Kimberly Law
EXPERTS globally have warned of a challenging year ahead amid an economic slowdown with rising inflation and interest rates.
The question is how best can you manage your money in 2023 and are you able to get decent returns amid turbulent times?
StarBiz spoke to some financial planners as to how they plan to manage their money in 2023 and the tips they offer their clients.
Kimberly Law, a financial adviser representative has this to say: “Personally, I can put my money in equities and areas with growth potential like the United States market. I can handle the market volatility as I have a long investment horizon and my risks are well managed.
“Other areas of my personal finances are well taken care of. I don’t enjoy watching the market 24/7 or trading according to my time commitment. The markets are weak now which presents great opportunities,’’ she said.
To her clients, she advises them to not to invest in gold or gold funds. Gold is best stored in its physical form for its cultural value.
She is against cash trust from trust companies. It may be popular with the senior crowd and is marketed as a “guaranteed high annual return” investment, but in reality it is unregulated as an investment.
On cryptocurrency, she said third party and unlicensed trading platforms are unreliable and exposes one to potential scams.
On managing your money, she said there are two choices. Either increase your income to maintain a certain lifestyle or you reduce expenses.
She said as we can’t adjust mortgage repayment, we can control our living expenses, especially daily expenditure. Ways to adjust expenses are choosing cheaper or lower cost alternatives and cutting
If all aspects of personal finance are well managed, then invest aggressively in equities since the current market is currently weak, Law said.
Rajen Devadason
Manulife Investment Management (M) Bhd licensed financial planner Rajen Devadason expects a “fabulous year of sowing, but not necessarily reaping.’’
“This means 2023’s calendar-year returns may well be negative. I have no problem with that as the only way to grow wealthy consistently is to buy-low-and-sell-high,’’ he said.
He believes the United States recession, if it does materialise, will be short and shallow. That will give excellent low entry points into investments worldwide.
What he will avoid like a plague is debt.
“Do your best to pay off existing loans as fast as possible without sacrificing reserve pools of cash that must be kept deep and stable to deal with both emergencies and excellent portfolio investment opportunities when intermittent crashes occur. And trust me, they will,’’ he said.He believes having the new Prime Minister and as Finance Minister is a “very, very good thing’’ as in the past he, (Datuk Seri Anwar Ibrahim) managed a national budget surplus. Hopefully that will be replicated in due time.
“I believe his (Anwar’s) goal will be to rein in overspending, corruption, nepotism, and the fallout from widespread incompetence.
“If he succeeds, foreign investors, both portfolio investors and direct manufacturing investors will gradually return to our shores. As such, I plan to raise the domestic component of my equity portfolio throughout next year because of growing local and international confidence,’’ Devadason said.
His main investment targets for 2023 will include United States, China and Malaysia equities, global commodities, water technology and water resources.
Whitman Independent Advisors Sdn Bhd founder and managing director Yap Ming Hui said whether you are a business owner or employee, you must find ways to increase your income or increase the return on the money that you have saved and accumulated over the years.
Even though some people may say that interest rates on fixed deposits (FD) are higher compared to one year ago, inflation will always be higher than FD rates.
Yap Ming HuiAs such, the only way to invest money for decent returns is to invest in quality investments including properties and shares. Bonds would not be suitable in this instance.
Yap believes a holistic financial plan is a more accurate way of knowing how much you need to save to invest. With or without a plan, invest 30% of your income every month either via the Employees Provident Fund or though savings for both.
Avoid long and infinite risky investments and scams in the market. Personally, he leans towards a globally diversified portfolio comprising solid asset classes like equities, bonds, real estate investment trusts, properties, gold and precious metals in market like Asean, United States, Europe, Japan, China and Malaysia.
It is diversified because no one can predict accurately, hence it is best to invest in the growth of the whole world economy that is more certain, compared to betting on any sector or any country, which could be just a guessing game, Yap said.
To be able to invest and manage your money in 2023 you must list down what you want and how much it costs.
Next, review your current financial resources in savings and assets accumulated thus far.
Thereon, figure out how much you need to save and what returns you desire to fulfill your financial goals, Yap added.
Happy New Year and happy investing.
