In the middle of a pandemic, the world is experiencing a serious economic crisis owing to the mandatory lockdown to safeguard the citizens, flatten the virus curve and develop an infrastructure which can sustain its growth. Despite of the staggering stimulus offered by Central Banks around the world, organisations are still struggling to cope, there is rise in unemployment, revenue losses and financial insecurity etc that in turn has its effect on the financial markets and investment portfolios.

In times like these, it is justified for investors to be concerned about handling threats and safeguarding their wealth. Investors globally are worried about the declining value of their investments. What aggravates the circumstance is the uncertainty on the duration and the post pandemic situation.

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Revaluate your Risk Tolerance

The COVID-19 pandemic has in a way diminished the investment portfolio of numerous investors. With many of them taking a hit on their pay cuts, wealth-creation is a tough task to attain. Investors’ risk tolerance, or their true potential to take investment risk contrary to risk appetite, which is their will to take investment risk, could not be the same as before. For instance, suppose, you, as an investor, had a risk tolerance to face losses up to 20% of your investment portfolio prior the outbreak, however now you might not be in a situation to take any losses. Therefore, it’s time to revaluate your risk tolerance and refrain from deciding whether you are proficient of taking a big risk as it was prior to the pandemic. A precise revaluation of your risk tolerance can aid you to resume the creation of wealth eventually while safeguarding your money at the same time.

Prioritise Your Financial Targets

During such pandemic crisis, it is best to re-evaluate your reasons for generating wealth. From enhancing your quality of your life, to match your financial objectives on time or to live a stress-free post-retirement life, it can also be some other reasons. Henceforth, most of the investments are lowered and the income streams are getting affected. These can affect your chances of accomplishing all your financial targets on time. So, feel free to assess your financial targets again. It will definitely guide you in understanding what financial targets are still beneficial and what aren’t. You might want to let go of few of your low-priority financial goals to ensure you achieve the important ones. Reassessing your financial targets will aid you in employing your wealth in the correct course.

Equilibrate Your Investment Portfolio

The investment scheme is not as it was prior to the virus outbreak. Based on factors like age, risk appetite, objectives, and return expectations, individuals invest money in various asset classes. Although, owning to the economic curb and the commotion in the investment markets, it is possible that individuals experience an imbalance in their portfolio; for instance, the percentage of equity investments can reduce compared to debt investments. Therefore, it is necessary to rebalance the portfolio to elevate or reduce the proportion of investments in particular asset classes. Keep a tab of your latest risk appetite, objectives, and returns capacity of different asset classes to synchronise with the updated portfolio. You can even take adequate consultation from an experienced investment advisor if you require any assistance related to this.

Remould Your Budget

As speculated by many professionals, it is possible to witness a drop in the value of the Malaysian Ringgit as opposed to the US Dollar and other major global currencies. With the current clogging income and instant development projections looking blurry, the loss in your buying power can compel you to take out more funds to match the very same expenditures which you were doing prior to the pandemic. Therefore, it is significant to remould your budget in a way in which you can avidly spend on non-essential products/services to safeguard your wealth from abrasion. It is also highly recommended to invest your wealth to overcome inflation in the long term and emphasise on gaining a greater realistic rate of return on your investments. You might need to take the required steps to develop or expand the size of your emergency fund to be in sync with your needs.

Emphasise on Keeping Diverse Sources of Income

Having various sources of income is seemingly more essential in the current times than it was ever before. A lot of individuals have either lost their only source of income and many are facing huge pay cuts, all due to the Corona virus situation. Even individuals with businesses have suffered big dips in their income and are still uncertain regarding how they can bounce back once the situation returns to normal. Hence, emphasising on generating new channels of income is the need of the hour. If the lockdown period offers you considerable spare time, you can utilise that free time to monetise your hobbies, start online tutoring or invest in lucrative opportunities which will be able to bring in some passive income. Possessing diverse channels of income will offer some liquidity and reduce your dependence on your contingency fund or avoid the liquidation of significant investments when your primary income source is under threat. Most significantly, it will help you to avoid getting into the viscous cycle of debt.

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Significant Aspects of Investing in Labuan

Labuan provides a huge spectrum of business solutions which pivot around the cross-border transactions, business dealing and wealth management requirements. With the Labuan International Business and Financial Centre (Labuan IBFC) as the ‘offshore’ financial hub, the economy of Labuan primarily emphasises on cross-border trades, financing, investments and wealth management and the niche market of the Islamic consumer market, the halal product development.

As Labuan is under the jurisdiction of the Malaysian government, Labuan entities are accessible to nearly over 70 DTAs that Malaysia has signed with other jurisdictions while being exempted from taxes under the Labuan IBFC. Many international and local corporations head towards Labuan to set up their businesses either for investment or business trading intents owing to its low corporate tax rate of 3% for trading companies whereas non-trading companies have 0% corporate tax!

Finally, for business corporates that are keen on setting their foot in the Asian and/or Islamic markets, Labuan is eventually the ideal choice to set up organisations as it is one of the top Asian and Islamic finance centres which acts as a bridge between cultures and foreign domiciles. To know more about increasing your wealth and business opportunities by setting up or diversifying your business in Asia, connect with our QX Trust team  at CONTACT US or consultant@qx-trust.com for a complimentary consultation.

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