How To Manage Your Investments During Geopolitical Uncertainties
It’s barely the 3rd month of the New Year, and we have been experiencing a lot of unexpected challenges.
I know I mentioned in my annual newsletter that 2020 will be a challenging year. But so far the challenge turned out to be bigger than our expectations.
For Malaysia markets, we are sucker-punched by a double whammy, the COVID-19 outbreak and now some political uncertainties.
So the million-dollar question, what should I do with my money and investments?
If you have been a follower of our website, and are well-versed on Kaya Plus’ stock analysis and valuation, you might and would have noticed, that we never factor in any political risks or catalysts to our companies.
Why?
We firmly believe in assessing the risk of what can be assessed. Which is purely the company’s growth, potential and business risk.
If more and more variables are added into the equation, then suddenly everything will be so much more complicated.
And we do our due diligence to not even cover government-linked companies. For a company to rely on government contracts and revenue, just proves that the company is unable to be competitive in the international stage for growth.
A good company can be competitive because of its edge and economic moat.
We like companies that are able to perform regardless of the economic conditions.
Only then, it makes sense to buy at a lower discount during volatile market conditions, and for it to appreciate in value in the long run.
So ask yourself, are the companies in your portfolio too dependant on the government for earnings?
If yes, it is probably that you are still on a “betting” mentality rather than an “investing” mentality. And you are uncertain that whether is it worth the bet to put in an additional sum of money to bet, rather than to average down the cost of your investment.
