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Not only has so much happened in the world in which financial planners operate, but the very environment in which the profession of financial planning has to be plied appears to be totally different now from what it was then.
While events like the Fidentia saga that dominated news early in the year should be duly noted, it is the new, more lasting trends in the financial world that are really important.
Amongst these are the introduction of considerable volatility into markets across the globe by the ‘sub prime fiasco’. At the same time, however, it also illustrated that the truism “when America sneezes, the world catches a cold” does not seem to hold completely true anymore.
This is at least partly illustrated by an argument put forward by Thomas Stringfellow in our April edition, when he wrote about a changing world economy: “The recent stock market correction is a timely reminder that China is critical to the world’s economy.
“America is slowly handing over power to China. The world is changing,” he wrote at the time.
In this issue, some of the implications of these changed circumstances are highlighted.
Rob MacDonald writes in “Beware The Bermuda Triangle Of Investing” that “from a financial planning perspective, these fluctuations are interesting to observe but very dangerous to act upon – simply because we don’t know what the market is going to be doing next week, next month, next quarter or even next year. If anyone tells you they know, they are lying.”
At the same time, he also gives some useful advice on what the financial planner should look out for when dealing with clients.
With all indication that things are unlikely to settle down to ‘certainty’ soon during 2008, there is a greater need than ever for financial planners to interact continually with their clients.
Useful advice is dished out in a recent newsletter from Silke Financial services as a yardstick: “… when looking for someone to manage your financial planning, you had better from the offset feel comfortable with this person looking back at you. Remember, financial planning is a process and not an event.”
This edition also includes an approach from the Warren Buffet stable: “To me, volatility should be viewed with enthusiasm. It gives the true investor the opportunity to buy and sell great businesses at attractive prices.”
We hope all our readers will enjoy a very peaceful and relaxing festive season. A year of huge responsibilities and major challenges lies ahead of them; hopefully they will be well rested to meet it.
Piet Coetzer
