Month: October 2018

Halloween might be around the corner, but the spook-fest has already started for some investors after the market pullback a few days ago.

The Federal Reserve is expected to increase rates three times in 2019, and therefore, a tighter financial market is anticipated for the foreseeable future.

This means that there will be greater competition for capital as the yield on short-term bonds increases and also contributes to falling equity prices.

Investors have reset their return requirements across asset classes, given the heightened ambiguity and rising short-term yields.

Part of the recent equity market drop was due to concerns about the intensity of the U.S.-China trade dispute. Many multinational corporations are allegedly concerned that market uncertainty will affect not only price but also earnings.

Trade tensions may not eradicate global growth but pose a threat to trade protectionism which directly impacts many corporate organisations.

The decline in MSCI World Index last week was the index’s second-largest weekly drop in 2018, although global equities remain in positive territory year-to-date.

Equity markets have seen a sharp rotation in leadership, with momentum shares under-performing. The rise in 10-year U.S. Treasury yields at the start of last week came after Fed officials’ hawkish commentary which pushed up market expectations for the path of U.S. policy rates. The rise in market yields has been driven by higher real rates and a higher term premium, often associated with increased uncertainty.

Corporate earnings are supported by sustained above-trend global growth which adds to the equities over fixed income preference as well as portfolio resilience strategy recommended.  Poor Q4 performing companies risk unforgiving market sentiments straight into 2019.

While risk cannot be excluded in investing, investors are recommended to choose quality equity exposures such as companies with resilient earnings and stronger balance sheets. As mentioned earlier, investors should consider going short on fixed income corporates and private placements.

Ideally, the rise in yields should eventually point to higher returns across asset classes long-term. This shift in market dynamic reinforces SSL philosophy on building greater resilience in portfolios.

 

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

Follow us on Facebook, LinkedIn and Twitter please leave us a review.

Blockchain technology is a digitised, decentralised, public ledger of all cryptocurrency transactions, creating blocks and records them in chronological order.

Blockchain allows market participants to keep track of digital currency transactions without central recordkeeping. Each node is connected to the network and gets a copy of the blockchain and downloaded automatically.

Initially created as an accounting method for the virtual currency Bitcoin, Blockchain has the potential to be used outside of cryptocurrency with the assistance of a distributed ledger technology (DLT).

As we know, the technology is primarily used to verify transactions within digital currencies, though it is possible to digitize, code and insert practically any document into the blockchain, doing so by creating a permanent record that cannot be changed; furthermore, the record’s authenticity can be verified by the entire community using the blockchain instead of a single centralized authority.

ADVANTAGES

Electronic ledgers are much cheaper to maintain than traditional accounting systems; the employee headcount in back offices can be greatly reduced.

Nearly fully automated DLT systems result in far fewer errors and the elimination of repetitive confirmation steps.

Blockchain allows for the reduction of transaction cost by eliminating third-party intermediaries and overhead cost for exchanging assets; blockchains have the significantly reduce transaction fees.

DISADVANTAGES

Massive Energy Consumption as Blockchain miners attempts trillion of solutions per second to validate transition, thus requiring a considerable amount of computer power.

Despite strong encryption and permission blockchains, cybersecurity is still a concern to the public given data is decentralised and there is a fear of entrusting personal data to a blockchain solution.

Due to blockchain creating permanent records, resolving challenges such as transaction speed, data limits, the verification process is much more complicated.

Currently, all remote transactions, financial or otherwise, rely on the authentication from a central authority for the execution of both parties’ transaction. But, with the birth of the blockchain system, gave rise to a new system referred to as ‘Smart Contracts’ which was more associated with the cryptocurrency Ethereum. With that said, according to Investopedia, it is a “self-executing contract between buyer and seller, directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralised blockchain network.” That being said, Smart Contracts provides a quick and seamless alternative for multiple parties across different countries for conducting transactions without the central bank, legal system or external enforcement forces authentication, by permitting trusted sales and agreements to be carried out after the parties have met pre-existing conditions defined in the blockchain system. Furthermore, they render transactions traceable, transparent, and irreversible.

Currently, companies are adopting the use of the revolutionary Blockchain technology, some of which include giants such as Amazon.com Inc. [NASDAQ: AMZN], Alibaba Group Holding Ltd. [NYSE: BABA], Microsoft Corp [NASDAQ: MSFT], International Business Machine Corp [NYSE: IBM], all finding uses of the system to make their internal processes more efficient and meeting the needs of consumers unquenching thirst for convenience.

Moreover, stock exchanges have started adopting the use of the tech, with the first one to test its system Nasdaq Inc. [NASDAQ: NDAQ]. Additionally, within our shores, the Jamaica Stock Exchange [JSE: JSE] announces its intention to explore cryptocurrency.

What are your views, do you think Blockchain technology will create the avenue for what financial institutions, stock exchanges, corporations, and consumers have been searching for decades to have an efficient and seamless transaction process across borders?

 

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

Follow us on Facebook, LinkedIn and Twitter please leave us a review.

Formerly known as the ‘Kingston Stock Exchange’, the Jamaica Stock Exchange began trading on February 3, 1969. The 49-year-old company became publicly owned in June 2008, listing on its own exchange under the ticker JSE.

Six years later, JSE became the 16th member of the United Nations Sustainable Stock Exchanges (SSE). Their aim, to provide a platform that allows efficient and effective communication amongst various stock exchanges in countries worldwide.

In 2015, Bloomberg rated the Jamaica Stock Exchange (JSE) as the number one stock exchange in the world!

The stock exchange surged more than 80%, surpassing the performance of other indexes globally such as the Dow Jones Industrial Average and Euro Stoxx 50.

What are some other factors that contributed to this excellent performance?

The Jamaica Stock Exchange (JSE) launched the Caribbean’s first online trading platform in May of 2015. This certainly caught the attention of investment ‘gurus’ around the world as well as local retail investors. With the tax break given to companies that list, business has been booming for JSE as entrepreneurs utilise the markets rather than take the typical loans avenue. Launching its Junior Market in 2009, which jumped 160% in 2015, allows for smaller companies to list in order to raise capital, despite being unable to meet the criteria to list on the bigger markets.

Fast forward to October 2018; Jamaica once again has dominated the world of investments!

In the last five years, the Jamaica Stock Exchange (JSE) has remarkably exceeded the 73% and 86% rally of the S&P 500 and Vietnam’s Ho Chi Minh Stock Exchange, respectively.  Soaring its way to the top with a massive 233% rally, which produced a 19% increase in dollar value alone for this year.

Jamaica’s index outperformed approximately 100 other equity gauges according to Bloomberg.

While the country struggles with issues such as crime, brain drain and debt, trading has become instrumental in the average Jamaican’s life. Since 2015, approximately 22 companies have listed on the stock exchange with another four slated for the quarter four of 2018.

The finance ministry in conjunction with the International Monetary Fund (IMF) aims to achieve an annual economic growth of 5% by 2020. This will take a combination of strategic moves from both the public and private sector as well as a reduction in debt levels.

Jamaicans are shifting from saving to investment mode due to low-interest rates and financial literacy.

“The world is discovering the potential of our beloved country, the largest English-speaking Caribbean island set squarely in the centre of the Americas.” – Jean Lowrie-Chin of Jamaica Observer wrote in 2015.

 

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

Follow us on Facebook, LinkedIn and Twitter please leave us a review.

2018 proved considerably eventful as the stock markets experienced several pullbacks during the first quarter. While Quarter 2 was generally more favourable,  as NASDAQ, S&P 500 and oil markets captured most of the growth. Naturally, as the markets go up, Gold moved in the opposite direction. The price rose by 4% in the first three months of the year, only to finish in June by -4%.

Three factors stand out that affect Gold’s performance:

1. A strengthening US dollar;
2. Higher investor threshold for headline risk;
3. Soft physical gold demand.

In the long-term gold’s has a positive relationship to economic

growth but in the short-term, its performance is sensitive to risk and uncertainty. The dual nature of gold could benefit from key macroeconomic trends developing in the second half of the year.

Investors should position for:

• positive but uneven global economic growth;
• trade wars and their impact on currency;
• rising inflation and an inverted yield curve.

Also, gold’s recent pullback is supportive of consumer demand, as low prices tend to spur buying; at the same, it may provide attractive entry levels for investors.

Drivers of the gold price are grouped into four categories:

1. Wealth and economic expansion;
2. Market risk and uncertainty;
3. Opportunity cost;
4. Momentum and positioning.

The dollar has strengthened over the past few months, making its most significant appreciation since the last quarter of 2016. It would be easy to apportion this trend to higher US interest rates, but rates have been increasing consistently since the end of 2016 – a period during which

the US dollar generally depreciated.

Instead, the dollar strength is due to a combination of two factors:

• continued easy monetary policy in other parts of the world;
• an understanding that the US may be better placed to benefit from trade wars.

In the face of continuing stock price rises, US bond markets seem to be placing a greater probability on higher inflation and lower growth. While it’s impossible to time the market, investors have generally profited from holding gold during periods of economic deceleration.

Current key trends support gold demand and while the summer period tends to be a quiet period for gold trading, the price has tended to increase in September-November as consumers prepare for a traditional buying period and investors re-balance their portfolios before the end of the year.

 

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

Follow us on Facebook, LinkedIn and Twitter please leave us a review.

 

Things continue to look up as Mayberry Jamaica Equities Limited [JSE: MJE] recently borrowed $2.2 billion in cash for new investments in stocks on the local stock market. This coincides with a B rating from Standard and Poor’s credit rating for Jamaica; an upgraded outlook to positive from stable.

CEO of Mayberry Investments Limited Gary Peart explained that “We got it at 7.25% for five years” with expectations that the gains in the market will outperform the cost of funds borrowed. The explanation behind the S&P upgrade was due to the combination of modest GDP growth and better external liquidity, agreeing with Peart’s statement that, “The economy is going in the right direction”.

MJE holds minority positions in some companies listed on the JSE mainly, Caribbean Producers Jamaica Limited [JSE: CPJ], JMMB Group Limited [JSE: JMMB], Caribbean Cement Company Limited [JSE: CCC] and Supreme Ventures [JSE: SVL]. Despite not directly saying which stocks they will be investing in, Peart mentioned that some of his top ‘buy’ picks are Stationery and Office Supplies [JSE: SOS], NCB Financial Group [JSE: NCBFG], IronRock Insurance [JSE: ROC] and of course the recent July listing MJE itself.

Mayberry Jamaica had initially considered selling a portion of its equity holdings but decided against it due to their bullish stance on the market foreseeing five to six years of consecutive growth. A prediction of what could possibly be the longest bull run in Jamaica’s history. MJE net asset value earlier this month was $10.61 per share, up 12 percent from $9.48 prior to listing on the Jamaica Stock Exchange [JSE].

With this increase in the span of three months, they are optimistic the upward trend will continue. For the bearish investors who may have concerns about the market pulling back, Peart recommended they invest in high dividend-yield stocks making it a win/win for everyone.

At Mayberry Investment’s Monthly Investor Forum, Mr Peart encouraged attendees to look towards the stock market rather than continuing with the typical savings account earning a meagre two per cent average interest rate on deposits.

He highlighted how much more profitable it would be if persons actually invested in commercial banks rather than just putting down their money for safekeeping. Agreeably, he admitted that in recent times it may be hard to find value on the stock market but with the services of a broker, investors can navigate these pitfalls.

Interested in buying MJE?

Contact SSL to get started.

 

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

Follow us on Facebook, LinkedIn and Twitter please leave us a review.

 

You may think we are referring to the rubbery material that stretches when you pull it but instead, we are referring to one of the year’s top performing first-day IPO in US history. It is the recently listed Dutch-based company, Elastic B.V. [NYSE: ESTC].

Elastic makes the power of search – the ability to find relevant information and insights from a large amount of data – available for a diverse set of applications and use cases. Much like other search engines such as Google, Yahoo, Bing!, etc. Elastic is determined to answer all your questions thoroughly. The truth is, you have been using Elastic without even realising.

On October 5th 2018, the first day of trading, the stock skyrocketed to a whopping 94% increase after listing at US $36.00 to close at $70.00. Before listing, the company had adjusted its IPO price a few times before deciding on 7 million shares at $36 per unit.

Furthermore, the company raised $252 million and ended the day with a market capitalisation of almost $4.9 billion. The proceeds will be geared towards the acquisition of or investment in technologies and solutions, research and development, working capital, sales and marketing activities.

Elastic is the latest tech company to go public contributing to what is referring to as the best year for tech IPOs since 2014. As a data service provider, Elastic equips other companies with relevant information after sifting through massive amounts of data.

According to its prospectus, the company will help in your everyday life, here’s how:

Have you ever wondered who detects those nearby drivers and riders when using Uber or Uber Eats? Elastic.

How is Tinder so efficient in finding those matches for you? Elastic powers those algorithms used to guide you to the perfect match.

Have you ever noticed how simple it is to shop online with Walgreens? Elastic helps you to find the right products to add to your cart.

With over 5,500 customers in 80 countries and industries, the company is helping individual developers and organisations. Reporting a growth of 81% year-over-year and revenue of $159.9 million in fiscal 2018 an increase from $88.2 million in 2017.

If the 6-year-old Elastic continues on a high, its biggest shareholder, co-founder and former CEO Steven Schuurman, who has almost 19 per cent could well be on their way to becoming a billionaire. Under the brand Elastic Stack, its portfolio of search products includes Elasticsearch, Kibana, Beats and Logstash with over 350 million downloads.

Considering this impressive start, Elastic tweeted “Today was a grand day. Thank you to everyone for joining us on this journey. We look forward to what happens next.”

Indeed, we will be looking on as well wondering if Elastic can stretch to the levels of some of its giant competitors like public cloud companies Alphabet Inc. (NASDAQ: GOOGL) and Amazon.com Inc (NASDAQ: AMZN).

 

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

Follow us on Facebook, LinkedIn and Twitter please leave us a review.

Geoffrey, the Giraffe, made the news once again as talks about a possible revival of the iconic Toys R Us [TOYs].

Are you emotional as I am?

It’s no secret that the 60-year-old American toy company has been going through a rough patch, closing their last 800 stores on June 29, 2018, liquidated its merchandise and completely sold everything in their stores. After making several efforts to restructure, issue bonds and introduce new products, the company made a tough decision to discontinue operations after there were halts in investments, billions of dollars in debt and the market shifting from brick and mortar.

The bankruptcy auction slated to take place this month was cancelled due to unattractive bids on the company’s assets. The lenders who are now in control of the retail giant are trying their very best to revive the brands of Toys R Us and Babies R Us so that they can maximize the value of both companies by opening new retail stores.

Seth Freeman, Senior Managing Director at Glass Ratner Advisory & Capital group, said “The company did generate operating profit—and without debt, its profitability would be easier to maintain” but the concern remains, how long will the revival take place and will they find retail space in time Christmas, one of their most profitable seasons.

We are less than 3 months away!

The good news is this generation is still aware of the brand, the bad news is the markets are shifting from brick and mortar. Toys are always in demand as children are born every day however post-millennials gravitate towards the digital world.

But not everyone is sentimentally happy about this [TOYs] rival. Thousands of former Toys R Us employees are still waiting for a total of $75 million in severance pay and some go as far as to call the re-emergence as a “PR stunt”.

The company is reported to be $7.9 billion in debt versus $6.6 billion in assets when it filed for bankruptcy in it’s last years. While the brand name and Geoffrey have value these are not liquid, so unless the company sheds it’s debt and major costs, a turnaround may not be feasible.

There’s a saying “Once bitten, twice shy”, but how eager will suppliers be to resume trading with [TOYs]? It is only fair to be a bit sceptical about providing goods to a company that failed. It may be a risk worth taking for hedge funds and angel investors but how sustainable will the company be?

Can Santa pull off a Christmas miracle?

Or is Amazon [NASDAQ: AMZN] forever on Santa’s nice list?

 

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

Follow us on Facebook, LinkedIn and Twitter please leave us a review.

Climate change is and has been one of the most urgent threats facing the earth today. More specifically, Global Warming is not a threat for the future but a present reality.

Can you imagine what the world will look like or be if we do not act now?

Every country today, including Jamaica, has become even more conscious of their surroundings. This has brought a world-wide cohesion with countries making every effort to slow down, stop or even reverse the depletion of the environment; one specific ban is that of plastic bags.

In the United States, most of the supermarkets and other retailers have already transitioned from the distribution of plastic bags to consumers, issuing paper bags or reusable bags which are purchased. Likewise, in the United Kingdom, consumers are either forced to bring their own bags, carry their goods in their hand or pay 0.10 GBp (10 pence) or sometimes even 0.20 GBp for a plastic bag.

We see here that the trend in these countries does not fully ban the use, but only deters consumers from their usage because of the cost associated. However, effective January 1, 2019, the Jamaican government will ban the use of plastic altogether and will charge any company if they are caught using it.

What does this mean?

Plastics have always been the cheaper and more convenient packaging option. Persons would not only be able to take their groceries in loads but later be used as garbage bags. This ban will both hurt retailers as well as consumers. Companies will now have to source an alternative way to package their products (usually more expensive than plastic) and therefore, as the company’s expense increases, so too do the cost of the items to consumers.

On the other hand, changing for the better sometimes costs you more. Companies or individuals can take this change as a market opportunity to provide alternative packaging, valued at around JMD 3 Billion. In the 60’s and 70’s, most of the bags that were being used were of paper material.

Jamaica Packaging Industries Limited (JPI) is wondering whether the country will revert to using same; the company already conducts the importation of paper bags from Latin America in small quantities and is looking to increase the supply due to the projected level of demand. Similarly, our well-known junior market packaging company AMG Packaging & Paper Company [JSE: AMG] is also doing their research and feasibility study.

Plastic bags not only pollute our water and land, but they are harmful to wildlife, marine life, human health and is very costly to remove from the environment. This ban can be the source of saving money, energy and building businesses, which will, in turn, boost our economy.

 

 

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

Follow us on Facebook, LinkedIn and Twitter please leave us a review.

Investors are craving and anticipating influential marijuana companies that are listed on the stock exchange or are planning to sell their shares via an Initial Public Offering.

This surge may be due to the big day October 17, 2018. October 17th is not only Ziggy Marley’s, son of reggae icon Bob Marley, birthday but also marks the day Canada will legalise recreational marijuana for purchase and consumption to Canadians age 18 and over.

Naturally, there will be limitations to this bill, such as the amount you can possess or grow at home. However, this action represents a shift how weed is perceived as well as an exciting stock market journey, which will lead to further growth and development for the country.

The news of the Great White North’s intentions to legalise cannabis for recreational purposes broadcasted in late June. This resulted in a significant advancement in stock prices for major companies in Canada such as Canopy Growth Corporation [TSE: WEED], Aphria Inc [TSE: APH] and Cronos  Group Inc [TSE: CRON]. WEED has increased its stock price by 35%, APH 36% and CRON 52 % since the word began spreading of the legalisation to come.

Canopy Growth Corporation had extended an arm on the New York Stock Exchange [NYSE: CGC] in May 2018. This too popped 15% and is now trading at US$49.09. This increase may also be due to the brewers of Corona, one of the top selling beers in the world, announcing going big with its stake in Canopy Growth Corp. by an additional 4 billion USD!

Undoubtedly a stock to watch.

Aphria Inc has announced that it will be acquiring all ordinary shares of LATAM Holdings Inc, a company owning cannabis licenses and assets in Jamaica, Colombia and Argentina. This will increase the value of Aphria with now a more diversified approach in cultivating the herb internationally.

Marijuana in Jamaica typically known as ‘ganja’ is a popular element of the Rastafarian culture and is legal to be used for religious practices. Ganja has been legalised for medicinal uses in the country and has since many companies emerging and taking up the opportunity to cultivate this intriguing plant. Popular companies such as Kaya Herb House, a tourist attraction for the viewing and partaking of all things ganja as well as Medicanja, medicinal marijuana firm which is planning on going public on the Jamaica Stock Exchange [JSE] very soon.

While investing in cannabis stocks may be attractive to the more aggressive or the lovers of the herb.

A few may question, how long will this “high” last on the overly hyped marijuana industry?

 

 

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

Follow us on Facebook, LinkedIn and Twitter please leave us a review.

Apple Inc [NASDAQ: AAPL], is one of the leading technology companies listed on the U.S market. The $1 trillion company is renowned for its robust data protection software, and innovative techniques which keep consumers who are edging for the latest gadgets happy, but what does this trillion milestone mean for loyal consumers?

Investors who purchased AAPL shares five years ago would have experienced an average of 229% return on investment! A value, which outweighs the cost of anxiously awaiting the next release of a new product and then cashing out hundreds to finance the purchase.

“Life is easier with an iPhone” is just one of the selling points of Apple. Users commend the robust privacy protection software, responsive updates to annoying glitches, user-friendly experience and sleek, cutting-edge designs, that the company continues to focus on.

Apple Inc is in the race to continue supplying millennials and with competitors like Microsoft, Google or Samsung, who are just as focused on creating futuristic technology, the markets can quickly shift from one player to the next.

Why not invest in a $1 Trillion company that will reap returns, pay dividends, brand loyalty? In comparison to the starting price of US$ 999 for the newly released iPhone X, the stock last traded at $232.02 on October 3, 2018; a mere fraction of what it costs to be a shareholder in the company.

Though not the 1st company to hit a $1 Trillion market capitalisation, the conversation is now, how prepared is the company to continuously invest in research and development?

Note that past results are not a determinant of future performance. However, a slow-down in the growth of the smartphone market-Apple’s highest income generator is not anticipated any time soon. Apple has displayed its resilience to change and is no doubt a stock to keep for the future.

As we await 2019’s release of more high-end gadgets and software that improves and continue to prove Iphone’s commitment to making life more comfortable; whether as an investor or as a loyal customer, there is a benefit to look forward to.

 

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

Follow us on Facebook, LinkedIn and Twitter please leave us a review.

Whether you call it a business cycle or an economic cycle you’ve undoubtedly heard the term “recession” before. It’s usually followed by the looks of sheer panic and horror stories of people losing everything. The financial crisis of 2008 is still fresh in the memories of many investors, and with a 10-year bull market coming to an end, investors are looking to mitigate the effects of a bear market and dare I say a recession.

Market indicators are signalling that a change in the global market is coming soon as the stock market skyrockets, interest rates, employment and inflation all on the rise.

Is it possible to gain during a market downturn?

Yes.

 

Let’s discuss a few tactics that have been tested and proven to work during a recession:

Update Your Asset Allocation

Investors should complete an investment policy statement (IPS) when opening an investment account, if not, you should fire your advisor immediately.

An IPS speaks to your preferred asset allocation, the problem is, it is often forgotten and not updated based on market conditions, changes in risk tolerance and goals. This can be detrimental during a recession as your 50-50 split of bonds to equities can cost you.

Right now, asset managers and advisors are recommending clients shift from active to passive investing (Funds/ETFs) as well as going overweight in equities versus bonds. This type of strategy focuses on capital preservation as the Feds increases rates and quantitative easing continues. Failing to adapt, investors may soon face the harsh realities of an unforgiving market.

 

Investing in “Recession Proof” Stocks

When a recession shakes the economy, people are often caught off guard, leading to knee-jerk emotional reactions.

“Sell Everything!”

The trick is to buy into companies with diversified revenue streams and a reputation of stable performance during these less than stellar market conditions. Bank of Nova Scotia [NYSE: BNS] has never missed a payment in 45 consecutive quarters; discount retailer Walmart Inc [NYSE: WMT] saw steady growth in 2007 and continues to outperform the industry 10 years later. Industries such as utilities & healthcare may not see as much capital appreciation but are classified as portfolio stabilisers simply because you can’t live without them.

 

Go Real Estate

Falling home prices during a recession is nothing new. Now buying a property during a recession is not a good practice if you are looking short term as interest and unemployment rates are high, and market sentiments are low.

You may get your dream home at an unimaginably low cost, but the question is how low can prices go?  Markets can take on average 2-10 years to recover from a recession but once it does the value of these undervalued/foreclosed homes should increase, thus making you profitable.

 

Timing Is Everything

Recessions happen after the peak phase of the business cycle. You can identify a peak based on favourable market sentiments, stock prices upswing, growth in GDP and earnings creating financial bubbles.

This is followed by an economic downturn. GDP growth falls, massive layoffs and we enter a bear market. In 2008, the markets contracted 2.4% in Q1, rebounded in Q2 and plummeted in Q4 by 8.5%, but wait there’s more. In 2009, the markets dropped by another 5%, and unemployment reached double digits.

 

Recessions are a natural part of any market and should be greeted without fear. Despite the news during the 2007-2009 period, there were many winners in the stock market game, these investors positioned their portfolio to benefit from the trough and come out on top.

 

Will that be you?

 

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

Follow us on Facebook, LinkedIn and Twitter please leave us a review.

Since Facebook (FB: NASDAQ) acquired Instagram in 2012 for $715 million, founders Kevin Systrom and Mike Krieger had stuck around keeping the brand and product independent of Facebook while relying on its resources and engineering talents to help it grow.

Systrom and Krieger say peace out to Mark Zuckerberg.

According to Bloomberg, the departure was prompted by the founders’ frustration over the direction of the photo-sharing app as Zuckerberg has become more involved with the day-to-day activities of the company.

You might be wondering, doesn’t this sound familiar?

It is.

WhatsApp’s founders Brian Acton and Jan Koum, departed in a similar manner after disagreements with Zuckerberg over the business model of the app and data privacy which FB seems to have a major problem with. Since their departure, Facebook had enforced some changes to the terms of service of WhatsApp, giving FB access to users’ phone numbers. Furthermore, it had advocated for unified profiles that allow for ad targeting and data mining. These changes may have led some Instagram employees to wonder that something similar will happen to their group and it seems their concern is now a reality!

With over 1 billion users monthly, Facebook has relied on Instagram as its main source of advertising revenue in addition to its own news feed.

Many may ask though, what does this mean for the future of Instagram?

For one, it could possibly be integrated into Facebook losing its independence and becoming another product division and two, it may lose its credibility as FB is continuously causing worry over its privacy scandals, fake news and election interference.

While Facebook has been around longer than Instagram with over 42.2 billion users, it is becoming more dependent on the younger and favourable ‘Gram’ which offers an attractive escape to a younger cohort of users who are wary of the political debates and privacy scandal.

Today, millennials are more vigilant about protecting their online footprints and as such is losing interest in FB while gravitating towards the great benefits of disappearing stories, encrypted data and more.

In the end, the departure of Systrom and Krieger gives Mark Zuckerberg the opportunity to take charge of Instagram directly. With this freedom, he must know how many changes to make without compromising the integrity and value of Instagram’s less tarnished brand.

 

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

Follow us on Facebook, LinkedIn and Twitter please leave us a review.