The UK votes on EU membership

David Cameron, current Prime Minister of the UK, renegotiated the terms of the UK’s membership in the EU before a referendum to determine whether the country should remain in the EU or not. The referendum is set for 23rd June 2016. There are various opinions in favour of or against the UK leaving the EU (Brexit), ranging from reduced spending on immigration to economic uncertainty which might lead to loss of jobs.

In quantitative terms various researchers predicted that the UK could suffer a drop in GDP of 6.3% to 9.5% in line with what occurred in the 2008 crisis, even if a Free Trade Agreement were to be successfully negotiated with the EU.

Major critics state that leaving the EU would impose costs on the UK economy and as such it would be a gamble. In his book ‘The Trouble with Europe’ Roger Bootle, a British economist for the Daily Telegraph, says it is not ideal to base Brexit on UK-to-EU contributions.

In the job sector, former liberal democrat leader Nick Clegg argues that three million jobs depend on EU membership. Membership is said to award the UK with bigger market access of more than 500 million customers as Britain’s current state attracts a lot of foreign firms looking to be part of that market. Therefore, a Brexit would open the exit door for big companies resulting in huge job losses. This view was also shared by some big companies who took a stand on the Brexit scenario. However, this argument was challenged by the Institute of Economic Affairs who argued that jobs are not merely associated with political unionisation but also with trade agreements.

It is also worth mentioning the position taken by two of the country’s big industries: the automotive and the financial services industry.

The Society of Motor Manufacturers and Traders (SMMT) argued that EU membership is fundamental to the success of the UK automotive industry where more than 700 thousand people are employed representing 3% of GDP, a figure that was also confirmed by KPMG.

The financial services sector in the UK employs 160 thousand people with 250 foreign banks. Sir Gerry Grimstone, former chairman  of the lobby group TheCityUK, says that research shows that a Brexit will seriously damage economic growth in the UK whilst also stating that the EU must improve. Furthermore, the group says that London is Europe’s top financial centre and it is in the national interest to support it.

If we further explore the sentiment of a looming Brexit vote we will find a lot of uncertainty and that is not healthy for the economy, in fact this was evidenced in the GBP exchange rate which lost 6.5% against the EUR, 7% against the USD and 15% against the JPY within the last few months. Further pressure is expected to mount if a ‘leave’ vote wins.

The IMF is quoted as saying that uncertainty is bad and no economic player likes uncertainty which will lead to reduced investment and a lack of jobs meaning that uncertainty impacts investment decisions. Betting companies are indicating that a vote to leave is unlikely as voters tend to vote for the status quo.

Finally for UK companies that export to the EU (and vice versa) a Brexit will create a lot of uncertainty resulting in volatility, at least until the terms of future trading become clear apart from the time needed for people to get used to them. In order to prevent disruption to the trade flows on which the British economy has come to depend, the country must negotiate agreements with EU and non-EU countries including the US, India, China, Japan and Australia, mainly because trade with these and many other countries are currently governed by agreements struck with the European bloc.

 


 

Il vot tal-UK ghal membership fl-EU

David Cameron, il-Prim Ministru Ingliż, innegozja mill-ġdid it-termini tas-sħubija tar-Renju Unit fl-Unjoni Ewropea qabel ir-referendum tat-23 ta’ Ġunju 2016 li se jiddetermina jekk il-pajjiż għandux jibqa’ membru tal-Unjoni jew le. Hemm diversi opinjonijiet favur u kontra l-ħruġ tal-Ingilterra jew aħjar ir-Renju Unit mill-Unjoni Ewropea. Biex nagħtu stampa aktar ċara, dawn l-opinjonijiet ivarjaw mit-tnaqqis fin-nefqa fuq l-immigrazzjoni għall-inċertezza ekonomika li tista’ twassal għat-telf ta’ impjiegi.

F’termini kwantitattivi diversi riċerkaturi qed ibassru li l-Ingilterra tista’ ssofri minn tnaqqis fid-dħul ta’ bejn 6.3% u 9.5% tal-Prodott Domestiku Gross (bl-Ingliż il-GDP) bħalma ġara fil-kriżi tal-2008, anke jekk Ftehim ta’ Negozju Ħieles jiġi negozjat b’suċċess mal-Unjoni Ewropea fil-futur.

Kritiċi ewlenin jistqarru li jekk ir-Renju Unit joħroġ mill-Unjoni Ewropea se jkun hemm aktar spejjeż fl-ekonomija Ingliża ,u għalhekk, din tkun ta’ riskju. Fil-ktieb tiegħu ‘The Trouble with Europe’, Roger Bootle, ekonomista Ingliż għad-Daily Telegraph, jgħid li mhux ideali li l-kwistjoni tal-Brexit (jiġifieri, il-ħruġ tal-Gran Brittanja mill-Unjoni Ewropea) tkun ibbażata fuq il-kontribuzzjonijiet li tagħmel l-Ingilterra lill-Unjoni Ewropea.

Fis-settur tal-impjiegi Nick Clegg, il-mexxej preċedenti tad-Demokratiċi Liberali, jargumenta li tliet miljun impjieg jiddependu mis-sħubija fl-Unjoni Ewropea. Jingħad li s-sħubija tippremja lill-Ingilterra b’aċċess għal suq akbar, ta’ aktar minn 500 miljun klijent. L-istat attwali tal-Ingilterra jattira ħafna kumpaniji barranin biex ikunu parti minn dan is-suq. Għalhekk, il-ħruġ ‘il barra tar-Renju Unit jiftaħ il-bieb biex kumpaniji kbar jitilqu u dan iwassal għal telf kbir ta’ impjiegi. Dan il-ħsieb kien espress ukoll minn xi kumpaniji kbar li ħadu pożizzjoni fuq il-kwistjoni tal-Brexit. Imma dan l-argument ġie kkontestat mill-Istitut tal-Affarijiet Ekonomiċi li sfida din l-allegazzjoni li l-impjiegi mhumiex biss assoċjati ma’ unjoni politika imma wkoll ma’ ftehim ta’ negozju (li bl-Ingliż ngħidulhom trade agreements).

Jixraq li nsemmu wkoll il-pożizzjonijiet li ħadu żewġ industriji kbar tal-pajjiż, dawk tas- settur finanżjarju u ta’ l-industrija tal- karozzi.

Is-soċjetà tad-dealers u tal-manifattura tal-karozzi (magħrufa bħala SMMT) qed targumenta li s-sħubija fl-Unjoni Ewropea hi fundamentali għas-suċċess tal-industrija tal-karozzi fir-Renju Unit. Din timpjega aktar minn 700 elf persuna, jiġifieri 3% tal-Prodott Domestiku Gross, ċifra li kienet konfermata wkoll mid-ditta magħrufa tal-awdituri, KPMG.

Fis-settur tas-servizzi finanzjarji, ir-Renju Unit jimpjega aktar minn 160 elf persuna li wħud minnhom jaħdmu f’250 bank barrani. Iċ-Chairman preċedenti tal-grupp TheCityUK, Sir Gerry Grimstone, dan l-aħħar qal li r-riċerka turi li Brexit tkun ta’ ħsara serja għat-tkabbir ekonomiku fir-Renju Unit u fl-istess ħin qal ukoll li l- Unjoni Ewropea teħtieġ tagħmel titjib. Barra minn hekk, il-grupp qed jgħid ukoll li Londra hi l-aqwa ċentru finanzjarju fl-Ewropa u għalhekk huwa fl-interess nazzjonali li tingħata l-appoġġ meħtieġ.

Jekk nesploraw aktar is-sentiment elettorali fuq il-kwistjoni tal-Brexit insibu li hemm ħafna inċertezzi u li dawn ma jaffettwawx l-ekonomija b’mod pożittiv. Fil-fatt, din l-evidenza ħarġet fir-rata tal-kambju tal-lira sterlina (GBP) meta mqabbla ma’ muniti oħra, li dan l-aħħar tilfet 6.5% fil-valur tagħha meta mqabbla mal-ewro, 7% meta mqabbla mad-dollaru Amerikan u 15% meta mqabbla mal-yen Ġappuniż, u dan kollu f’temp ta ftit xhur. Il-pressjoni mistennija tikber jekk jirbaħ il-vot tal-‘ħruġ’ mill-Unjoni Ewropea.

Il-Fond Monetarju Internazzjonali (l-IMF) jqis li l-inċertezza hi ħażina u l-ebda parti interessata ma tkun tixtieq sitwazzjoni inċerta għax din twassal għal tnaqqis fl-investiment u għal nuqqas ta’ impjiegi. L-inċertezza tħalli impatt negattiv fuq id-deċiżjonijiet marbuta ma’ investiment ġdid. Il-kumpaniji tal-imħatri qed jindikaw li li l-vot favur il-‘ħruġ’ aktarx ma jirbaħx għax il-votanti jagħżlu li jivvutaw għal status quo, biex l-affarijiet jibqgħu kif inhuma.

Il-ħruġ mill-Unjoni Ewropea joħloq inċertezza kbira għall-kumpaniji Brittaniċi li jesportaw fl-Unjoni Ewropea (u bil-maqlub). Dan iwassal għal instabbiltà inċertezza u volatilita’, tal-anqas sakemm ikunu ċari t-termini tal-ftehim ta’ negozju għall-ġejjieni u l-ħin meħtieġ min-nies biex jidrawhom. Fl-aħħar nett, biex jiġi evitat tħarbit fil-kummerċ li fuqu l-ekonomija Brittanika saret tiddependi, il-pajjiż jeħtieġlu jinnegozja ftehimiet mal-Unjoni Ewropea u ma’ pajjiżi oħra barra mill-Unjoni Ewropea, bħal mhuma l-Istati Uniti, l-Indja, iċ-Ċina, il-Ġappun u l-Awstralja, għaliex dawn tal-aħħar, u ħafna pajjiżi oħra, bħalissa huma mmexxija minn ftehimiet li għandhom diġa mal-blokk Ewropew. 

Should you sell or hold your mutual funds in a bear market?

As an investor, you know the stock market is cyclical. But intellectually understanding that bull markets are followed by bear markets is not the same as actually living through
a Wall Street crash and watching the value of your portfolio decline, sometimes sharply.

That’s when a mutual fund investor’s discipline and patience can get tested, but also rewarded over time, as the performance of the best mutual funds prove.

The 2008 bear market was a prime example. Following a powerful bull cycle that began in March 2003, the financial and housing crisis triggered a downturn that saw the S&P 500
decline 58% from the peak in October 2007 to the bottom in March 2009.

The top-performing stocks in the prior bull market suffered similar fates. Apple fell
61% from the end of December 2007 through January 2009, while Google, now known as Alphabet,
lost 67% of its value from November 2007 until finding its footing in November 2008.

Mutual Funds vs Stocks

When you buy and sell individual stocks, you are your own fund manager. It’s up to you to actively manage risk and reduce your exposure in a market downturn since the
leaders in the prior bull cycle typically do not bounce back to lead in the next one.

However when you invest in mutual funds, you’re relying on a professional fund manager to oversee and adjust the portfolio as needed over time. So when investing in a fund
to achieve a long-term goal, such as retirement or university savings for a young child, your best bet is to buy right and sit tight.

As the founder of the influential International Business Daily, William J. O’Neil wrote in his classic book ‘How To Make Money In Stocks’: “A well-selected, diversified
growth-stock fund run by a well-established management organization will, in time, always recover from the steep corrections that naturally occur during bear markets.
The reason mutual funds come back is that they are broadly diversified and generally participate in each recovery cycle in the economy.”

Looking at the 10-year returns of the top five growth funds from 2006 to 2015 proves this point. As you would expect in a severe bear market, even these long-term, top-performing
funds showed a decline in 2008 – from 25% to 46%. However, investors who sat tight in 2008 saw overall gains of 205% to 240% from 2006 to 2015, more than making up for the 2008
decline and more than doubling the S&P 500’s 102% rise during the same period.

Check the fund’s long-term performance before investing

As a fund’s prospectus always says, past performance is not a guarantee of future results. But checking a mutual fund’s long-term track record – through both bull and bear
markets – gives you insight into the management team’s ability to manage risk whilst also generating growth.

In an interview with the Investor’s Business Daily William Bell, one of the top Fund Managers in the US said, “We prepare for a bear market before it happens. … Our entire
process is basically built around finding companies that are going to grow at an above-average rate, but also provide a lot of downside protection when things fall apart.”

Bell added that he looks for stocks that have a “counter-cyclical component” to them. Key to that is checking the company’s long-term earnings record, particularly during weak
economies.

“If a company is able to grow through a recession,” Bell said, “we have pretty good confidence that the stock is also going to do better than the rest of the
market during a recession.”

The strategy of Bell and his co-managers and their focus on so-called “steady-Eddie” companies is reminiscent of a certain legendary investor. “If you look at what we do,” Bell
noted, “it’s almost exactly what Warren Buffett does, just in the small- and mid-cap space.”

Cost averaging helps manage risk and maximise long-term gains

Cost averaging – i.e., regularly investing a set amount of money in a mutual
fund regardless of market conditions – can be an effective way for investors to protect themselves against market fluctuations. Rather than trying to time the market, you increase
your holdings incrementally, typically on a regular basis, whether monthly, quarterly or at your preferred frequency. Thus, during a bear market, you’re buying shares in the
fund at a lower price, helping to hold down your average cost-per-share and increase your returns over time.

 

This article has been sourced from the article Guide to Your Financial Education, found on our international partner, Morningstar website, as a guide to provide readers with
useful information to improve their knowledge of investments, though it does not constitute and should not be treated as investment advice.

 


 

F’suq bl-ishma niżlin (bear market) għandek tbigħ jew iżżomm il-mutual funds tiegħek?

Bħala investituri, aħna lkoll nafu li s-suq tal-istocks jew tal-ishma jaħdem bħal ċiklu. Imma filwaqt li rridu nifhmu li wara li s-swieq jitilgħu dawn xi darba jridu jinżlu,
mhuwiex l-istess bħal meta wieħed jgħaddi minn riċessjoni f’Wall Street (li huwa d-distrett finanzjarju fi New York) hu stess, meta jara l-valur tal-portafoll tiegħu jaqa’,
kultant b’ammont sostanzjali.

Huwa f’dan il-mument diffiċli li l-bniedem li jkun investa fi mutual fund juri x’dixxiplina u paċenzja għandu – imma wkoll jista’ jkun li jiġi ppremjat fuq medda
taż-żmien, kif juru r-riżultati tal-aħjar mutual funds.

Il-bear market tal-2008, meta l-ishma kienu niżlin, huwa eżempju tajjeb. Wara perjodu b’saħħtu, li beda f’Marzu tal-2003 (magħruf bħala ‘bull market’), li matulu
l-ishma bdew tilgħin, il-kriżi finanzjarja u tal-propjetà wasslet biex l-ishma tal-S&P 500 jinżlu 58% mill-ogħla valur tagħhom f’Ottubru tal-2007 għall-aktar
livell baxx, f’Marzu tal-2009.

L-aktar stocks li kienu sejrin tajjeb ġralhom l-istess ħaġa. L-Apple, per
eżempju, niżlu 61% bejn l-aħħar ta’ Diċembru tal-2007 sa Jannar tal-2009, filwaqt li Google,
il-kumpanija magħrufa wkoll bħala Alphabet Incorporated, tilfet 67% mill-valur minn Novembru tal-2007 sakemm reġgħet sabet saqajha f’Novembru tal-2008.

Il-mutual funds imqabbla mal-istocks

Meta nixtru u nbigħu stocks jew ishma individwali, inkunu qisna l-‘fund manager’ bi flusna stess. Huwa f’idejna biex naraw jekk irridux nieħdu riskju b’mod attiv u
anke jekk innaqqsux l-investiment tagħna f’suq li jkun nieżel għaliex l-istocks li jkunu sejrin tajjeb meta ċ-ċiklu jkun b’saħħtu ġeneralment ma jerġgħux ikunu l-istess
ishma li jkunu b’saħħithom fiċ-ċiklu ta’ wara jew aħjar meta jerġa’ jkun hemm bull market.

Imma meta ninvestu fi mutual funds inkunu qed inserrħu fuq fund managerprofessjonali biex jaralna u jaġġusta l-portafoll tagħna hu, kif ikun meħtieġ, fuq perjodu
ta’ żmien.

Għalhekk, meta ninvestu fi mutual fund biex nilħqu l-għan fit-tul li jkollna, ngħidu aħna għal meta nirtiraw jew biex infaddlu l-flus għal uliedna għal meta jikbru u
jidħlu l-università, l-aktar ħaġa importanti hi li tixtri fuq rakkomandazzjoni tajba u tħalli ż-żmien jgħaddi.

Bħalma kiteb il-fundatur tal-ġurnal influwenti Investor’s Business Daily, William J. O’Neil fil-ktieb klassiku tiegħu, “How To Make Money In Stocks”: “Fund tal-ishma
magħżul tajjeb, b’tema ta’ tkabbir u diversifikat, immexxi minn organizzazzjoni finanzjarja stabbilita, maż-żmien dejjem jirkupra mill-korrezzjonijiet iebsa li jseħħu, b’mod
naturali, meta s-swieq jinżlu. Il-mutual funds jerġgħu jirkupraw għax huma diversifikati ħafna u, ġeneralment, ikunu parti minn kull ċiklu ta’ rkuprar tal-ekonomija”.

Kif tista’ tistenna f’bear market jew suq li qed jaqa’ b’mod qawwi, anke dawn il-funds ta’ kwalita’ għolja u li jkollhom ħarsa ‘l quddiem fit-tul waqgħu sew
fl-2008 – bejn 25% u 46%.

Pero meta tara d-dħul kumulattiv fuq medda ta’ għaxar snin investituri li ma ppanikkjawx u żammew l-investiment tagħhom raw żieda fil-valur
ta’ bejn 205% sa 240% mill-2006 sal-2015, li patta ħafna aktar mit-telf li kienu sofrew fl-2008 u li hu aktar mid-doppju mill-102% li għamel l-indiċi S&P 500 fl-istess
perjodu.

Iċċekkja r-riżultati fit-tul tal-fund qabel ma tinvesti

Kif jgħid dejjem il-prospett ta’ kull fund, il-passat mhux garanzija tal-futur. Imma meta niċċekkjaw it-track record fit-tul ta’ mutual fund – f’kull żmien,
kemm meta s-swieq jitilgħu u kemm meta jinżlu – ikollna idea aħjar tal-ħila tal-immaniġġjar tat-tim finanzjarju tal-fund biex jimmaniġġja r-riskju u jiġġenera d-dħul.

F’intervista li kellu William Bell, wieħed mill-aqwa fund managers Amerikani, mal-Investor’s Business Daily, hu qal li: “Aħna rridu nħejju ruħna għal meta s-suq jinżel
minn qabel ma jibda nieżel. … Il-proċess sħiħ tagħna huwa, bażikament, mibni fuq li nfittxu nsibu kumpaniji li naħsbu li se jkunu jikbru b’rata ’l fuq mill-medja, imma nipprovdu
wkoll ħafna protezzjoni għall-investituri tagħna għal meta jew jekk is-swieq imorru ħażin.”

Bell żied jgħid li hu jfittex stocks li għandhom “komponent li jaħdem kontra ċ-ċiklu” għall-investituri tiegħu. Dan jagħmlu billi jiċċekkja r-rekord tal-qligħ fit-tul ta’
kumpanija, b’mod partikolari fiż-żmien meta l-ekonomija tkun sejra ħażin. Qal ukoll li: “Jekk kumpanija jirnexxilha tikber f’riċessjoni, għandna nkunu kunfidenti
li l-istock tagħha wkoll ikun se jmur tajjeb mill-bqija tas-suq matul ir-riċessjoni.”

L-istrateġija ta’ William Bell u l-managers ta’ miegħu u l-attenzjoni partikolari tagħhom għal kumpaniji magħrufa bil-laqam “steady-Eddie”, jiġifieri sodi, ifakkarna
fl-investitur leġġendarju – Warren Buffett. Bell qal “jekk tħares x’nagħmlu aħna nagħmlu hu eżatt dak li jagħmel Warren Buffett, pero f’kumpaniji ta’ daqs żgħir u medju.”

Il-cost averaging jgħinna nimmaniġġjaw ir-riskju u nkabbru d-dħul fit-tul

It-terminu “cost averaging” ifisser meta ninvestu b’mod regolari ammont fiss ta’ flus
fimutual fund irrispettivament mill-kundizzjonijiet tas-suq. Dan jista’ jkun mod effettiv għall-investituri kif iħarsu ruħhom mill-instabilità u ċ-ċaqliq fis-swieq.

Aktar milli nippruvaw inbassru meta jkun se jinżel u jitla’ s-suq, inżidu l-assi finanzjarji tagħna bil-mod, fuq bażi regolari, ngħidu aħna kull xahar, kull tliet xhur jew skont i
l-preferenza tagħna.

Għalhekk, meta s-suq jinżel, inkunu qed nixtru l-ishma bi prezz aktar baxx milli nkunu għamilna qabel u b’hekk inkunu qed inżommu l-ispiża medja ta’ kull sehem aktar baxx apparti
li nkunu qed inżidu d-dħul tagħna maż-żmien.

 

It-tagħrif li imsemmi hawn fuq ġej mingħand l-imsieħeb internazzjonali tagħna, Morningstar u mis-sit elettroniku tagħhom. Fit-taqsima Guide to Your Financial Education tingħata
gwida b’informazzjoni utli kif inżidu l-għarfien tagħna dwar l-investimenti, għalkemm dan ma jikkostitwixxix u mghandhux jiġi ttrattat bħala parir dwar l-investimenti.

The UK votes on EU membership

David Cameron, current Prime Minister of the UK, renegotiated the terms of the UK’s membership in the EU before a referendum to determine whether the country should remain in the EU or not. The referendum is set for 23rd June 2016. There are various opinions in favour of or against the UK leaving the EU (Brexit), ranging from reduced spending on immigration to economic uncertainty which might lead to loss of jobs.

In quantitative terms various researchers predicted that the UK could suffer a drop in GDP of 6.3% to 9.5% in line with what occurred in the 2008 crisis, even if a Free Trade Agreement were to be successfully negotiated with the EU.

Major critics state that leaving the EU would impose costs on the UK economy and as such it would be a gamble. In his book ‘The Trouble with Europe’ Roger Bootle, a British economist for the Daily Telegraph, says it is not ideal to base Brexit on UK-to-EU contributions.

In the job sector, former liberal democrat leader Nick Clegg argues that three million jobs depend on EU membership. Membership is said to award the UK with bigger market access of more than 500 million customers as Britain’s current state attracts a lot of foreign firms looking to be part of that market. Therefore, a Brexit would open the exit door for big companies resulting in huge job losses. This view was also shared by some big companies who took a stand on the Brexit scenario. However, this argument was challenged by the Institute of Economic Affairs who argued that jobs are not merely associated with political unionisation but also with trade agreements.

It is also worth mentioning the position taken by two of the country’s big industries: the automotive and the financial services industry.

The Society of Motor Manufacturers and Traders (SMMT) argued that EU membership is fundamental to the success of the UK automotive industry where more than 700 thousand people are employed representing 3% of GDP, a figure that was also confirmed by KPMG.

The financial services sector in the UK employs 160 thousand people with 250 foreign banks. Sir Gerry Grimstone, former chairman  of the lobby group TheCityUK, says that research shows that a Brexit will seriously damage economic growth in the UK whilst also stating that the EU must improve. Furthermore, the group says that London is Europe’s top financial centre and it is in the national interest to support it.

If we further explore the sentiment of a looming Brexit vote we will find a lot of uncertainty and that is not healthy for the economy, in fact this was evidenced in the GBP exchange rate which lost 6.5% against the EUR, 7% against the USD and 15% against the JPY within the last few months. Further pressure is expected to mount if a ‘leave’ vote wins.

The IMF is quoted as saying that uncertainty is bad and no economic player likes uncertainty which will lead to reduced investment and a lack of jobs meaning that uncertainty impacts investment decisions. Betting companies are indicating that a vote to leave is unlikely as voters tend to vote for the status quo.

Finally for UK companies that export to the EU (and vice versa) a Brexit will create a lot of uncertainty resulting in volatility, at least until the terms of future trading become clear apart from the time needed for people to get used to them. In order to prevent disruption to the trade flows on which the British economy has come to depend, the country must negotiate agreements with EU and non-EU countries including the US, India, China, Japan and Australia, mainly because trade with these and many other countries are currently governed by agreements struck with the European bloc.

 


 

Il vot tal-UK ghal membership fl-EU

David Cameron, il-Prim Ministru Ingliż, innegozja mill-ġdid it-termini tas-sħubija tar-Renju Unit fl-Unjoni Ewropea qabel ir-referendum tat-23 ta’ Ġunju 2016 li se jiddetermina jekk il-pajjiż għandux jibqa’ membru tal-Unjoni jew le. Hemm diversi opinjonijiet favur u kontra l-ħruġ tal-Ingilterra jew aħjar ir-Renju Unit mill-Unjoni Ewropea. Biex nagħtu stampa aktar ċara, dawn l-opinjonijiet ivarjaw mit-tnaqqis fin-nefqa fuq l-immigrazzjoni għall-inċertezza ekonomika li tista’ twassal għat-telf ta’ impjiegi.

F’termini kwantitattivi diversi riċerkaturi qed ibassru li l-Ingilterra tista’ ssofri minn tnaqqis fid-dħul ta’ bejn 6.3% u 9.5% tal-Prodott Domestiku Gross (bl-Ingliż il-GDP) bħalma ġara fil-kriżi tal-2008, anke jekk Ftehim ta’ Negozju Ħieles jiġi negozjat b’suċċess mal-Unjoni Ewropea fil-futur.

Kritiċi ewlenin jistqarru li jekk ir-Renju Unit joħroġ mill-Unjoni Ewropea se jkun hemm aktar spejjeż fl-ekonomija Ingliża ,u għalhekk, din tkun ta’ riskju. Fil-ktieb tiegħu ‘The Trouble with Europe’, Roger Bootle, ekonomista Ingliż għad-Daily Telegraph, jgħid li mhux ideali li l-kwistjoni tal-Brexit (jiġifieri, il-ħruġ tal-Gran Brittanja mill-Unjoni Ewropea) tkun ibbażata fuq il-kontribuzzjonijiet li tagħmel l-Ingilterra lill-Unjoni Ewropea.

Fis-settur tal-impjiegi Nick Clegg, il-mexxej preċedenti tad-Demokratiċi Liberali, jargumenta li tliet miljun impjieg jiddependu mis-sħubija fl-Unjoni Ewropea. Jingħad li s-sħubija tippremja lill-Ingilterra b’aċċess għal suq akbar, ta’ aktar minn 500 miljun klijent. L-istat attwali tal-Ingilterra jattira ħafna kumpaniji barranin biex ikunu parti minn dan is-suq. Għalhekk, il-ħruġ ‘il barra tar-Renju Unit jiftaħ il-bieb biex kumpaniji kbar jitilqu u dan iwassal għal telf kbir ta’ impjiegi. Dan il-ħsieb kien espress ukoll minn xi kumpaniji kbar li ħadu pożizzjoni fuq il-kwistjoni tal-Brexit. Imma dan l-argument ġie kkontestat mill-Istitut tal-Affarijiet Ekonomiċi li sfida din l-allegazzjoni li l-impjiegi mhumiex biss assoċjati ma’ unjoni politika imma wkoll ma’ ftehim ta’ negozju (li bl-Ingliż ngħidulhom trade agreements).

Jixraq li nsemmu wkoll il-pożizzjonijiet li ħadu żewġ industriji kbar tal-pajjiż, dawk tas- settur finanżjarju u ta’ l-industrija tal- karozzi.

Is-soċjetà tad-dealers u tal-manifattura tal-karozzi (magħrufa bħala SMMT) qed targumenta li s-sħubija fl-Unjoni Ewropea hi fundamentali għas-suċċess tal-industrija tal-karozzi fir-Renju Unit. Din timpjega aktar minn 700 elf persuna, jiġifieri 3% tal-Prodott Domestiku Gross, ċifra li kienet konfermata wkoll mid-ditta magħrufa tal-awdituri, KPMG.

Fis-settur tas-servizzi finanzjarji, ir-Renju Unit jimpjega aktar minn 160 elf persuna li wħud minnhom jaħdmu f’250 bank barrani. Iċ-Chairman preċedenti tal-grupp TheCityUK, Sir Gerry Grimstone, dan l-aħħar qal li r-riċerka turi li Brexit tkun ta’ ħsara serja għat-tkabbir ekonomiku fir-Renju Unit u fl-istess ħin qal ukoll li l- Unjoni Ewropea teħtieġ tagħmel titjib. Barra minn hekk, il-grupp qed jgħid ukoll li Londra hi l-aqwa ċentru finanzjarju fl-Ewropa u għalhekk huwa fl-interess nazzjonali li tingħata l-appoġġ meħtieġ.

Jekk nesploraw aktar is-sentiment elettorali fuq il-kwistjoni tal-Brexit insibu li hemm ħafna inċertezzi u li dawn ma jaffettwawx l-ekonomija b’mod pożittiv. Fil-fatt, din l-evidenza ħarġet fir-rata tal-kambju tal-lira sterlina (GBP) meta mqabbla ma’ muniti oħra, li dan l-aħħar tilfet 6.5% fil-valur tagħha meta mqabbla mal-ewro, 7% meta mqabbla mad-dollaru Amerikan u 15% meta mqabbla mal-yen Ġappuniż, u dan kollu f’temp ta ftit xhur. Il-pressjoni mistennija tikber jekk jirbaħ il-vot tal-‘ħruġ’ mill-Unjoni Ewropea.

Il-Fond Monetarju Internazzjonali (l-IMF) jqis li l-inċertezza hi ħażina u l-ebda parti interessata ma tkun tixtieq sitwazzjoni inċerta għax din twassal għal tnaqqis fl-investiment u għal nuqqas ta’ impjiegi. L-inċertezza tħalli impatt negattiv fuq id-deċiżjonijiet marbuta ma’ investiment ġdid. Il-kumpaniji tal-imħatri qed jindikaw li li l-vot favur il-‘ħruġ’ aktarx ma jirbaħx għax il-votanti jagħżlu li jivvutaw għal status quo, biex l-affarijiet jibqgħu kif inhuma.

Il-ħruġ mill-Unjoni Ewropea joħloq inċertezza kbira għall-kumpaniji Brittaniċi li jesportaw fl-Unjoni Ewropea (u bil-maqlub). Dan iwassal għal instabbiltà inċertezza u volatilita’, tal-anqas sakemm ikunu ċari t-termini tal-ftehim ta’ negozju għall-ġejjieni u l-ħin meħtieġ min-nies biex jidrawhom. Fl-aħħar nett, biex jiġi evitat tħarbit fil-kummerċ li fuqu l-ekonomija Brittanika saret tiddependi, il-pajjiż jeħtieġlu jinnegozja ftehimiet mal-Unjoni Ewropea u ma’ pajjiżi oħra barra mill-Unjoni Ewropea, bħal mhuma l-Istati Uniti, l-Indja, iċ-Ċina, il-Ġappun u l-Awstralja, għaliex dawn tal-aħħar, u ħafna pajjiżi oħra, bħalissa huma mmexxija minn ftehimiet li għandhom diġa mal-blokk Ewropew. 

Should you sell or hold your mutual funds in a bear market?

As an investor, you know the stock market is cyclical. But intellectually understanding that bull markets are followed by bear markets is not the same as actually living through
a Wall Street crash and watching the value of your portfolio decline, sometimes sharply.

That’s when a mutual fund investor’s discipline and patience can get tested, but also rewarded over time, as the performance of the best mutual funds prove.

The 2008 bear market was a prime example. Following a powerful bull cycle that began in March 2003, the financial and housing crisis triggered a downturn that saw the S&P 500
decline 58% from the peak in October 2007 to the bottom in March 2009.

The top-performing stocks in the prior bull market suffered similar fates. Apple fell
61% from the end of December 2007 through January 2009, while Google, now known as Alphabet,
lost 67% of its value from November 2007 until finding its footing in November 2008.

Mutual Funds vs Stocks

When you buy and sell individual stocks, you are your own fund manager. It’s up to you to actively manage risk and reduce your exposure in a market downturn since the
leaders in the prior bull cycle typically do not bounce back to lead in the next one.

However when you invest in mutual funds, you’re relying on a professional fund manager to oversee and adjust the portfolio as needed over time. So when investing in a fund
to achieve a long-term goal, such as retirement or university savings for a young child, your best bet is to buy right and sit tight.

As the founder of the influential International Business Daily, William J. O’Neil wrote in his classic book ‘How To Make Money In Stocks’: “A well-selected, diversified
growth-stock fund run by a well-established management organization will, in time, always recover from the steep corrections that naturally occur during bear markets.
The reason mutual funds come back is that they are broadly diversified and generally participate in each recovery cycle in the economy.”

Looking at the 10-year returns of the top five growth funds from 2006 to 2015 proves this point. As you would expect in a severe bear market, even these long-term, top-performing
funds showed a decline in 2008 – from 25% to 46%. However, investors who sat tight in 2008 saw overall gains of 205% to 240% from 2006 to 2015, more than making up for the 2008
decline and more than doubling the S&P 500’s 102% rise during the same period.

Check the fund’s long-term performance before investing

As a fund’s prospectus always says, past performance is not a guarantee of future results. But checking a mutual fund’s long-term track record – through both bull and bear
markets – gives you insight into the management team’s ability to manage risk whilst also generating growth.

In an interview with the Investor’s Business Daily William Bell, one of the top Fund Managers in the US said, “We prepare for a bear market before it happens. … Our entire
process is basically built around finding companies that are going to grow at an above-average rate, but also provide a lot of downside protection when things fall apart.”

Bell added that he looks for stocks that have a “counter-cyclical component” to them. Key to that is checking the company’s long-term earnings record, particularly during weak
economies.

“If a company is able to grow through a recession,” Bell said, “we have pretty good confidence that the stock is also going to do better than the rest of the
market during a recession.”

The strategy of Bell and his co-managers and their focus on so-called “steady-Eddie” companies is reminiscent of a certain legendary investor. “If you look at what we do,” Bell
noted, “it’s almost exactly what Warren Buffett does, just in the small- and mid-cap space.”

Cost averaging helps manage risk and maximise long-term gains

Cost averaging – i.e., regularly investing a set amount of money in a mutual
fund regardless of market conditions – can be an effective way for investors to protect themselves against market fluctuations. Rather than trying to time the market, you increase
your holdings incrementally, typically on a regular basis, whether monthly, quarterly or at your preferred frequency. Thus, during a bear market, you’re buying shares in the
fund at a lower price, helping to hold down your average cost-per-share and increase your returns over time.

 

This article has been sourced from the article Guide to Your Financial Education, found on our international partner, Morningstar website, as a guide to provide readers with
useful information to improve their knowledge of investments, though it does not constitute and should not be treated as investment advice.

 


 

F’suq bl-ishma niżlin (bear market) għandek tbigħ jew iżżomm il-mutual funds tiegħek?

Bħala investituri, aħna lkoll nafu li s-suq tal-istocks jew tal-ishma jaħdem bħal ċiklu. Imma filwaqt li rridu nifhmu li wara li s-swieq jitilgħu dawn xi darba jridu jinżlu,
mhuwiex l-istess bħal meta wieħed jgħaddi minn riċessjoni f’Wall Street (li huwa d-distrett finanzjarju fi New York) hu stess, meta jara l-valur tal-portafoll tiegħu jaqa’,
kultant b’ammont sostanzjali.

Huwa f’dan il-mument diffiċli li l-bniedem li jkun investa fi mutual fund juri x’dixxiplina u paċenzja għandu – imma wkoll jista’ jkun li jiġi ppremjat fuq medda
taż-żmien, kif juru r-riżultati tal-aħjar mutual funds.

Il-bear market tal-2008, meta l-ishma kienu niżlin, huwa eżempju tajjeb. Wara perjodu b’saħħtu, li beda f’Marzu tal-2003 (magħruf bħala ‘bull market’), li matulu
l-ishma bdew tilgħin, il-kriżi finanzjarja u tal-propjetà wasslet biex l-ishma tal-S&P 500 jinżlu 58% mill-ogħla valur tagħhom f’Ottubru tal-2007 għall-aktar
livell baxx, f’Marzu tal-2009.

L-aktar stocks li kienu sejrin tajjeb ġralhom l-istess ħaġa. L-Apple, per
eżempju, niżlu 61% bejn l-aħħar ta’ Diċembru tal-2007 sa Jannar tal-2009, filwaqt li Google,
il-kumpanija magħrufa wkoll bħala Alphabet Incorporated, tilfet 67% mill-valur minn Novembru tal-2007 sakemm reġgħet sabet saqajha f’Novembru tal-2008.

Il-mutual funds imqabbla mal-istocks

Meta nixtru u nbigħu stocks jew ishma individwali, inkunu qisna l-‘fund manager’ bi flusna stess. Huwa f’idejna biex naraw jekk irridux nieħdu riskju b’mod attiv u
anke jekk innaqqsux l-investiment tagħna f’suq li jkun nieżel għaliex l-istocks li jkunu sejrin tajjeb meta ċ-ċiklu jkun b’saħħtu ġeneralment ma jerġgħux ikunu l-istess
ishma li jkunu b’saħħithom fiċ-ċiklu ta’ wara jew aħjar meta jerġa’ jkun hemm bull market.

Imma meta ninvestu fi mutual funds inkunu qed inserrħu fuq fund managerprofessjonali biex jaralna u jaġġusta l-portafoll tagħna hu, kif ikun meħtieġ, fuq perjodu
ta’ żmien.

Għalhekk, meta ninvestu fi mutual fund biex nilħqu l-għan fit-tul li jkollna, ngħidu aħna għal meta nirtiraw jew biex infaddlu l-flus għal uliedna għal meta jikbru u
jidħlu l-università, l-aktar ħaġa importanti hi li tixtri fuq rakkomandazzjoni tajba u tħalli ż-żmien jgħaddi.

Bħalma kiteb il-fundatur tal-ġurnal influwenti Investor’s Business Daily, William J. O’Neil fil-ktieb klassiku tiegħu, “How To Make Money In Stocks”: “Fund tal-ishma
magħżul tajjeb, b’tema ta’ tkabbir u diversifikat, immexxi minn organizzazzjoni finanzjarja stabbilita, maż-żmien dejjem jirkupra mill-korrezzjonijiet iebsa li jseħħu, b’mod
naturali, meta s-swieq jinżlu. Il-mutual funds jerġgħu jirkupraw għax huma diversifikati ħafna u, ġeneralment, ikunu parti minn kull ċiklu ta’ rkuprar tal-ekonomija”.

Kif tista’ tistenna f’bear market jew suq li qed jaqa’ b’mod qawwi, anke dawn il-funds ta’ kwalita’ għolja u li jkollhom ħarsa ‘l quddiem fit-tul waqgħu sew
fl-2008 – bejn 25% u 46%.

Pero meta tara d-dħul kumulattiv fuq medda ta’ għaxar snin investituri li ma ppanikkjawx u żammew l-investiment tagħhom raw żieda fil-valur
ta’ bejn 205% sa 240% mill-2006 sal-2015, li patta ħafna aktar mit-telf li kienu sofrew fl-2008 u li hu aktar mid-doppju mill-102% li għamel l-indiċi S&P 500 fl-istess
perjodu.

Iċċekkja r-riżultati fit-tul tal-fund qabel ma tinvesti

Kif jgħid dejjem il-prospett ta’ kull fund, il-passat mhux garanzija tal-futur. Imma meta niċċekkjaw it-track record fit-tul ta’ mutual fund – f’kull żmien,
kemm meta s-swieq jitilgħu u kemm meta jinżlu – ikollna idea aħjar tal-ħila tal-immaniġġjar tat-tim finanzjarju tal-fund biex jimmaniġġja r-riskju u jiġġenera d-dħul.

F’intervista li kellu William Bell, wieħed mill-aqwa fund managers Amerikani, mal-Investor’s Business Daily, hu qal li: “Aħna rridu nħejju ruħna għal meta s-suq jinżel
minn qabel ma jibda nieżel. … Il-proċess sħiħ tagħna huwa, bażikament, mibni fuq li nfittxu nsibu kumpaniji li naħsbu li se jkunu jikbru b’rata ’l fuq mill-medja, imma nipprovdu
wkoll ħafna protezzjoni għall-investituri tagħna għal meta jew jekk is-swieq imorru ħażin.”

Bell żied jgħid li hu jfittex stocks li għandhom “komponent li jaħdem kontra ċ-ċiklu” għall-investituri tiegħu. Dan jagħmlu billi jiċċekkja r-rekord tal-qligħ fit-tul ta’
kumpanija, b’mod partikolari fiż-żmien meta l-ekonomija tkun sejra ħażin. Qal ukoll li: “Jekk kumpanija jirnexxilha tikber f’riċessjoni, għandna nkunu kunfidenti
li l-istock tagħha wkoll ikun se jmur tajjeb mill-bqija tas-suq matul ir-riċessjoni.”

L-istrateġija ta’ William Bell u l-managers ta’ miegħu u l-attenzjoni partikolari tagħhom għal kumpaniji magħrufa bil-laqam “steady-Eddie”, jiġifieri sodi, ifakkarna
fl-investitur leġġendarju – Warren Buffett. Bell qal “jekk tħares x’nagħmlu aħna nagħmlu hu eżatt dak li jagħmel Warren Buffett, pero f’kumpaniji ta’ daqs żgħir u medju.”

Il-cost averaging jgħinna nimmaniġġjaw ir-riskju u nkabbru d-dħul fit-tul

It-terminu “cost averaging” ifisser meta ninvestu b’mod regolari ammont fiss ta’ flus
fimutual fund irrispettivament mill-kundizzjonijiet tas-suq. Dan jista’ jkun mod effettiv għall-investituri kif iħarsu ruħhom mill-instabilità u ċ-ċaqliq fis-swieq.

Aktar milli nippruvaw inbassru meta jkun se jinżel u jitla’ s-suq, inżidu l-assi finanzjarji tagħna bil-mod, fuq bażi regolari, ngħidu aħna kull xahar, kull tliet xhur jew skont i
l-preferenza tagħna.

Għalhekk, meta s-suq jinżel, inkunu qed nixtru l-ishma bi prezz aktar baxx milli nkunu għamilna qabel u b’hekk inkunu qed inżommu l-ispiża medja ta’ kull sehem aktar baxx apparti
li nkunu qed inżidu d-dħul tagħna maż-żmien.

 

It-tagħrif li imsemmi hawn fuq ġej mingħand l-imsieħeb internazzjonali tagħna, Morningstar u mis-sit elettroniku tagħhom. Fit-taqsima Guide to Your Financial Education tingħata
gwida b’informazzjoni utli kif inżidu l-għarfien tagħna dwar l-investimenti, għalkemm dan ma jikkostitwixxix u mghandhux jiġi ttrattat bħala parir dwar l-investimenti.

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