The one resolution you need in 2017

  • Business
  • Saturday, 07 Jan 2017

  • Money & you

NEW year greetings to everyone. A whole year has come and gone in a blink of an eye. To say time has flown by would be an understatement!

The year 2016 has not been a stellar year for many, but most Malaysians have taken it in their stride and made the most out of an unpredictable market and economy. But guess what? It’s not going to get any easier.

Whether it be the slowdown experienced in the property sector, the volatility in global stock markets, and the continued weakening of the ringgit which caused a slowdown in local consumption and spending, the ramifications felt in 2016 look set to continue into 2017 with little respite.

In fact, the last few years are indicative of how challenging things have become. It may seem depressing at the moment but rather than resigning to the negatives, we need to take a more proactive stance and be even more mindful of our financial decisions. What may have worked in the past may not necessarily work anymore. As such, a different perspective is required to navigate the rough and stormy economic sea.

If it ain’t broke, why fix it?

Sprucing up your current investment portfolio and financial situation does not have to mean giving it a major overhaul or turning your best laid plans upside down. Rather, it is merely relooking at things through a different set of lenses to see how else could things be better

It is human nature to not want to disrupt the status quo, for fear that it may take a turn for the worse if the current state of affairs was changed. But there are some things for which we should not wait until something goes wrong. For instances, most of us wisely go for an annual or bi-annual health check even though we may be physically fine because we value our health. Likewise, wouldn’t it make sense to get a second opinion concerning your investment strategies and retirement plans? With the vagaries of the economy and markets brewing up a storm, we no longer can afford to take our financial position for granted.

Two heads are better than one

The rise and popularity of online investing has led to many investors taking a DIY approach to manage their own portfolios. This new found freedom comes by with its fair share of risks, and investors would benefit from receiving supplementary advice, or a second opinion, to ensure that they are making the best decisions.

If an honest second opinion is sought, it should ideally be from someone who is impartial, trusted, and has the required experience and expertise to add real value. A friend, colleague or mentor could be an outlet for you to seek such advice, however, they may not possess adequate knowledge on the subject matter.

When it comes to money matters, you could talk to industry experts, like a licensed independent financial advisor. However, becareful and be mindful of whom you choose to entrust this task. In the words of Tony Robbins, don’t blindly trust your financial advisor- let them earn it.

Despite the abundance of ‘financial advisors’ in the market, there remain some ‘glorified’ sales people who just care about pushing their own agenda. If so, they will not be able to provide you, the client, with sufficient information needed to completely understand your financial situation or investment holdings.

In contrast, the “right” advisor is someone who genuinely puts the interest of their client above any potential personal gain. He or she would look at your current overall investment strategy in detail to assess whether it is well diversified, analyse your risk exposure and provide suggestions how best to allocate your money optimally.

Regretfully, most investors tend to shy away from getting a second opinion despite the obvious benefits, choosing to stick to their own gut feel and knowledge instead. Perhaps they feel that their concerns are too minor to warrant the effort, or that there is a sense of privacy invasion for a 3rd party to scrutinise their finances.

If you find yourself erring down that tunnel, ask yourself if the potential upside from a second opinion would outweigh the risk of not having one. What if the second opinion results in you doubling your money?

The road not taken

I have witnessed time and time again how investors who have sought a second opinion get out of some tight spots.

A client once approached me with an intention to diversify his investments into the strengthening US dollar but was uncertain whether to buy immediately at US$1: RM3.60 or to wait until the ringgit weakens further.

Looking at his investment portfolio holistically, I could see that 95% of his assets had the ringgit home bias. As such, it would be wiser for him to invest at least 10% into US dollar assets for better diversification.

If the ringgit were to weaken further, he would have locked in some additional gains due to the higher US dollar exposure. Conversely, should the ringgit strengthen, although he may appear to be losing money, he is not. His 85% of ringgit assets will gain significantly. By investing 10% into US dollar assets, he stands to win in either scenario.

Fast forward one and half year later, the ringgit has continued to weaken to US$1: RM4.40. Had the client not sought professional input when he did, he would not have the confidence, nor the foresight to capitalise on the turn of events .

It is human nature to think that we know ourselves best. However as individuals, we tend to do things in silo, having limited perspective of how one action affects another.

Seeking a second opinion from the right professional may significantly help us to evaluate our problems from a higher viewpoint and facilitate better decision making.

Such was the case of one investor, highly overgeared in properties, and incapable of making any decisions to minimise his risk exposure because he simply could not find any promising investments vehicles such as shares, unit trust, worthwhile for him to switch out. Upon consulting with him, he realised there were other better options beyond his search parameters.

Second opinion is not limited to just investment questions.

Take for example, a common dilemma faced by the average Malaysian, which is increasing living expenses in the face of stagnant incomes. Many who are presently experiencing this situation find themselves asking – am I saving enough to fund my retirement? Clearly it is a challenging question to contemplate by oneself.

Imagine the relief you could experience should you turn to a professional for a detailed analysis of your overall financial status, and given a list of required action plans to improve your retirement funding? Conversely, imagine the perpetual anxiety that will continue to plague middle class households had they not.

Proactive, reactive or non-active?

Here’s the bottomline: in trying times, every decision made will have an impact. Every decision not made will also have an impact. Complacency can have equal or more adverse effects than taking risks. When you take a chance, there is still the probability that the risk may pay off and an advantage is obtained.

We all know what became of Nokia, the one-time mobile phone giant. How did such a mighty entity slip into obsolescence? It wasn’t that they did something wrong; they merely did not do anything. As such they end up being a classic case study in business schools everywhere as a quintessential example of not adapting to compete in a new and rapidly changing environment.

If you haven’t made your New Year’s resolution yet, be mindful of the perils of procrastination. For those who already have a list, all you have to do is decide how high a priority this new one should be. If in doubt, ask for a second opinion. Cheers to 2017.

  • Yap Ming Hui ( is a bestselling author, TV personality, columnist and coach on money optimisation. He heads Whitman Independent Advisors, a licensed independent financial advisory firm which has helped people to optimise their wealth and achieve financial freedom since 2000. For more information, please visit his website at

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