This week, Jackie is joined by Jonathan Popper who is a senior portfolio manager from Manulife. He joined her on the Live to discuss all things investment, including risks and tips on investing amidst the current market situation. Read on for the highlights on her conversation below.
What was your journey in deciding to become an investment portfolio manager?
According to Jonathan, he has always been curious about stocks and investments from an early age. His dad was his biggest cheerleader & supported every one of his investment moves as a young person with an interest in the markets. Going to school, he already knew he was going to choose a career in finance, so he decided to do a CFA and history degree. The history degree was important for him because he already figured that you must filter through a lot of information, and at the end of it you realize only a tiny amount of that information is useful. This means most times you end up making a decision with incomplete information. However sometimes history can sometimes provide great lessons in what may happen in the future when it comes to investing.
What is your approach to investing?
He starts by acknowledging the fact that over 25 years of being in the industry has taught them how to handle certain situations when there is change in the market. As far as approach, he said that understanding the market and how most companies operate and make profits is important, the team basically looks at factors that makes a company standout and their potential to succeed long term. The main goal is to ensure they are paying the right price for any investment and regardless of if the market goes up or down, they strive to not lose money on the companies they select. The way Jonathan’s team differs is they want to have as many different business risks as possible in their portfolio to ensure they have a broad and diverse group of investments. Having a diverse portfolio protects them from being hit by unprecedented market dips in the market.
What is surprising you these days in the market?
He is most surprised at the speed in which the market continues to move, especially now that the market is digitalized and globalized. He added that now more than ever, he is urging investors to be intentional about the types of investments they make and focus less on the media and headline risks(i.e what they hear about in the media). He stated that to survive, his team needs to be independent in the sense that they are satisfied with the due diligence they have done on the companies they select for the portfolio they have chosen. Investors also need to keep in mind that risk is always present in the markets. So, understanding that in good times and bad times there are risks but also relying on a well thought out process to navigate you through those conditions is how they have achieved great results consistently over the years.
Is there anything happening in the market now that you expected to happen that did?
Jonathan stated that everything that’s happening post covid was kind of expected from his end. He added that, the inflation and rate increases were anticipated globally and as far as inflation goes, he initially thought that would happen temporarily but that isn’t the case now. Tying it back to how this affects their investment portfolios, Jonathan stated that the companies he invested in are price setters not price takers. The price setters have the strategic moats with a capability to withstand price increases. To achieve this, he looks out for companies with less debts and lots of free cash flow to contend with the market volatility. This business model gives the companies an opportunity to buy their competitors when their valuation dips. Having a game plan is crucial to investing as it gives a level of comfort and security in the decisions made.
What would you describe risks to be in the current market?
According to Jonathan, there are 2 types of risks – the opportunity costs of missing out and losing money (the real risk). The focus should be on preserving cash at all times as the real risk is in losing money. To avert this risk, the team spends a lot of time analyzing and researching the market and their patterns overtime. Again, focus is on the specific companies and not the market as a whole as would be the case with index funds. Always strive to preserve capital and not lose money. Also, we try to not base decision on feelings but on hard facts as that would ensure we make the most informed decisions. Having a game plan ties in here as well, your plan will help anticipate certain market situations and what you need to do when something positive or negative happens.
How can we manage risks as investors looking to retire soon?
Have a plan, work with a financial advisor, be on the lookout for new opportunities and understand the risks associated with your current portfolio over the short and long term. If your investments are long term in nature ensure you understand the game plan and the type of volatility you may be exposed to in the short term, so you are better prepared for it. A financial advisor can help you talk through your investment decisions which makes their guidance a lot more valid than relying on emotions and feelings when investing. Be sure to make the decisions with a clear head and feel free to consult an expert if you are uncertain.
If you want a free 1-1 consultation with Team Jackie Porter on how to manage money and create a secure investment plan for your future be sure to email us at email@example.com.