2016 January Newsletter

Following a strong rally at the end of 2015, global share markets have experienced a volatile start to the New Year as investor sentiment soured towards China’s economic growth. The media have painted a very grim picture with attention grabbing headlines such as ‘Sell Everything’ and ‘Billions Wiped Off Market’, which has only acted to heighten investors’ fears.
 
China’s economy transition was never going to be a simple exercise. There will be bumps along the way, but China has already shown strong progress towards boosting the consumption side of the economy. The dramatic rise of China’s middle and upper classes are driving the country’s domestic consumption, offsetting the lack of growth in investment and manufacturing. China is entering a new era of consumption growth, which is projected to rise by 9% annually between now and 2020. China’s consumption growth is largely under-reported by foreign media, relative to the often sensationalised stories of China’s imminent collapse. It is important to note that the Chinese Government has a wide range of monetary tools and strategies to stimulate the economy at its disposal. Initiatives such as the new silk road trade routes and the shift to a two-child policy (from one child for the past three decades) will assist China’s effort to put its economy on a more stable long-term growth path.
 
Market volatility is inevitable, especially when investors are driven by fear of further negative events coming out of China. We believe that over the longer term, China’s economic transition will be successful, just as it has been for every other major economy that came before it. Given the supportive macroeconomic environment in other developed economies, we are of the opinion that there is little chance that the global economy will go into recession. Trying to time the market proves very difficult in practice and more often than not leads to undesirable results. By identifying fund managers who have a strong track record of selectively investing in quality companies with sound prospects, attempting to time the market becomes much less relevant.
 
The truth is that a properly diversified portfolio invested across different asset classes (fixed interest, shares, property, etc.) will tend to produce the optimal risk to return profile for investors over time. The maximum draw down (a measure of decline from peak to trough) for a well-diversified portfolio is generally significantly lower than a portfolio that is concentrated into a single asset class. We have been prudent in ensuring that our client’s portfolios are properly diversified across all asset classes in order to facilitate consistent returns that exhibit lower volatility. We will continue to watch and monitor the market, and will advise any changes to your portfolio if necessary.

*Sources: South China Morning Post, BCG, AliResearch
 

As technology gains a more important role in our lives, it also gives more chance for cyber criminals to attack our phones, computers and emails for illicit gains. We have provided five steps reference for you to follow so that you can protect yourself from fraudulent or criminal activities.

1. YOU: Attackers have learned that the easiest way to bypass most security technology is by attacking you. If they want your password or your credit card, the easiest thing for them to do is to trick you into giving them this information. So be suspicious. By being more alert, you can spot and stop most attacks.
2. UPDATING: Make sure your computers, mobile devices, apps and anything else connected to a network are running the latest version of their software. Cyber criminals are constantly looking for vulnerabilities in the technologies you use. When they discover these weaknesses, they use special programs to exploit the vulnerability and hack into whatever technology you are using including your network, your computer and your mobile devices. To stay current on your anti-virus software, enable automatic updating whenever possible. This reduces the number of known vulnerabilities, making it much harder for someone to hack you.
3. PASSWORDS: Use a strong and unique password for each of your devices, online accounts and applications. A strong password means one that cannot be easily guessed by hackers or by their automated programs. Unique means using a different password for each device and online account. This way, if one password is compromised, all of your other accounts and devices are still safe. Finally, if any of your accounts support two-step verification, we highly recommend you always enable it, as this is one of the strongest ways to protect your account.
4. ENCRYPTION: Next we recommend the use of encryption. Encryption makes sure that only you or people you trust can access your information. To protect data when it is stored on places like your hard drive or a USB stick, we recommend you enable features such as Full Disk Encryption. Encrypting data in motion means encrypting data as it’s transmitted from your computer or device to others, such as when you are banking online. A simple way to verify if encryption is enabled is to make sure that the address of the website you’re visiting starts with “https:” and has the image of a closed padlock next to it.  
5. BACKUPS: Make sure you are doing regular backups of any important information and verify that you can restore from them. Most operating systems and mobile devices support automatic backups. This way, once you suspect a virus on your device, you can fully wipe it and rebuild it from scratch from a backup.

*Sources: SANS Institute October 2014 Newsletter : Five Steps to Staying Secure 

Here at Diamond Blue Financial Services, your security is one of our priorities. To strengthen online security, we are implementing the following safety measures when dealing with your funds.

• VERBAL CONFIRMATION - Fund transfers requested by you, and not initiated by our office will not be actioned until one of our staff members have obtained verbal confirmation from you.
• ELECTRONIC SIGNATURE - We have a clear process in regards to obtaining and using electronic signature/s on your documents. An Electronic Signature Authority form is to be completed and verbal and email confirmation obtained from you on every instance that the electronic signature is required.
• TWO-FACTOR AUTHENTICATION -  All employees’ two-step verification have been enabled on all devices, online accounts and applications. This adds an extra layer of security on all client files and information.