In Bloomberg’s article, Bloomberg Opinion “Points of Return”, John Authers, 17.06.2022
After the stock market registered another steep decline, most investors face again the long-lasting dilemma of whether, when, and how much.
The truth is that most of the time shares are increasing. The “bull” market is characterized with its long stages of increase and short-term corrections. The period of corrections is a perfect opportunity to buy assets at better prices and to catch the upward trend. Those who succeed to buy at the bottom of the corrections have a great opportunity for solid profits. However, a perfect synchronization with the market’s pulse and capturing the right moment present challenges, even happy exceptions for the most experienced analysts, traders, and investors. The searching for the perfect moment for a purchase can be a psychological trap, leading to losing big benefits in the long-run. The searching for perfection is an amazing goal in the world of art, but in the world of finance markets this can be a “vice”. The market is not perfect, it constitutes countless factors and coincidences that move it in a certain way at certain moments. With all of its unknowns, the market today gives good opportunities for investing. However, you may not have caught the absolute bottom afterwards.
These arguments are utilized in previous tough situations. Let’s take Lehman’s bankruptcy in 2008. On October 1 2008, Lehman filed for bankruptcy, and the Congress opposed its rescue. Until this moment, S&P500 had already fallen with about 25% and all kinds of horrific predictions and numbers seemed possible, many analysts said that the 25% decline in question was only the fun part of what would come. The example is very good in order to find out where we are today and what we can expect despite the clouds on the horizon. If you had invest then, you would have felt the weight of a 40% decline within half a year. Despite this, the investments would have recovered by the end of 2009, and until the peak from 2021, you would have received 440% total return.
Let’s note that we look into an investment, which is made during a time when the surviving of the capitalism seemed more threatened than at any other time since the end of World War II and after the absolute “failure” to hit the bottom aka the end of the collapse.
If you start investing today, by averaging (to divide the total investment amount into 3 or 4 parts with which to buy shares during certain times) this may be the best decision you have ever made at a time of the greatest concerns.
✔ If you are interested in the investment opportunities which Compass Invest JSC can provide to you, please contact us for a free financial consultation according to your personal financial situation here - https://bit.ly/3MnaV1K
Disclaimer:
This information is marketing material and does not present investment consultation, advice, investment research, or investment recommendation. The information is valid as of the issue date of the marketing material and may alter in the future. The value of the units in the collective investment schemes changes over time and it could be higher or lower from the value at the time of the investment. No profits are guaranteed and risk exists for the investors to not receive the full amount of their investments. Investments are not guaranteed by a guarantee fund which is created by the country or another form of guarantee. Information on the performance of the financial instruments in the past is not a reliable indicator for future performance. Therefore, it is recommended for investors to acquaint themselves with the Prospectus and the Document with key information for investors before making a final investment decision. You can find these documents in Bulgarian on the website of Compass Invest - www.compass-invest.eu, and you can request and get a free paper copy at the office of the management company at: Sofia, 19 George Washington Str, floor 2, during every business day from 9 am to 5 pm. Future results are subject to taxation, which depends on the personal situation of each investor and may change in the future. A summary of the rights of the investors is available at the following hyperlink in Bulgarian: here. The mutual funds, which are managed by Compass Invest, are actively managed without following an index. We would like to inform you that Management Company Compass Invest can make a decision to terminate the offering of funds on the territory of the Republic of Bulgaria. The investment in units of mutual funds, in addition to benefits, carries certain risks like: liquid, operational, interest, currency, and political risk, as well as macroeconomical risk, currency risk, concentration risk, etc. The full information about risks can be found in the Prospectus of the respective fund.
This information is marketing material and does not present investment consultation, advice, investment research, or investment recommendation. The information is valid as of the issue date of the marketing material and may alter in the future. The value of the units in the collective investment schemes changes over time and it could be higher or lower from the value at the time of the investment. No profits are guaranteed and risk exists for the investors to not receive the full amount of their investments. Investments are not guaranteed by a guarantee fund which is created by the country or another form of guarantee. Information on the performance of the financial instruments in the past is not a reliable indicator for future performance. Therefore, it is recommended for investors to acquaint themselves with the Prospectus and the Document with key information for investors before making a final investment decision. You can find these documents in Bulgarian on the website of Compass Invest - www.compass-invest.eu, and you can request and get a free paper copy at the office of the management company at: Sofia, 19 George Washington Str, floor 2, during every business day from 9 am to 5 pm. Future results are subject to taxation, which depends on the personal situation of each investor and may change in the future. A summary of the rights of the investors is available at the following hyperlink in Bulgarian: here. The mutual funds, which are managed by Compass Invest, are actively managed without following an index. We would like to inform you that Management Company Compass Invest can make a decision to terminate the offering of funds on the territory of the Republic of Bulgaria. The investment in units of mutual funds, in addition to benefits, carries certain risks like: liquid, operational, interest, currency, and political risk, as well as macroeconomical risk, currency risk, concentration risk, etc. The full information about risks can be found in the Prospectus of the respective fund.
Risks:
Despite benefits, the investment in shares of mutual funds brings certain risks like:
1) Market risk with the following components: a) interest risk related to a decrease of the value of the investment due to a change of the interest rates levels b) currency risk related to a decrease of the value of the investment, denominated in a currency which is different from BGN and EUR c) price risk related to a decrease of the value of the investment in the case of unfavorable changes of the market’s prices;
2) Credit risk – related to a decrease of the value of the position in the case of unexpected events with a credit nature which are related to the issuers of financial instruments, the counter side of exchange and OTC transactions, as well as countries, in which they operate;
3) Operational risk – from errors or flaws in the system of the organization
4) Liquidity risk – in case of forced sales of assets under unfavorable market conditions;
5) Concentration risk – in case of incorrect diversification of exposures to groups of related clients, from the same economic branch, geographic area, etc.
6) Position risk which is related to the change of price of a certain instrument in result of factors related to the issuer or in case of a derivative instrument – related to the issuer of the base instrument;
Additional information for the risks can be found in the Prospectus of the respective fund, which is available here: www.compass-invest.eu