January 2018 - Page 3 of 4

2018 Financial Resolutions

January 25, 2018May 8, 2018

It’s 2018!
The new year brings new found hope and positive energy to tackle the year; leaving 2017 problems in 2017.
While you are thinking about how to make 2018 your year, remember to consider your financial resolutions as well.

Think about the financial mistakes or missed opportunities that happened last year and develop a plan to prevent them from repeating in 2018.

Look at your finances, from your paycheck to your portfolio. It is not enough to create resolutions, “a goal without action is a wish“, you must take action. Some will be easy; some will challenge you, but remember the end game and don’t follow the 99% who will fall off the wagon.

With that said, here are a few things to help guide you while creating your financial resolutions:

Credit Care
Yes, you read that right. Reassess every and anything that affects your credit reputation. While credit scores are more prominent in the U.S, Jamaica utilises credit scores too. In fact, check out yours for free at CreditInfo – http://creditinfojamaica.com/
Loan payments such as your mortgage, car payments, higher purchase and credit cards should be reevaluated and refinanced if possible. Improper care of these will affect your credit information and will make it difficult to secure loans for the future.

Retirement Fund
Do not neglect your retirement funds.
Regardless of age, a pension plan is something every working individual should be setting aside funds for. This year look at your paycheck and consider increasing the percentage you contribute. Remember that even if you are married, it is recommended to have separate pension plans.

Rebalance your investment portfolio
Call your SSL financial advisor today!
Your portfolio may be off balance due to stock-market fluctuations and may need to be rebalanced to ensure that one investment isn’t an outsized portion of your portfolio.
Has your risk appetite changed?
Has your focus or goals deviated from your original plan?
These affect your investments more than you think. As you change, so should your portfolio.

Remove underperforming securities, take gains from others and diversify your portfolio. Securing your financial wealth should be a top priority.

Beneficiaries
Last year you may have gotten married, divorced or had a baby, this is an excellent time to make sure that your assets go to the right person in the event of your death. Understandably it is not a fun discussion, but it is an important one.

Big Picture
Use this time of year to consider the bigger financial picture. For most, we look at short-term payments or goals but what about the future?
What do want five, ten, twenty years from now?
Aside from retirement, you may have other goals in mind that might take you a while to achieve. Keep those in mind when creating your financial plan. They encompass just about all aspects of your life and warrant serious consideration as you face the year ahead.

Remember the key to success is making simple financial changes.

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Don’t Sleep On Netflix

January 25, 2018May 8, 2018

Netflix shares have outperformed the industry in 2017 with a 55% increase in stock price. The California internet television provider is a favourite amongst our analysts and is expected to continue performing in 2018.

Revenue in the first nine months of 2017 rose by 32% to US$8.4 billion, and that figure could easily increase in 2018 as the company has implemented measures to promote revenue, such as focusing on producing more original content. In fact, Netflix has plans to release over 80 original movies in 2018.

Increasing original programming was a smart move for Netflix even though the media firm received backlash from the public about its massive spending. Netflix spent a whopping US$6 billion on original programming alone for 2017. However, the investment paid off as they won several Emmy awards for shows such as Stranger Things, House of Cards and The Crown.

Furthermore, the company plans to increase the number of international subscribers from 4.45 million to 5.05 million, adding to their current 56 million international subscribers.

It is apparent viewers welcome the changes and will continue to support Netflix as they transform the way people view TV.

The current market price for Netflix is US$201.7; a good buy for investors who want growth in 2018.

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No Stopping Disney

January 25, 2018May 8, 2018

Disney has been making moves, both on the stock market and in the acquisition arena.

Three days into the year and the media giant stock price increased by 4.6% and is expected to soar into the double digits.

The company has been making headlines with its recent acquisitions and its parks & resorts. This segment, representing 33% of the company’s revenue, consistently grown in revenue last year with Disneyland Paris and Shanghai Disney Resort performing above expectations.

Furthermore, the company currently has projects in the pipeline which will focus on revamping its theme parks. This includes several new rides and attractions such as the Disney Skyliner gondolas, Tron coaster, Ratatouille Ride and the Guardians of the Galaxy Ride.

The company has announced plans to build a Star Wars themed hotel, following the blockbuster hit Star Wars: The Last Jedi, which hit the $1 billion mark at the box office.

The company has taken an aggressive approach in the past few months, and we are here for it.

Are you buying Disney?

I am.

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Currency Risk

January 25, 2018May 8, 2018

Investing in any securities not denominated in the investor’s own base currency introduces currency risk due to the volatility of foreign exchange rates.

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Under Armour’s CEO Has Got To Go

January 25, 2018May 8, 2018

Under Armour’s [NYSE: UAA] stocks performed poorly in 2017 and to be honest 2018 is not looking any better.

And guess what?

Investors know this. Market sentiment about the apparel company is so low that it is practically non-existent.

Under Armour’s shares have declined over 45% in 2017 while competitors such as Nike [NYSE: NKE] have increased. The company’s underperformance and rising debt levels remained a concern.

The overvalued company has consistently revised its estimates down for 2017 and yet still managed to miss these estimates time and time again.

In a press release, management announced plans to restructure the company with the hope of having a better year, but I wonder does that include giving their CEO Kevin Plank the boot?

Kevin Plank, a PR nightmare, does more harm than good to the company’s bottom line. Between his comments regarding U.S President Donald Trump and his involvement in Plank Industries, I am starting to wonder if Plank is serving UAA’s best interest.

Assuming the new U.S. corporate tax reform benefits the company, it will be futile without a drastic change in leadership.

Don’t get me wrong, Kevin Plank’s vision stands to benefit shareholders long-term. However, the lack of aggressive growth and crumbling balance sheet makes investors itch to dump the stock.

Under Armour’s current focus on endorsements, acquiring fitness apps and restructuring leaves the entity unable to challenge both the rising Adidas and the dominant Nike.

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Gold

January 25, 2018May 8, 2018

Gold is potentially attractive as an investment due to its high liquidity, its status as an asset held by central banks, and because it is seen as a good source of diversification for funds and an inflation hedge.

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Lifestyle Investment

January 25, 2018May 8, 2018

Lifestyle Investment is a process whereby a member’s investments are adjusted depending on their age. Typically, assets are switched from equities to bonds and cash as retirement approaches.

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Ciboney, It Is Time To Say Goodbye to JSE

January 25, 2018May 8, 2018

It seems so long ago that the investor of hotel properties, Ciboney was a household name in Jamaica. The out-of-business company has yet to recover from falling into debt despite selling off the majority of its assets to fulfil its debt obligations.

Ciboney’s primary asset, a 6.56 hectares of beachfront property in Westmoreland valued at approximately J$250 million, was recently sold to Green Forest Limited for J$249 million.

FINSAC, who owns 72%, has held on to the Culloden property in the hopes that the company or property will catch the eye of no doubt aggressive investors, despite the rising debt levels.

According to the Group’s August 2017 statements, the company’s net current liabilities have increased by 9.44%, while assets have declined by 7.4% when compared to the same period last year, respectively.

While it remains unclear what Green Forest Limited plans to do with the property, my bet is on villas, the question remains.

Should we be expecting a delisting from the Jamaica Stock Exchange in 2018?

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Yield

January 25, 2018May 8, 2018

A measure of the income return earned on an investment. In the case of a share, the yield expresses the annual dividend payment as a percentage of the market price of the share.

For bonds, the running yield is the annual interest payable as a percentage of the current market price. The redemption yield (or yield to maturity) allows for any gain or loss of capital which will be realised at the maturity date.

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Illiquid

January 25, 2018May 8, 2018

Illiquid assets are those assets that cannot be easily bought, sold or converted into cash. It may often be impossible to convert the asset to cash until the end of the life of the asset. Illiquid funds are those that take time for investors to trade.

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Market Capitalisation

January 25, 2018May 8, 2018

Market Capitalisation is the total value of a company, as determined by the market price per share multiplied by the number of shares in issue.

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The Future Of Oil

January 25, 2018May 8, 2018

The oil market has never looked more stable in years as it does now.
Oil prices are set to end the year with a bang and everyone is looking at 2018 with wonder.

What to look out for in 2018?

U.S. shale growth

U.S. shale output will continue to rise but by how much is uncertain. There have been numerous red flags that raise a lot of questions about the health of the shale industry. As operation costs increased, drilling companies are reporting losses which illustrate that the industry’s break-even price has been grossly miscalculated. The IEA reports suggest that shale will rebalance next year.

OPEC playing nice

OPEC production declined in November for the fourth consecutive month. The group’s compliance rate with the production cuts is at 115%, the highest number yet, this is a positive sign heading into 2018. It is expected that OPEC will extend the production cut agreement into the second quarter of 2018.

Inventories

OPEC’s strategy will primarily come down to what happens to global inventories. The stock surplus is now at about 100 million barrels more than the five-year average, down two-thirds from the start of 2017. It’s likely that the excess will be erased at some point in 2018.

Unexpected outages

All of these forecasts and predictions will become void if supply disruptions occur. Forties, the largest oil field in the North Sea, shut down recently due to cracked pipelines and could be closed for weeks. This incident highlights the type of event that can catch the oil market by surprise, leading to sharp and sudden price increases even if all seems well elsewhere in the world.

Venezuela remains a concern as the oil producing company production declined by 42,000 bpd. Current output is at a 30-year low and is anticipated to get worse before it gets better. Other countries like Nigeria, Iran and Libya can have serious implication for the oil market if a conflict arises. It only takes one significant disruption to upend the most carefully crafted oil forecast.

That said we remain optimistic and estimate that Brent will hit the $60-$65 per barrel mark next year.

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Alternative Investments

January 25, 2018May 8, 2018

Alternative Investments are investments other than mainstream equities and bonds. New capabilities sometimes referred to as “alternatives” include hedge funds, private equity, infrastructure, gold and commodities.

Real estate is also sometimes described as an alternative.

Alternatives may be asset classes in their own right (e.g. gold) or may be new strategies for investing in established asset classes (e.g. hedge funds).

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DOW rose 5,000 points in 1 year

January 25, 2018May 8, 2018

The Dow Jones industrial average just did something it has never done in its 121-year history.

The 30-stock average is now up more than 5,000 points in a year, marking its biggest annual-points gain ever.

The Dow also notched a record close for the 70th time this year, which is another milestone. To put that into perspective, it means that about one of every four trading sessions this year has been a record close for the index.

The Dow, along with the S&P 500 and the Nasdaq composite, has had a banner year, rising 25.5 percent. The S&P 500 and Nasdaq are up 20.2 percent and 29.9 percent, respectively.

To be sure, most of the big point moves are in recent years for an apparent reason: The Dow is much bigger than it was decades ago. So investors should keep this point move in perspective.

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FosRich Listing Ceremony

January 25, 2018May 8, 2018

FosRich Company Ltd executed a successful initial public offering, closing one minute after the offer opened on December 4, 2017.

FosRich, incorporated in 1993 by Cecil and Marion Foster, is Jamaica’s premier distributor of lighting, electrical and solar energy products.

The listing ceremony was held on Tuesday, December 19, 2017, at the Jamaica Stock Exchange.

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Credit Rating

January 25, 2018May 8, 2018

Each bond issue is given a credit rating according to how much investment risk is associated with the bonds – i.e. how likely it is that the issuer will be able to meet interest (coupon) and capital (principal) repayment obligations.

The higher credit ratings (such as AAA) mean that the issuer is highly likely to be able to meet these obligations and thus can offer bonds with lower interest rates and still attract investors.

Bonds with higher ratings are referred to as investment grade, those with lower ratings as non-investment grade (i.e. D to BB+).

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5 Traits Successful Entrepreneurs Have

January 25, 2018May 8, 2018

What does it take to become entrepreneurs?
Do you have what it takes?

Find out here.
Here are five attributes that set successful entrepreneurs apart:

1. Passion and Motivation

Although many traits make entrepreneurs successful, perhaps the most important are passion and motivation.

Can you handle the frustration when your ideas fail? Remember, success is a function of passion and determination.

2. Risk Takers
Entrepreneurs are risk takers, diving into a future of uncertainty. But just because you take risks doesn’t always make you successful.
Successful entrepreneurs are willing to risk their time and money on unknowns, but they also keep resources, plans and bandwidth for dealing with “unknown unknowns” in reserve.

When evaluating risk ask yourself, “Is this risk worth it?”

3. Market Knowledge
Most become successful because they came up with something revolutionary or fixed a problem that most if not all users experience. It is essential that entrepreneurs have a good sense of the market.

Who is the target market?
What do they need?
What makes my idea different/ better than the rest?

Remaining unaware of changing market needs, competitor moves and other external factors can cause even great products to fail.

4. Making Money Moves
It takes time for any venture to become profitable. As such, capital is a limited resource and needs to be utilised wisely. It is essential to plan for present and future financial obligations and set aside an emergency fund. Even after securing funding or going fully operational, a successful businessperson keeps a complete handle on cash flow, as it is the most crucial aspect of any business.

5. The Right Connections
No man is an island. No man stands alone.
Having friends and colleagues is great but what I’m talking about is knowing the right people who can help you bring your ideas to life.
Such as a mentor with extensive networks to seek valuable advice.

Do you have what it takes to be an entrepreneur?

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The Fed says, “One More.”

January 25, 2018May 8, 2018

As predicted, the U.S. Federal Reserve Fed voted on December 13, 2017, to raise the interest rate from 1.25% to 1.50%. The committee believes the labour market has continued to strengthen and that the gradual increase in rates will stimulate economic activity.

This is the fifth time the Fed increased rates since the financial crisis of 2008.

The outgoing Fed chair, Janet Yellen, will say goodbye to the committee on February 3, 2018, and all eyes are now on the incoming Trump-nominated chair, Jerome Powell.

The year 2017 has been an unprecedented one. On the one hand, inflation is low and stagnant suggesting the Fed should delay raising rates. On the other hand, economic growth and declining unemployment indicate increase rates. The policymakers are charged with playing “Goldilocks“, keeping rates not too high, not too low, but just right!

I do expect at least two rate hikes in 2018, as the Fed strive to stimulate economic growth of 2.5%, a revision from 2.1% previously forecast.

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Initial Public Offering (IPO)

January 25, 2018May 8, 2018

An Initial Public Offering referred to as an IPO is the first time that the stock of a private company is offered to the public.

IPOs are often used to raise capital for companies seeking to expand their venture.

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Asset Class

January 25, 2018May 8, 2018

An Asset Class is a collective term for investments of a similar type with a unique combination of investment characteristics.

The main asset classes are:

Equities
Bonds
Cash
Real estate

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