Wednesday, 01 April 2020
Written by Ronnie Tan, CEO & Managing Director of GAX MD
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To all MYTHEO investors,
I hope this note finds you and your dear ones well, safe and healthy. It is indeed a challenging time for us all.
The impact of the coronavirus pandemic coupled with the crude oil crisis is being felt right across the world. The lockdown of movements inevitably leads to economic disruptions which affect the country’s production, trade and consumption. Consequently, it invariably leads to a negative impact on the income and employment of the population. These same impacts are also affecting Malaysia which has also imposed and extended a nationwide Movement Control Order (MCO) since 18th March in its effort to contain and mitigate the acceleration of the virus outbreak. During these unprecedented times, it will be the interest of the nation to delicately balance health, security, economic and social imperatives.
In response, many countries have announced economic “bazookas” to cushion the impact of coronavirus on the economy. On 27th March, the Malaysian government announced a RM250 billion stimulus package to shore up the economy and to help the Rakyat. The amount is four times bigger than the RM60 billion stimulus package spent to deal with the financial crisis in 2008. It also accounts for almost 80% of the government revenue for 2019 at RM313 billion.
In terms of size, US is taking the lead as the US Trump administration has passed a “bazooka” worth US$2 trillion, the largest economic package ever approved by Washington. By comparison, the Obama administration spent US$787 billion during the 2008 financial crisis. Other countries that have announced massive stimulus packages include the UK (US$400 billion) and Japan ($US270 billion). European Central Bank (ECB) has also announced US$820 billion for a QE program of its own. Moreover, almost all central banks had earlier cut interest rates aggressively.
These are some of the pre-emptive measures taken to address this black swan event. How effective they are will depend on how soon, how well and how fast we can control this pandemic. Coronavirus is an emotional war that spans across not only the financial market and economy, but also social and geopolitical boundaries.
What Should We Do?
With this MCO imposed to contain the COVID-19 outbreak, your daily activities may come to a halt.
I take this opportunity in assuring you that we, at MYTHEO have a sound business continuity plan in place to continue serving you. Our fintech business model – a digital investment management service leverages on highly digitalised and automated workflows that seamlessly connects our front, middle and back office processes. These processes cover the entire customer on-boarding experience, funding transactions, investment rebalancing and optimisation, and trade execution. It also involves remotely connecting our co-workers in Malaysia and Japan, as well as our partners to ensure minimal disruptions.
With MYTHEO accessible online, you can continue to enquire and perform your investment requests from the safety of your home. MYTHEO offers hassle-free, digital assistance through emails and over our customer experience hotline.
It is important to note that this is not the first nor would it be the last market dip we may face in our lifetime but a rather good opportunity to get your investment strategy in check. Start by setting aside your required emergency funds. Then, leverage on your excess fund and plan out a long-term investment goal. Practice dollar cost averaging by starting small and invest gradually with a fixed amount regularly. Also, ensure your investment is well diversified. Time in the market is more important than timing the market.
MYTHEO’s investment strategy adopts a discipline investment methodology with well diversification of assets (comprising equities, bonds, treasury bills, gold/commodities, REITS), supported by portfolio rebalancing and optimization driven by smart innovation, and complemented by a team of professional portfolio managers who are competent to do what is best for our clients.
It will not be wise for us to make hasty updates or to predict the market performance for our clients because the impact of the coronavirus on the economy and on the capabilities of companies have added so much uncertainties and volatilities to the market. Trading halts due to triggered circuit breakers seem to be the norm at this juncture. The number of new coronavirus cases globally is just as volatile. The stimulus packages announced by governments across the globe will continue to be finetuned and adapted as the situation unfolds.
That being said, to all MYTHEO investors, I have a humble request.
Fear and anxiety can overwhelm our rationale thinking. In response, as difficult as it may be, try not to listen to, read or watch too much news from the media and social groups – it can be rather depressing. Instead, make the best out of the precious time given to us during MCO to do things you’ve put off, such as learning something new, practicing healthy living, adopting clean eating and reconnecting with family and friends. Let us accept the fact that we have little control over this pandemic, but we can all be responsible and do our part to get through this together! Let us all be resolute, determined, disciplined and ride through this wave of uncertainties together.
In light of such challenging times, we would like to do our part in heartening your worries! We will be waiving 3 months of management fees for you, effective 1st April 2020. I would like to thank you for investing with us. We continuously strive to encourage, enable and empower everyone to invest for a better tomorrow. Stay home, practice social distancing and take care of your health while MYTHEO takes care of your wealth!
Invest in a Moment With,
CEO & Managing Director of GAX MD Sdn Bhd