“Today’s smart investors have realised the importance of using their savings to invest for a secure financial future”

appropriate level of risk. To understand this better, let us consider three investment cases with an annual investment of $12,000 for a period of 25 years.

In case A, we have a traditional style of savings/investing, which is 100 per cent into fixed deposits/savings at an average rate of 2.5 per cent per annum.

In case B, we have a balanced portfolio for a low risk or risk-averse individual with 50:40:10 split between equities, bonds and gold.

In case C, we have a dynamic portfolio for a calculated risk-taker with 70:10:10:10 split between equities, fixed income, private equity/hedge fund and gold.

Based on the above assumptions, the investment values under the three cases would have grown to $0.42m for case A, $0.69m for case B and $1.29m for case C.

Clearly, the investment strategy indicates a staggering difference in values over the long-term. Hence, it is important to understand the risk and reward of investing and accordingly select a strategy that would help in maximising returns. Although this is a simple example, these cases do illustrate the compounding effect of investing by varying levels of risk.

Limitations to keep in mind

Now that we have established the importance and the process of investing, it is equally important to understand the limitations and the way forward. Firstly, an investment strategy often requires long-term commitment and discipline, and liquidation at any interval could be detrimental to the portfolio. Secondly, in a rapidly changing economic landscape, it is always advisable to rebalance the portfolio strategy to align with new realities. It might be prudent to seek the services of professional managers while re-allocating in unprecedented times like the current one and the global financial crisis in 2008. Although the fee structure could be on the higher side compared to digital platforms, the professional advice is often worth the money spent.

Today’s smart investors have realised the importance of using their savings to invest for a secure financial future. In investing, it is important to focus on what we can control, such as setting up a sound financial plan, a realistic target, adequate protection, proper diversification, and a commitment to a long-term strategy to achieve our goals.

Moreover, an investment plan should not be reduced to a single strategy – it is wise to diversify across assets and geographies, depending on your risk profile and financial goals. Time invested is more important than timing the market, hence one needs to be invested for a longer period of time to build wealth and enjoy financial freedom. I will be making such recommendations every month on various strategies to benefit investors.

Some of the people used the additional time they had during the lockdown to exponentially grow themselves. Those who studied, read and learned new things will now expect a new approach at work, and if they do not find it, they will start to feel restless and seek out new opportunities elsewhere; especially if they return to a dry and dull work environment that reflects what they hope had been left behind.

The Covid-19 pandemic has heightened people’s awareness that life can be very different (from what was) and still be productive. It has shown some people that they can be effective without someone breathing down their necks. It has also revealed that workers are quite happy to get on and produce good results without anyone telling them what to do.

The biggest challenge post lockdown is for managers and leaders to learn how to adapt to their teams’ needs.

At the top of the management to-do-list must be a thorough discussion with each member of staff. Managers would do well to schedule one-on-one sessions with each of their team members as they return to the work environment, and listen to their experience of the lockdown. An important thing to keep in mind is to follow the ‘STAL’ principle – ‘Stop Talking And Listen’. Ask the right questions to understand what team members are experiencing while also getting a perspective on their expectations. Important questions to ask:

•What did you do during the lockdown?

•What was your highpoint?

•What was your biggest challenge?

•What did you learn?

•How do you feel about coming back to the office/workplace?

•What would you like us to do differently or better than before?

•What would you like us to stop doing?

•What would you like us to do for you?

•How happy are you to be back?

Managers must create a new work environment with greater latitude, more engagement and inclusion. The majority of employees want to feel secure, and that comes from knowing that they are doing a good job and are appreciated. Once they feel reassured about this, then they are up for growth.

Think of it like this, if you invest in your people and they grow, they will work more efficiently and you will have better results. Those improved results will in turn lead to a more profitable business.

Managers must think through these issues before they get too caught up with “business as usual”. The window of time in which this can be done is short, and hence this process must be done quickly and effectively without making a big show about it. The approach must be simple and straightforward, with

•Am I encouraging everyone to grow and learn new things?

•Am I fostering a culture of openness and transparency?

•Do I celebrate the greatness in them?

Personal growth must never come second, not for the managers, nor for their people. The reality is that business leaders and managers can create an inspiring workplace by being inspirational.