Saturday, October 25, 2008

Successfull Investing Seminars

We are planning for a four-part seminar on sucessful investing in January/February 2009, with Yours Truly being the presenter. This seminar targets:

- Investors who want to gain all-round, in-depth knowledge on the subject of investment;
- Investors who want to manage their own investment portfolios and be successful;
- People who want to study to become CFA;
- Finanial planners who want to become specialists in investment planning.

The seminar will consist of 4 four-hour sessions, from 9am to 1pm, on 4 consecutive Saturdays. The seminar will cover:

- The concepts of money and investments;
- Investments and financial planning;
- The basics of investments;
- Various types of investments;
- Fundamental analysis;
- Introduction to technical analysis;
- Behavioural finance and investor psychology;
- The practical steps of selecting an investment.

If you are interested in finding out more about the seminar, please email

Regards, Kevin Yeh

Is it time to invest in the stock market?

With the FTSE/JSE All Share Index falling from its peak of 33,310 on 22 May to 18,459 yesterday (24 October 2008), equating to a fall of 44.6% in percentage terms, the stock market certainly has been a horrible place, with most individual and institutional investors losing quite a lot of money. And it looks like the market could fall further before it starts to recover.

However, I think it's time to get into the market. From the fundamental point of view, the market starts to show great value, with many solid companies trading at very low PE's. From the technical analysis, statistical indicators indicate the market is very oversold, and positive divergence has been in place for some time. I think right now it offers once in every five years opportunity to buy into the market at cyclical lows.

The strategy for investors who invest in unit trusts:

- if you have been invested in money market funds, you should consider switching part of it to domestic equity funds;
- if you have been invested in offshore bond funds, offshore cash funds or offshore asset allocation funds, you should consider taking advantage of the current rand weakness, by cashing in on the handsome returns on these offshore funds and switching them to domestic equity funds or domestic value funds.

Prudential takes the crown as the top unit trust manager

Prudential Portfolio Managers has overtaken Allan Gray as the top-performing unit trust management company based on the risk-adjusted performance of most of its funds.

Last quarter Prudential was ranked third in the PlexCrown management company rankings after Allan Gray and runner-up Investec.

But in the last few days of this past quarter to September 30, Prudential's overall PlexCrown rating overtook that of Allan Gray, with Prudential attaining an average score of 4.13 PlexCrowns over Allan Gray's 4.00.

In addition, Oasis moved up from sixth position to third and RMB from fifth to fourth.

The PlexCrown ratings rate all qualifying unit trust funds on four different measures of risk-adjusted performance over periods up to five years. (For more details on how these are calculated, visit the PlexCrown website at

These ratings - weighted towards longer-term performance - are used to determine an overall score for each unit trust management company. The rankings should show you which company is performing consistently well over all their funds without putting your investment at undue risk.

Click here to read the full article.

Thursday, October 9, 2008

The returns on unit trusts over long term

Recently I did a bit of research on to find out the long-term return of unit trust funds. I summarise the results as follows:

Offshore funds -
There are 92 funds with 10 years or more track record.
Over the 10 year period, the median return is 9.69% per annum (Investec GSF Sterling Bond Fund)
The best return is 27.43% per annum, achieved by the Investc GSF Global Energy Fund A.

Domestic general equity funds -

There are 4 funds with a track record of 20 years or more.
The best return is 18.35% p.a., achieved by Investec Equity Fund
The worst return is 13.95% p.a., produced by Sanlam General Equity Fund

There are 17 funds with a track record of 10 years or more.
The median retun is 12.97% p.a. (Gryphon All Share Tracker Fund)
The best return is 17.12%, achieved by Futuregrowth Albaraka Equity Fund
Investec Equity Fund has been consistent over the long term, achieving second place with an annualised return of 16.57% p.a.

The above figures demonstrate the inflation-beating returns produced by equity funds, with returns exceeding inflation by about 5% to 7% per annum on average.

Friday, October 3, 2008

The worst financial crisis since 1929 - or ever?

The latest headlines on Yahoo! Finance best describes the financial crisis and economic recession the US is facing:

  • Stocks decline on unemployment, factory reports
  • Tighter credit begins to hit manufacturing, jobs
  • Financial companies borrow record amount from Fed
  • House leaders win key converts on bailout bill
  • Financial crisis moves from Wall St to the mall

On the same day the Dow declined 348 points or 3.22% to 10,482. It has fallen by more than 27% since it reahed 14,280 earlier this year. And there are signs showing it could fall further.

The FTSE/JSE All Share Index, which reached a record 33,310 on 22 May on the back of booming commodity prices, has fallen sharply to 22,561 yesterday, a 32% fall. The mining heavyweights, Anglo American and BHP Billiton, have halved in value.

Some analysts say we are in the worst financial crisis since the great depression in 1929 - 1932. Probably the worst financial crisis in the modern history?

Wednesday, October 1, 2008

Dealstream, where art thou?

Wow, what a bombshell!!!

On the afternoon of Friday, 19 September 2008, I received a phone call from an investor, asking me whether I am aware of the problems at Dealstream. He pointed me to a news article on fin24, which I duly read with amuzement and surprise. I then tried to contact Dealstream using the usual 0860 TRADER number, and the phone was just ringing.

The business radio shows on that night and the following Monday and Tuesday talked a lot about Dealstream and what happened. My slight optimism was destroyed, knowing it would take a long time to get my money back, if at all.

What happened at Dealstream is a devastating blow to me and my personal financial planning. I have my whole CFD/futures portfolio with Dealstream, I have been a client of Dealstream for two years, and I have not had a material problem with them. And now this!

I have been rallying fellow affected investors to form a colelctive action group. I have contacted Investec, RMB and FSB, however I am still in the dark as to what is or has happened with my portfolio. Only time will tell.

As a financial planner, I am stumped by this one. There are certain things you can try and plan for, and there are things you can't plan for.