"If you are in a position to, now is a good time to think about investing”, says Sagicor
BRIDGETOWN, Barbados – Following periods of economic decline, history has shown that the global economy typically goes through years of gradual growth and recovery, which is why Sagicor is advising that now is a great time to invest if you have the financial capacity to do so.
This insight was shared by Nicholas Neckles, Portfolio Manager with Sagicor Asset Management Inc., whilst providing some perspective on financial markets and investing within the context of the ongoing global fight against COVID-19.
“Given the overall global economic picture, now would be a good time to get into the market if you are able to. The reason for this is that we are seeing vaccines being widely distributed successfully; complete lockdowns have mostly ceased and economic activity in most areas is improving globally”, said Neckles. “This means that as things continue to get better, the markets will continue to improve, therefore, those who invest today are very likely to see positive returns on their investment over time.”
This is encouraging news for Barbadians focused on building their savings and improving their financial position, following the unforeseen experience of 2020. For as little as Bds$100.00 per deposit, the frequency of which is at their own discretion, investors can look at instruments such as mutual funds, which allows them to grow their money during good times, while providing them with the option to withdraw from these funds to help tie themselves over during any difficult periods.
Neckles explained that “normally after a recession there’s a period of economic growth and expansion, which can usually last for up to 5 or 10 years. We can’t predict the length of time, but what we do know is that we are currently in the initial stages of an economic recovery, which is always a great time to get into the market given that asset prices trend higher during such stages.”
The Portfolio Manager made the point that in investing, time is your best friend, as over time markets very rarely record a loss. “The performance of economies and markets fluctuates, but history has shown that they always rebound after a crisis. As a result, when we look at the performance trends of financial markets over a 15-year period for example, they have never lost money. If individuals stick to the minimum recommended investment time horizon of five years, they can expect that what they invest today, will be worth more at the end of those five years.”
As it relates to the long-term performance of Sagicor’s investment products, the 5-year average annual return for the company’s Preferred Income Fund, Select Growth Fund and Global Balanced Fund is recorded at 1.8%, 6.3% and 4.1% respectively, while the 15-year average stands at 3.8%, 3.4% and 4.8% respectively.
Neckles noted that far too often individuals sit on the side-lines constantly looking for that one week where markets did poorly so that they can say “I made the right decision”. “While caution is understandable at this time given the economic turmoil that was created by the pandemic, in taking this approach they would be neglecting the several weeks prior where the markets did well, which cumulatively outweighs any temporary dip in performance. As I said previously, markets fluctuate, however, as long as investors stay committed, the records show that they will reap the rewards in the long-run.”