Stay with your investments, advisors urge

Now is not the time to pull back on investments, executives of two leading investment firms have declared.

Chief Investment Officer of Fortress Advisory & Investment Services Peter Arender suggested that investing now could pay off in the medium to long-term both for companies and individuals.

As the COVID-19 pandemic deepens, stock markets around the globe have plummeted to record-setting depths, attracting negative investor sentiments from time to time.

But Arender told Barbados TODAY: “At times like this it is very tempting to look at the news flow and feel that one should alter how you are investing, but time and time again history episodes like this have shown, from an investment point of view, that the critical thing is to continue on your long-term programme.

“As prices get cheaper it naturally means that we can buy more of good quality securities. Behind the scenes that is what we are doing in our funds at Fortress around the world and in the Caribbean.”

For individual investors, Arender urged sticking with a steady investment programme, while investment markets are “moving around in ways that are uncontrollable”

He added: “Any study you quote would show that it is the sticking to a steady programme overtime that will lead to investment success, as oppose to changing it during especially volatile times like these.

“Our strong advice is when it comes to investments, continue in an investment programme, in the investment terms this too shall pass. In times like these when times are the lowest that we settle for some of the best future returns.”

For those who are out of a job but have cash saved over the years, he said while it was important to have cash to spend now, they should consider putting some aside for the long-term.

Arender said “We all should have an amount of money that we keep liquid and accessible in something like a bank account to be available for emergencies.

“The rest of it though, we should invest in assets like stocks, funds, real estate over time that can keep ahead of inflation and earn good long-term returns.

“So one, figure out how much you need to keep on hand for emergencies, and the next step is to take the amount that you don’t need and locate that into a good long-term investment programme, and sometimes that can include lumpsum investments in mutual funds or at times it can include a steady monthly savings programme.

“But whatever you choose just take a long-term programme and stick with it. I think that is the important part .”

Cleora Y. Farquharson, Assistant Vice President of Pension Services with Royal Fidelity, also warned against pulling investments at this time, explaining that market volatility was expected at least in the short-term.

She said: “It is very normal for the value of investments to go up and down. Although not guaranteed, history shows us that values generally go up over the longer term, despite any short-term volatility.

“For persons with a short-term horizon an investment in a fixed income fund is a good option, especially given the non-existent rates that banks are paying. If the timeframe is medium-term and depending on their risk appetite some funds can be allotted to a balanced fund.”

The Bahamas-based pension specialist said making investment decisions based on what was happening in the short-term could be “risky”.

Farquhar told Barbados TODAY that a loss on investment often occurs when an individual cash out before the time and therefore it was critical not to panic but wait out the current COVID-19 pandemic until the markets rebound.

She said: “It might be tempting for example, to move investments into cash for a while. But in doing that, investors will miss out on the point when the value goes back up. So they could lose out in the long-term.

“Always speak to a professional when making important investment decisions. Additionally, persons should reduce expenses, delay any capital projects and take advantage of any Government assistance programmes.”

marlonmadden@barbadostoday.bb