Financial Planning – Page 5 – Greg Fok Advisory

Evidence Based Investing

June 15, 2021November 20, 2021
by Gregory Fok

In medical science, based on research, you are able to find ways to give the patient the highest possibility to reaching their goals of healing themselves. In financial science, based on research, you are able to use historical data to give the investor the highest possibility to reaching their long term retirement goals.

“We want to help you to reduce speculation and give you more wealth and peace of mind.”

Some of the myths

1.Investing is gambling.

However, if you look at capitalism and how it works, markets reward disciplined investors who are willing to stick through the longer period of investing time frame. Ownership into shares of a diversified pool of profitable companies that can generate future cashflows for many many years allows value to be created. Innovation and the need to want a better life through basic human consumption also leads to the value of companies increasing.

2. Timing is everything.

The advertisements and news of sensation sell. When to buy, what to buy, when to sell, what to sell… The evidence is that trading can be costly, both financially and even more so emotionally for you and your family.

3. Superior skill leads to better performance

It has been shown based on data that there are few professionals who actually beat the market. If professionals are finding it hard to do it, what more for an individual investor who does this for his own retirement? It has been evidenced that most individual investors underperform the market by a huge margin due to human behaviour and biases over the long term.

Since markets reward investors for taking risks, one of the primary decisions in designing your investment portfolio is to determine which risks to take and why you are taking it.

Academic research has identified several characteristics, or risk factors, that drive stock and bond returns. Eg, equity, value, small and profitable companies.

Each of these factors has been shown to increase the return of a portfolio. For example, the equity premium says that stocks tend to outperform bonds. That doesn’t mean that everyone should only own stocks. While stocks tend to perform better than bonds, they are also much riskier, and usually shouldn’t be used for short-term needs.

Our job is to help our clients formulate a strategy that exposes them to the appropriate risks to help them meet their personal goals, depending on their time horizon.

Reduce your wealth and health Risks

May 18, 2021May 18, 2021
by Gregory Fok

I met with a friend who was referred to me about few years ago.

Her Mum was about 60 years old and had some existing medical conditions. Given her Mum’s health condition of blood pressure, diabetes, cholesterol etc, she knew it would be difficult to get her Mum insured, but she told me this. “I would rather pay a few hundred dollars every month than to be hit with a sudden big amount at the most unexpected time which I may not be able to afford..”

Using my expertise, we searched for an insurance company who was willing to insure despite having some basic existing medical conditions. Of course, the amount was limited but something was still better than nothing at all. We proceeded with the application and some simple medical questions. Her Mum was insured promptly.

About a year later, I received a call. Her Mum went in and out of hospitals as she was unwell, and was later found to be diagnosed with cancer. Being unable to work, her Mum loss her income during that period of time and that also affected the family members who had to take turns to take care of her. There was emotional stress, physical stress and huge financial stress at the same time.

We started the claims process, and after a very detailed check, the insurance company paid out a cheque to the family which was substantial compared to the cost of premiums funded. Definitely, there was still the emotional and physical stress, but when the financial stress was lifted from the whole family, there was room for comfortable adjustments so that things are not as difficult as what it would have seemed initially.

When we are touched lives for the families we work with to the point of making a BIG impact, we feel appreciated for the work we have done.

That is why people come to us to be smart about how they should manage their finances so that they do not need to worry about the unexpected scenarios of life, whether they live too long, die too soon or get into accidents or critically ill in between.

Goals – What do I really want?

April 13, 2021April 13, 2021
by Gregory Fok

What do you really want to achieve in taking this particular action or buying a certain product? It is usually not about the cheapest products or lowest fees. That will create a different set of problems in financial planning down the road. Unknowing to most consumers, we make decisions emotionally without understanding why we do it. Most of it is highly motivated by fear and greed in the short term. That is where the problem lies – where there is impatience and no discipline to keep us aligned to our objectives.

So what is our end goal objective? For most people, it will be to help you achieve the extremely big goals in life like retirement, education for kids and ensure that you have peace of mind of cashflow when health or unexpected turn of events in life fails on you. On top of that, you would also want to be generous to the people around you when you have surplus due to a well thought out, methodical plan with a financial artist. You would like to reduce risks and taxes legally. You would also like to improve your higher expected returns predictably over the long term with increased peace of mind knowing there is a scientific evidenced-based approach to growing wealth systemically.

The more intangible objectives will be to be able to spend more time with yourself, your family and personal goals whatever that might be and to take away the strong emotions of greed and fear away from you.

With the above in place, you can spend your time fruitfully with the people you love, and on the passions that are close to your heart, led with a meaningful life.

Have you spent some time to have a chat to share your personal goals and what kind of experience you would like to achieve for yourself. We can start by having an initial complimentary conversation to see if there is a good fit between an experienced financial artist and yourself to understand you better.