Fortress: Good time to invest

The toll that the COVID-19 crisis has taken on economies and companies
has been high, but low market prices make the conditions prime for long-term
investment.

Roger Cave, Investment Director of Fortress Fund Managers Limited,
explained to the media during the quarterly Lunch and Learn with
Fortress Fund Managers that despite the uncertainty caused by the
pandemic, investors have been investing more into the fund, though
some have opted to redeem.

“We have seen more investors coming into the funds than we have seen
redemptions. Obviously, a few people have needed their money and they
have been able to get it and we have redeemed directly into their bank
accounts,” said Cave.

Chief Investment Officer (CIO) for Fortress, Peter Arender, also
stated that it has been good to see the way in which investors stepped
forward.

“It has been gratifying to see the extent which, when the assets in
our portfolio have gone on sale, our investors on balance have been
looking to add money to their investments,” he stated.

Arender went on to explain that the move by the investors was in
keeping with the psychology that was encouraged by Fortress, and that
good long-term outcomes were about staying the course.

Highlighting a strong 2019 and the good start for 2020 regarding
global equities, Arender acknowledged that the decline in equities was
the largest and quickest that possibly had ever been seen. Two-thirds
of the Caribbean Growth Fund, he noted, is invested outside the
Caribbean, namely the United States and other international
territories. The financial support given by the Federal Reserve was a
significant factor in seeing a partially better outlook in April and
May 2020, but the real growth in economic recovery worldwide is
expected in 2021.

However, Arender is encouraging persons to recognise that this is the
best time to invest and build their wealth in the background, as the
markets, companies and earnings recover.

“It is important to recognise that there is an amount of money you
keep on hand that you may need to spend on day-to-day expenses and
emergencies. Outside of that, what you would call long-term money
needs to be placed in long-term assets like stocks,” encouraged
Arender.

The CIO expanded on his point by explaining that the above average
investment returns were due to the lower starting price.

He outlined that once steady investors continued to add money to the
market because of the good prices, they would overtime cash in on
better returns.

Director Cave acknowledged that persons may find it difficult to trust
the strategy of investing in companies that had their value decline
over the past five months. He contended that despite this, it was the
best time to invest and trust the long term process with the
understanding that the low prices were perfect for a long term
recovery of three to five years.

Arender, in encouraging any persons who were in doubt about investing,
due to the COVID-19 crisis, gave thoughts from his personal view. He
said that from a long term perspective, the investment world had lived
through times like this and would again. Long term investing is the
process of putting money in things that will gradually increase in
value over time because of the wealth generated over time, day in and
day out. The market prices can and will change and the CIO expanded on
the silver lining of it.

“What we find though, once you look at this kind of episode from the
perspective of years instead of days, it all tends to come out. We
cannot predict how it will but it all tends to come out in the wash
and the world gets on with the business of living and then doing. Even
though we cannot predict when or exactly how, I strongly predict it
will happen.”