Richard Cayne on Active or Passively managed Funds ? Does it really need to be either or could it be Both?

 

Active or Passive? Does it really need to be either or could it be Both?

With all the economic turmoil, issues and virus concerns seemingly everywhere you turn, in markets all over the world, many people are trusting managers of active investment products. Why pay higher fees for players in a rigged, or at the very least an incredibly tumultuous, game? Passive investment managers charge lower fees whose decisions are dictated by a pre-determined structure and strategy.

“This is a very black and white point of view that will do your investments more harm than good,” says Richard Cayne of Meyer International. Richard advises his clients to carefully consider both strategies – they each have their pros and cons, and they both can be part of a profitable financial plan.

What is active investing?

An active investment manager is actively engaged in deciding what and when to buy and sell. This sounds simple, but it is actually a very complex, involved commitment. The manager must research extensively and be able to quickly absorb and analyse market data to make decisions that will beat the market. Considering all the variables that affect a financial instrument, this is a profound undertaking. This is why active investment managers charge higher fees. But how well do they perform? In recent years, not so well. According to Morningstar’s Active/Passive barometer, active funds have been underperforming passive funds, especially over longer time periods.

So why bother with them? Under certain conditions, active investing can pay off very well. Before you hand your money decisions, do some research. Is the manager an expert in the fund sector or emphasis? If the strategy is too general, this usually does not bode well for active management. Also, success with this strategy often relies on being first in to profit most. In more developed markets, this is difficult since there is literally a wealth of information available. Emerging markets and sectors will often require specialised access and insights that can help active investing thrive. Also, active investing can respond immediately to sudden changes in the financial world, like the recent Brexit vote.

What about passive investing?

While active investing relies on an individual analysis of a specific dataset, passive investing looks to the overall performance of a certain group of equities or debts. Passive investing focusses on a certain index like the S&P500 or the DJIA or a set exemplar from a specific sector or exchange. Then investments are chosen that match that given group. The idea is that while it may be hard to predict a single investment that will beat the market, the market, whatever that may be, will perform consistently and, in times of loss, will eventually correct and profit.

So, while passive investing may not reap huge returns, it offers the possibility of dependable, constant returns that investors may feel they have more control over (since they will know at any time what investments are being made).

Now, what to choose?

So, there are many variables that can affect both strategies, for good and for bad. It would then not be wise to write off one for the other. When making any financial decision, all possible scenarios and options should be weighed, from how much risk you want to take to whether you believe certain sectors or markets are worth special attention.

“You really need to be realistic about what type of returns you’re expecting from your portfolio over a set time period,” Richard Cayne counsels. “Both active and passive investment strategies have their place, you just need to be thoughtful about what their places are for you. A good financial advisor should be able to work with you and help you plan appropriate allocation.”

“Also, a lot of people forget that their investment decisions are not set in stone,” Richard adds. “Markets fluctuate, so should you. There’s no need to make adjustments at every report of a downturn or potential economic hiccup, but you definitely should revisit your portfolio regularly with your advisor to make sure it reflects market trends and your risk appetite.”

For more information on this or any other financial topics, please contact Richard at Meyer International in Bangkok Thailand.

Meyer International Richard Cayne – Life Insurance Simplified

Richard Cayne Meyer Asset Management Ltd says; In its simplest form, life insurance is financial leverage.  A small pool of money creates a large pool of money, guaranteed and risks free, for the purpose of funding an identified goal or objective.  Term life insurance is what most people think of when they think of life insurance.  Term life insurance provides a guarantee of a pool of money for a specific number of years, at a guaranteed (never to increase) annual cost, as long as the premiums are paid; usually for 10, 15, 20 or 30 years. The expectation is that at the end of the term, the protection will no longer be necessary, and the policy may be allowed to lapse (you may lapse a term policy at any time by ceasing to pay for it).

Replacement of Income
We use term insurance frequently to provide for replacement of income to a family who is dependent on a “breadwinner’s” income for living expenses, college funding, retirement funding etc.  If we plan correctly, we will accumulate assets during the earning years such that at retirement, the client will be able to produce his or her own income from assets when there is no longer income from employment.  Term life insurance guarantees that the “gap” between today and retirement will be filled if income ceases due to death of the income earner prior to fulfillment of planning. Richard Cayne financial planner, at Meyer International Ltd based in Bangkok Thailand, says that Term life insurance is inexpensive, has no internal cash value, and may be exchanged for other types of life insurance which do.

Planning for Certainties in Life
The other most often used type of life insurance is Universal Life.  Universal Life is permanent death benefit life insurance. Universal Life has myriad applications in financial planning, as the death benefit cannot be outlived. Using this financial leverage usually makes fiscal sense when there is a need to create permanent liquidity. Many of my clients use Universal Life to create an estate or to protect an estate.  In case you don’t think you have an estate; you do.  Your estate is all of your “things”, including your financial assets, property, hard assets like art, sculpture and collectibles, your furniture, cars etc… All of it.  Death eventually produces financial liability to the beneficiaries, one way or the other.  Even small estates have expenses, and providing for the extinguishing of these expenses helps to ensure order and facilitate the completion of your plans and aspirations for your beneficiaries.

Richard Cayne Meyer Asset management Ltd having lived in Tokyo Japan for over 15 years can certainly say that Japanese  like other nationalities with larger estates can be devastated by taxes and expenses if advance planning is not good, and I don’t know a single case where the client found it preferable to force the sale of estate assets to pay taxes and expenses rather than have the expenses paid from the proceeds of a life insurance policy which bought those dollars at a deep discount; often a fraction on the dollar. I’m safe in saying that everybody understands that they will have to pay for these inevitable expenses with discounted dollars as opposed to paying for them dollar for dollar.  Some clients want to leave a financial legacy to children, grandchildren, or a charity.  Universal Life allows them to leave a guaranteed, tax free financial legacy which was secured at a deep discount.  Richard Cayne having consulted on many larger Japanese estates says Japanese like other nationalities particularly Asian ones do not like talking about death although inevitable but planning for this earlier rather than later will ensure that your wealth can be passed on in the most cost efficient manner to those you care about.

Richard Cayne is Managing Director of the Meyer Group of companies and based in Bangkok Thailand at Meyer International Ltd.  The Meyer Group has ties with over 200 global financial institutions and is part of Asia Wealth Group Holdings a UK Listed company.

Article Source: - http://richardcaynes.wordpress.com/2012/09/01/meyer-international-richard-cayne-life-insurance-simplified/

Meyer International Richard Cayne On How to Choose The Right Health Insurance Plan

Today, the market is full of numerous insurance companies offering a diverse mix of health plans; it really looks like a laborious and time consuming task to choose the right kind of health insurance plan for yourself or for your family. In order to choose the most suitable health insurance plan for your family, you ought to analyze certain factors and figure out the major differences and advantages of several health insurance plans, says Richard Cayne.  Having the right kind of health insurance plan for your family, ensures that you may sit back and relax at the thought that you have taken the right decision and have secured the future health security of your family members.

Having adequate levels of health insurance can be a very important part of financial planning says certified financial planner Richard Cayne as his group Meyer Asset Management Ltd has relationships with many different health carriers.  Some family’s whole financial plan can be seriously impacted and turned upside down by a serious medical emergency which can run into several hundred thousand USD in hospital bills and how it is important not to let such a scenario occur by planning for the unthinkable.

When choosing a health insurance plan for your family, you need to consider several important factors.  Richard Cayne Meyer International in Bangkok explains some of such most important factors.

Know Everything About A Health Insurance Plan

Try to find out everything about the health plan that you are planning to choose. Know all the conditions that the plan cover, which conditions are not covered under that plan, what all its co-payment or deductible amounts may be as well as any conditions that may be excluded either now or in the future. Such details will give you a fair idea about how suitable a plan is for your family needs and whether you should choose it or not.

Understand Your Family Needs

Analyzing your family needs is very much essential. While choosing a health insurance plan, you should find out how many members of your family you want to be covered under the plan. You should make it very clear whether you want just a few members or your entire family to be covered under the plan that you are choosing.  This may be because some members may have insurance plans already in place via their employment or in the country they live, in the case of a large family living in different geographical areas.

Decide Whom You Want To Include And On What Level Of The Plan

As per Richard Cayne in Thailand, this step may look somewhat similar to the previous one but requires detailed analysis and several other factors to be considered. You should check well which family member need the health insurance plan and which level of it as some plans offer the ability to have different levels of coverage for different family members. Are there any members in the family who have got any pre-existing physical conditions? Are there any members who frequently need to visit the doctors or hospitals? Such type of questions will let you decide clearly which member should be included and covered under which grade of the plan.

Evaluate Your Salary/Budget

Once you have made up your mind to buy a health insurance plan for your family and have decided about the members whom you want to be covered under the plan and at which levels, it is now time to evaluate and assess your means and ability to afford such coverage.  So you should opt for one that suits your needs and whose premium does not become a financial burden for you and you can readily do this by choosing a higher deductible or co-payment level for the plan.  For example an insurance plan with a $50 deductible (meaning you pay the first $50 of any claim) which may have a US$1,000 per year cost may drop to US$400 per year with a US$2,500 deductible meaning that you really want it to cover the really major incidents which you may not be able to afford on your own.  Having a plan in place in case of major medical emergencies is probably the most important security to put into place and if you can afford the plans with low deductible and all the bells and whistles then perhaps explore those options if your means allow.

Richard Cayne has helped the expatriate community in Japan and now in Bangkok Thailand with various healthcare plans over the years.   With health care costs and insurance costs on the rise finding the most cost effective healthcare plan is a good step forward to any families long term financial plan and security.  Meyer International Ltd in Bangkok Thailand and Meyer Asset Management Ltd are both members of Asia Wealth Group Holdings Ltd listed on the PLUS Stock market in London UK.

Meyer International Richard Cayne Basic Tips for Beginners Investing In Mutual Funds

Lack of knowledge and information on how and why invest in mutual funds can create disastrous results for the newbie investors, says Richard Cayne. On the other hand having proper knowledge, availability of reliable information and guidance and taking right decisions at rights times can bring huge profits to those who invest in mutual funds. Those who are new to mutual fund investments should take care to learn certain basic tips that will help them achieve profitable results.

Enhance Knowledge – According to mutual fund investment consultant Richard Cayne, the first step that all newbie investors looking at investing in mutual funds need to take is to enhance their knowledge before stepping into the market and taking any investment decision. Now-a-days, it has become quite easy and convenient to gain knowledge on almost everything from the comfort of your home because of presence of the World Wide Web. This umbrella of the internet possesses some important websites that can help anyone to update and enhance his/her knowledge and information on mutual funds. So spare some time and do your own research so that you get the basic information on mutual funds.  Just don’t believe everything you read on the web.

Decide Proper Asset Allocation

It is very important to have a balanced portfolio and choosing the right kind of asset allocation can really make all the difference between a portfolio that follows the indexes and one that really outperforms. Asset allocation is all about investing your capital in various investments with the apt blend of different financial products that compliment one another rather than just performing like one another.  For example some hedge funds can take shorts positions in the markets so that if the respective financial instrument drops in value then the hedge fund can make money from this.  Adding in some funds that can make money in bad times as well as the funds in your portfolio that can make money in good times may achieve a higher overall return and shelter your portfolio somewhat when the markets get bumpy.

Choose Right Funds

You will find that there are various types of funds available in the market some with very high minimums. Hence you need to take the right decision in terms of what your expectations are and what is available which will work with your financial plan. For example, ask yourself that what your financial objectives are, do you want to invest for your retirement or for the education of your child or for some other purpose, over what time frame do you expect what kind of return and how your tolerance to risk may be.   Richard Cayne having lived in Tokyo Japan for over 15 years and as Investment advisor at Meyer Asset Management Ltd says that expectations and understanding ones risk tolerance levels are incredibly important and working with the right financial advisor or consultant that can help you determine what your expectations and risk tolerance levels are is crucial.

Monitor Constantly

According to Richard Cayne Meyer Asset Management Ltd’s Asian based servicing arm Meyer International in Thailand, the newbie investors in mutual funds should understand and realize the fact after they make their initial investment close monitoring and evaluations are needed to make sure that the strategy is performing both in line with your expectations and risk tolerance levels.

Take Help of Financial Advisors

Take help and advice from reliable financial consultants says Richard Cayne Meyer International in Bangkok. These knowledgeable and seasoned financial advisors not only help the mutual fund investors make the right investments but they also help in monitoring the various investments. Experienced financial advisors should keep their clients updated about the performance of their investments and provide ongoing advice with periodic reviews.

Richard Cayne founded Meyer Asset Management Ltd and is Managing Director of Meyer International Ltd the Asian based servicing arm for the Meyer Group.  Richard has over 15 years' of experience in Japan, beginning with a short assignment at Sony before changing his career path to wealth management where he gained much of his market knowledge and experience in servicing the wealth management needs of the Japanese market. Richard is Canadian and speaks fluent English and French and has a working knowledge of Japanese.  The Meyer Group is part of Asia Wealth Group Holdings which is a publicly traded company listed on the PLUS Stock exchange in London UK.