by Raoul Ruiz Martinez [email protected]
Raoul Ruiz Martinez is a resident financial consultant for Finesco Financial Services Ltd., Glasgow. Finesco Financial Services Ltd is authorised and regulated by the Financial Services Authority (FSA).
With negative news on financial articles a regular feature, I wanted to draw your attention to something quite positive.
Now, first and foremost, you are possibly one of the following:
• already working
• about to retire
• already retired
• someone with capital sitting on deposit, or
• one of the many who have resorted to their old, tired and friendly mattress as the safest place for their future to be stashed
Every day you wake up, tune into the radio, pick up your favourite newspaper, turn on your TV or browse your preferred media outlet, only to be strapped into an emotional rollercoaster, at present normally ending in depression and anger.
You are confronted by the next disastrous headline about the turmoil in the world economy. Whether you are a child of rationing or mass consumption, the end result is normally the same. Fear.
Fear for your financial future, fear of how to manage that future and fear of the whole investment world. Stop focusing on now, focus on tomorrow. Businesses have. Even banks have. Don’t be left behind.
Businesses are now focusing on the medium to long term, or in other words, a cycle of 7-15 years.
We can take Citibank as an example. Recent articles in the Financial Times state that it has cut back jobs and bonuses during the anticipated slowdown, taken a hit by dealing with their troubled assets, moving away from a focus on investment banking, cutting back on large and unnecessary expenditures and generating reliable consumer payments business that has brought in some strong revenue streams to shore up the losses.
The broadsheet even stated that the bank’s capital ratio is almost at 8%, which, under the new Basel III rules, must be increased to over 5%.
(Note: Basel III rules are a new and revised set of banking rules developed by the Basel Committee on Banking Supervision of BIS, an independent and global banking regulator. The objective of the Basel III accord is to strengthen the regulation, supervision and risk management of the banking sector. The new rules prescribe how to assess risks, and how much capital to set aside for banks in keeping with their risk profile.)
Most big businesses, and the kind of big businesses that people invest in, will be starting or already following this example.
There are many thousands of very liquid and economically sound companies of all sizes with operations all over the world that are planning for tomorrow.
They are using their existing reserves and driving towards external investment through loans and shares.
These companies are prepared to provide a strong return over the medium to long term to turn losses and hard work into profits. This is all available to investors through listed securities in the investment market place under the guidance of professional investment and fund managers.
Whilst there may be a risk to recovery in certain markets and a soft landing for other economies NOW, in preparing for tomorrow there are investment opportunities that have the potential to create an excellent return for the future.
This article is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investments or course of action. Some of the investment vehicles may not be suitable for everyone and advice should be sought.
Raoul has a weekly radio feature (Raoul’s Rant) on the Owen Gee Solid Gold Sunday morning show on KissFM Algarve.
Raoul Ruiz Martinez can be contacted at the offices of euroFINESCOs.a. either by telephone on 289 561 333 or on email [email protected].