Reflections from President 24 April 2020

Reflections from the President - 24 April 2020

Fellow Community Members,
Ramadan Mubarak! I hope that you and your families are keeping safe and healthy; and staying at home as much as possible.

The COVID-19 pandemic continues to evolve globally. While in some of our countries in the Far East the number of new cases is no longer increasing, there are others where cases are continuing to increase rapidly. And there are some others where testing may not have been conducted aggressively enough, which therefore understates the true number of cases in the wider community. Regardless, most of the countries in the Far East are expected to remain in lockdown for the next several weeks.

However, there are some encouraging signs that certain countries in our region and in other parts of the world may begin to re-open their economies soon which would be welcome news to many of us! I know staying at home has not been easy for those of us who like our daily work, school, social, sports and personal routines.

Even though some of our communities may start to open up again, it is widely expected that life will not be the same for quite a while. Safe distancing measures are expected to be maintained for many months and maybe longer. We will likely need to wear masks when we step out of our homes, limit our physical social interaction, and large gatherings are unlikely to be permitted. We will need to continue to be vigilant, careful and to maintain excellent physical hygiene taking the necessary precautions when outside and when we return home.

An important topic I wanted to cover today is around the crowd mentality of investing at this time. Several community members have approached me over the past few days asking if now was a good time to start investing in stocks, bonds or making new capital investments as economies were beginning to open up again. To this I responded by saying that we need to be extremely cautious.

Just a few days ago several people were suggesting to invest in oil when the price was close to US$20, an 18 year low. In just 24 hours, however, the price dropped to below $0. Had we listened to the simplistic argument that this was a quick buying opportunity, that it could not go much lower, we would have incurred significant losses. Many investors have been burned with their oil investments in the past few days. So I want to urge you: please do not fall into the trap of some of the simple messages on social media circulating saying that a certain stock price or bond price cannot go any lower and therefore now is a time to invest. Comments like “If you don’t invest now, you may miss the opportunity”, etc. Many companies around the world will be reporting significant decreases in earnings in the coming weeks and months and it is likely that almost every country will be in prolonged economic recession. So, please conduct your own detailed and thorough analysis before making new financial commitments.

Of course, there will be many investors who will make significant profits during this time, but we need to ask ourselves whether we have the ability to withstand the significant volatility and the ups and downs in the financial markets that are likely to to continue for the next several months. Any capital that you invest in the markets should be truly “surplus” capital that is not critical for your daily household expenses or required by you to sustain the operations of your business or your families. As we have mentioned before, we recommend keeping at least 12-18 months of your daily, household and business expenses set aside in cash during this period.

This is a time to hang on and keep as much liquidity in cash as possible as better investment opportunities may come along the way and we cannot predict how long this economic recession will last. We should limit any unnecessary expenses during this time. Please be watchful of groups trying to raise money now for the next big online, fintech, medical or a unique “post-covid” investment idea without doing your proper research on their business plan or experience.

Our institutions will continue to hold online sessions over the next few weeks and months to advise and guide you. As you know we have set up a COVID-19 helpline for you to reach out to us, to bring up any issues of any kind that are concerning you or that you would like to get our advice on. In this period of way too much information and often “fake news”, we will, through our regular announcements, highlight and summarize the best advice and resources and share them with you. I wanted to take this opportunity to thank all our volunteers for their tireless work assisting all our institutions during this extremely busy time.

Stepping back, and reflecting during the fasting month, we have plenty to be thankful for. We are at home, healthy, safe and closer to our immediate families and more connected to friends and extended families, remotely, than ever before. We are lucky to live in a region where all governments are taking extremely good care of us and handling the pandemic as well as possible. We are part of a community that is always ready and willing to lend a helping hand to any of us in need of assistance.

We pray that you and your families, and all families worldwide, remain safe, protected, healthy and united.

The health of all of us depends on each and every one of us, so please continue to take the appropriate precautions.


Council for the Far East