information nor any opinions expressed constitute a solicitation for the purchase or sale of any security referred to herein.
RJA may also have performed investment banking services for the issuers of such securities. Investors should discuss the risks inherent in bonds with their Raymond James Financial Advisor. Risks include, but are not limited to, changes in interest rates, liquidity, credit quality, volatility, and duration. Past performance is no assurance of future results. Stocks are appropriate for investors who have a more aggressive investment objective, since they fluctuate in value and involve risks including the possible loss of capital.
Dividends will fluctuate and are not guaranteed. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Guam Guam. Account Login. Forgot your password? Enroll Need Help? Find Advisor. Guam - 3QN. I simply do not want to lose it. My lifetime plan was to accumulate enough money to retire and live my lifestyle.
The results are shown in Table I Treasury bill real returns for annual, 5-year and year periods are all in a much narrower range than those of equities, and their standard deviation is also very much smaller. Both of those observations demonstrate that they have been more predictable and in that sense, safer than equity real returns. To compensate for that, their average return has been very much smaller than that of equities. In fact, on average T-bill returns are close to zero, relative to inflation.
And that too is one of the principles we derived in Stage I the higher the potential loss, the higher the potential gain that investors demand in order to be willing to invest in equities. The past has not always been a reliable guide to the future. In Figure I See which column it appears in. Then check the following year, and the one after, and so on for 20 years or so.
Too bad. Historically, equities have behaved like a good growth-oriented strategy, Treasury bills like a good safety-oriented strategy. But neither strategy is absolutely safe. Of course we hope for good outcomes when we invest. But we must consider the possibility that outcomes will be bad, perhaps even over long periods. In Stage I 21 we saw that, the longer you play the game, the more likely you are to experience a favourable outcome.
But even a good strategy playing the investment game for a long time can have a bad outcome. If we want to play it safe, we probably ought to plan to make our money last longer than we expect to live — just in case we outlive our life expectancy. For example, suppose people of our age are expected to live, on average, to age Perhaps we might be one of the people living longer than average. It would be wise to plan to make our money last beyond age 85, just to be on the safe side.
How much beyond age 85? We saw in Stage I 21 what average returns have been in the past. So, if we want to play it safe, we ought to project lower returns in the future. I ran the numbers that underlie Table I I chose 10 years as a reasonably long term for future projections — again, no magic to 10 years. First I calculated the average returns over year periods.
Half of the ten-year periods had returns higher than those averages, and half of the ten-year periods had returns lower than those averages. So now I asked a different question. What was the return that only a quarter of the ten-year periods fell below?
If we want to play it a bit safe when we project future returns, we can use the lower number instead of our best estimate of the future. For equities, we should subtract 4. For Treasury bills, we should subtract 1.
For equities, we should subtract 8. For Treasury bills, we should subtract 4. Whoa, that means we will be projecting returns that are much, much worse than the historical average! Will that happen? That uncertainty is one aspect of the risk we take when we invest. Sure, invest a greater amount in equities. The more you invest in equities, the better the outcomes will look. Not so. What happens when partners find that they have different attitudes to risk?
This stage shows that there are many sensible ways to proceed. He sits on money, then invests in a big lump sum. The thing is, I take my time to make a good plan, then I implement it. That feels slow to my wife, who is much more emotional.
My father is 74, my mother My mother is the financial one, with all the documents. My father is the one who wants to do it all himself. He says his friends all have great money-making investments! I worry about how to be respectful of my father and still reassure my mother. Panelist 9: I can sleep at night with risk. I make my own stock-selection decisions.
He does the financial planning. Panelist In our case, my wife is much more risk-averse than I am. TG: Once again you see not only differences, but how nuanced attitudes are, rather than just big clear-cut differences. And you see how many other factors come into play. Making an explicit decision about how much risk to take is a complex subject, precisely because so much else comes to mind, and because most of us have never had to think about it. In Stage I 31 I made the trite remark that people are different.
One occasion when the differences may be important is when you need to decide where you are on the eat-well-versus-sleep-well spectrum. Before I list the five possible ways to deal with it of which only one is wrong — the other four can all work, depending on the circumstances , let me say that typically the man is willing to take more risk than the woman. Researchers Barber and Odean wrote a paper about risk-taking in investment. OK, enough fun. This is a personal issue. Perhaps you can find someone else a member of the family, a friend?
It may be difficult to find a single approach that leaves both reasonably comfortable. But remember that this difference is a personal issue, not an issue requiring investment expertise. But the rubber has to hit the road. You have to invest the money. And perhaps the ultimate irony is that you might never face the issue directly, but instead default into active management. Let me explain what this is all about. Passive management means, in effect, buying all the available securities of a particular type in an investment market.
You then buy the index, typically through a mutual fund or unit trust or exchange-traded fund ETF that attempts to match the composition of the index. The index itself is typically compiled and periodically updated to reflect the available securities of the kind typically the asset class being considered. The goal of passive investing is to find a convenient way to enjoy the returns of everything in the index.
Since the index is compiled according to specific rules, matching its composition is usually an easy investment exercise and therefore relatively inexpensive. Active management means investing in the same asset class, but with the goal of achieving a higher return than the index, by selecting those securities thought to have a higher likelihood of beating the average that the index represents.
This requires a great deal of research in comparing all the securities available to choose from, and opinions change as time evolves, so trading selling some securities and buying others becomes necessary. The cost of research makes the fees charged for active management much higher than for passive management, and the cost of trading systematically reduces returns; so the barrier to winning in the active management game is high.
So can the rewards be, of course — as well as the cost of failure to win. Sometimes active management extends further, in trying to determine which of several asset classes are likely to do better than others in the short or medium term by which I mean the next few months or the next few years, rather than over your entire post-work horizon , and trading appropriately across asset classes.
It used to be and may still be, depending on which country you live in that financial professionals were paid more by the sponsors of the funds for placing you in active funds than in passive funds — potentially a conflict of interests, even when the professional sincerely believed that he or she was skillful in being active or in selecting skillfully managed active funds, and so you would benefit from this skill. What do we pay for the privilege of asking someone else to manage our investments?
This stage lists many forms of payment. Advice or any form of assistance with your post-work financial planning is useful. And so you should expect to pay for it. And many buyers of services — that is, people like you — prefer it that way; they prefer not to think about it or to have to write a check for it. And since there are multiple ways of remuneration, and payments for multiple services may be bundled into a single amount or formula, you should be aware of the unbundled that is, separate amounts of remuneration for the difference services.
One is an explicit fee that you pay directly, of a size independent of the amount of assets under consideration. And some forms of remuneration are a combination of fees and commission equivalents. So: buyer beware, and be aware. As you will have guessed by now, some commission-type arrangements involve both a front-end or back-end load as well as a trailer.
Asset-based commission-type arrangements have been very popular with advisory firms. And many buyers of services — that is, people like you — are perverse, in the sense that they will live happily with a concealed asset-based commission but be appalled by a much smaller explicit fee. This makes it much more convenient for a professional firm for remuneration to come from a commission; and since commissions vary from one kind of investment product to another, it is tempting to place your assets in a high-commission arrangement rather than a low-commission arrangement.
In some countries legislation has therefore been passed for example, in the UK in , in Australia in banning commission-type remuneration. But check, as you read this, whether this intention has taken effect. And the way to think about the issue of payment to professional firms is simply to be aware of how they are paid in dealing with you. What has all of this to do with active and passive investing? The connection is that active investing is much more expensive than passive investing, for the investment management company offering it in a mutual fund or unit trust or ETF.
It is also typically more profitable, so the company pays higher commissions for active than for passive. With legislation requiring a fiduciary standard of conduct and explicit fees, commentators predict that buyers of service that is, people like you will be more inclined to ask for passive management in order to reduce aggregate visible fees, or that professionals will be more inclined to place you in passive investment products for the same reason.
And so a natural question now is: how can you compare active and passive products? It is reasonable to be charged for financial advice and assistance. You pay for these services in many possible ways, some direct and some indirect. Only if you are aware of exactly what you are being charged can you compare the charges with what others might charge. How do we distinguish luck from skill? Is there skill?
What is it worth? This stage looks at those questions. As I said in Stage I 41, everyone who in involved in active management genuinely professes skill in being active. Is there such skill? If so, how do you locate it?
And if so, is it worthwhile for you to pay more for it? No need for suspense. Let me give you quick answers. Yes, there is investment skill. Locating it is very difficult. There, now you know; the rest of this stage gives you my justification for those assertions. I have said so on many occasions.
At one stage of my career I ran a department that attempted to find superior investment managers, in many asset classes around the world. This sort of skill gets gradually diluted with time. Investment markets become more efficient with the rapid dissemination of research and greater ease of trading. And so what happens is that persistent added value from skill becomes increasingly difficult to identify.
Flows into funds that have performed well in the recent past are invariably greater than into funds that have performed poorly. This is a fact. But by how much? My point is simply for you to ask the question. By coincidence, I just came across some comments on a study by Fidelity Investments. Madeline Farber, in Time magazine, summed it up with a great quote: . Good for women! After all the analysis, you still have to decide: active or passive.
This stage lays out precise reasons that tilt you in one direction or the other — or both.
The rationale: Because these funds make frequent trades, they are apt to generate short-term capital gains. These are taxed at a higher rate than long-term capital gains. Keeping them in a Roth IRA effectively shelters them, since earnings grow tax-free. Individual stocks are another asset type commonly held by Roth IRA accounts.
But the types of equities and equity mutual funds best-suited to a Roth fall into two basic categories: income-oriented stocks and growth stocks. One is income-oriented stocks —common shares that pay high dividends, or preferred shares that pay a rich amount regularly. Typically, when you hold stocks in a non-retirement account, you pay taxes on any dividends you earn.
Depending on whether they're qualified or nonqualified , the rate could be as high as your regular income rate. But, as with the actively managed mutual funds mentioned above, holding these within a Roth shields them from that annual tax bite. Growth stocks are small-cap and mid-cap companies that seem ripe for appreciation down the road.
But it won't matter that these stocks are worth substantially more when you cash them in after retirement. If held in a Roth, you won't owe any taxes on them at all. Remember, the whole strategy of the Roth IRA revolves around the assumption that your tax bracket will be higher later in life. Also, growth stocks can be volatile, so keeping them in a long-term retirement account that can withstand the ups and downs of the stock market over the long haul mitigates the risk.
Investors who trade equities frequently should also consider doing so from their Roth IRA. Doing so can shield any short-term profits and capital gains from taxes. When they think of income-oriented assets, many investors think bonds.
Interest-paying debt instruments have long been the go-to for an income-oriented stream. Corporate bonds and other high-yield debt are ideal for a Roth IRA. It's the same principle as with the high-dividend equities—shield the income—only more so. You can't invest interest payments back into a bond the way you can reinvest a dividend back into shares of stock a strategy to avoid taxes in regular accounts.
The Roth's tax protection is thus even more valuable here. What about exchange traded funds ETFs , that rapidly ascending rival to mutual funds? Certainly, these pooled asset baskets that trade like individual stocks can be sound investments. They offer diversification and good yields at much lower expense ratios than mutual funds. The only caveat is that, because most are designed to track a particular market index, ETFs tend to be passively managed that's how they keep the costs low.
As a result, they invest infrequently, so you don't really need the Roth's tax-sheltering shell as much. Still, it wouldn't hurt to have them in your account. Low annual fees and expenses—we're talking 0. There are indexes—and index funds —for nearly every market, asset class, and investment strategy.
As with investing in individual stocks, the ETFs to look for would be those that invest in high-growth or high-income equities. Individuals have two ways to invest in real estate:. Real estate investment trusts REITs , publicly-traded portfolios of properties, are big income-producers, though they also offer capital appreciation.
REITs invest in most kinds of real estate, including:. While most REITs focus on one type of property, some hold a variety in their portfolios. But not if they're held in a tax-sheltered Roth. You can invest in real estate using REITs, or you can go straight to the source.
But you'll need a self-directed IRA to do so. To invest in actual property, your Roth must be a self-directed IRA. There are very specific rules regarding real estate in an IRA. For example:. Otherwise, you could lose any tax advantages associated with holding real estate in an IRA.
Since Roth IRAs offer a tax shelter, there's no point in putting tax-exempt assets in one. Case in point: municipal bonds or municipal bond funds. Money market funds , CDs, and other low-risk, cash-equivalents investments are also ill-suited for a Roth, but for a different reason.
What's to shelter in an asset that isn't generating much interest, to begin with? And the liquidity they offer is wasted in an account you aren't going to touch for years. Annuities are more complicated cases. It depends on how soon you anticipate taking distributions from the Roth.
The advantage of a steady, guaranteed tax-free income stream at retirement, however, might justify this strategy—if, say, you're within five years of closing that office door. In terms of how you should allocate assets, that depends on a range of factors, including your age.
In general, younger investors have a long-term investment horizon. They would typically allocate more retirement assets to growth- and appreciation-oriented individual stocks or equity funds. Conversely, those who are retired or close to retirement would typically have a higher allocation of their investments in bonds or income-oriented assets, like REITs or high-dividend equities.
These are designed to work toward the year you plan to retire, automatically rebalancing along the way. Another option is to use a robo-advisor. Many brokerages offer managed accounts. An annual advisory fee typically covers the ongoing management of your money, including investment selection, rebalancing, personal service, and support. Left unchecked, these fees could quickly erode your earnings, leaving your nest egg a lot lighter come retirement. Overall, the best investments suited to Roth IRAs are those that:.
These investments can truly take advantage of the way the IRS taxes income. With a CD, you accept a time horizon when you invest — usually anywhere from one month to one or two years — and you have to pay a penalty if you access your cash before then. On the one hand, that makes CDs much less valuable as a home for your emergency fund or savings you might need to tap into on short notice.
In return, you should be getting a better rate. Second, and equally important: whether you really are getting a better interest rate than is available with high-yield savings accounts. The bottom line: MMAs are very similar to savings accounts but offer the option to write a limited number of checks each month.
Best for: Money you might need to use infrequently; investors looking for a little more flexibility than their savings account offers. The last of this trilogy of commercial banking products is the money market account , which operates on similar principles to the CD or savings account. Some key differences do exist, though. Again, money market accounts usually offer better rates than savings accounts, but they also come with more liquidity and might even let you write checks or use a debit card with the account.
That additional flexibility means that an MMA could play an important role in your finances alongside a savings account. However, once again, it has everything to do with the return, so shop around and compare the options not just with other MMAs but with CDs and high-yield savings accounts as well.
So, once you exit the realm of the FDIC-insured, basically sure-bet investments, you are stepping into a different world. The next tier up from banking products in terms of higher risk and higher returns are bonds, which are essentially structured loans made to a large organization. On your end, treasuries will act just like a CD in many ways. You invest with a set interest rate and a date of maturity anywhere from one month to 30 years from when you buy the bond.
The important caveat here involves the liquidity of treasuries. While your coupon payments are completely predictable and secure, the face value of your bonds will rise and fall over time based on the prevailing interest rates, stock market performance and any number of other factors.
The bottom line: TIPS offer lower yields, but the principle will increase or decrease in value based on the prevailing inflation rates while you hold the bond. Remember that money is naturally, gradually losing buying power. So while you might face almost no risk of losing money in real terms with a treasury, you do face the risk that inflation will increase and make the value of that money lower, relatively speaking.
Here, your interest payments are going to be considerably lower than what you would earn on a normal treasury of the same length. The bottom line: These debts issued by state and local governments are a little riskier than treasuries, but come with the bonus of being untaxed at the federal level. Best for: Taking on marginally more risk in pursuit of marginally better returns; investing while also keeping your tax bill as low as possible; investors looking for relatively safe bonds.
But you can get slightly better returns with only slightly more risk. Municipal bonds, which are issued by state and local governments, are a good option for just that. So not only are they usually still safe, but they come with the added bonus of reducing your tax bill when compared with many other options. The bottom line: These debts issued by corporations are just a bit riskier than munis, but usually offer just a bit more interest income.
Like governments of various sizes, corporations will also issue debt by way of selling bonds. However, like munis, there are also plenty of cases where the financial stability of the company is so sound that you can feel very confident that a default is extremely unlikely. A public company will regularly issue financial reports detailing assets, liabilities and income, so you can get a clear sense of where it stands.
In most cases, an AAA-rated bond represents minimal risks if you hold it to maturity. After all, what are the odds that a company like Apple or Google really has to file for bankruptcy at some point in the next few years? The bottom line: Stocks are riskier than bonds, but by purchasing large funds that represent hundreds of stocks and holding them for very long time periods, you can mitigate much of that risk and enjoy strong returns compared with bonds.
Owning stocks is much riskier than buying and holding most bonds. Stock markets can be incredibly volatile, and on any given day you might gain or lose a big chunk of your investment. Fortunately, there are two basic strategies you can incorporate that help defray much of the risk of investing in stocks. The first strategy is using index funds or ETFs to build diversification into your portfolio.
One company might sink due to a disaster, but a few hundred at the same time? Really unlikely. The second strategy to defray much of the risk of stock investments is to own stocks for a very, very long time. While stock markets are incredibly chaotic over any one week, month or even year, they actually become remarkably predictable when you start to look at them in terms of decades. You might also consider the Russell , which is made up of the 1, most-valuable American companies — giving you double the diversification.
The bottom line: Owning stock in an individual company is much riskier than the other options, but dividend stocks will provide a steady return whether markets are up or down. Best for: Long-term investments that still produce passive income; investors looking to invest in order to create a regular income stream; younger investors reinvesting dividends to maximize growth. Owning stock in an individual company is much riskier than anything else on this list.
After all, Enron investors likely felt pretty spiffy about their holdings right up until the end. And even short of that, one company can easily go into a downtrend or start reporting poor earnings and underperform the market. And dividend stocks present some especially strong options for a few reasons.
A dividend is a regular cash payment issued to shareholders — really the most direct way a stock can direct business success back to its investors. It also, typically, means some important things for the risk profile of that stock.
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