IN SEPTEMBER 2008, failures of large US financial institutions, due primarily to exposure to packaged subprime loads, rapidly devolved into a global crisis resulting in a number of bank failures in Europe and sharp reductions in the value of equities and commodities worldwide. No market was immune, including the emerging economies; such had become the financial relationships between continents. With this global event being followed by the Japanese tsunami disaster and the Euro zone crisis, it is little wonder that we have all become accustomed to headlines continuing to predict years of hardship to come.
This was shocking news for everyone who was saving for later life or had already retired, thinking their existing plans were sufficient. With interest rates falling to record lows, an incessant rise in the cost of living and, for many, their pensions seemingly in peril, the future suddenly seemed far less rosy. Understandably, many felt they were powerless to change what was going on around them but not so a group of expats in KL who felt that, whilst they could not to change the “big picture”, they could certainly do something to improve their own outlook, and 2011 gave them the opportunity to prove it with massive volatility in almost all investment sectors.
Brought together, in 2009, by John Marks, an English expat himself, with 30years personal investment experience, the invited group met on an informal basis and soon realised that they knew alarmingly little about investments, including ones they already held. As the saying goes, “Knowledge is Power” – so they decided to form the Expat Investment Club on the basis of educating themselves to obtain a full understanding of their existing portfolios and to better manage their investments in the future.
The initiative quickly yielded positive results. Guided by a facilitator, with contacts in the banking and institution fraternity, the club’s started learning all about how to reduce charges, how to evaluate risk/reward strategies and ended up building their own products direct with major banks, cutting out middleman and high commissions. Since the early days the Club has gone on to explore many facets of the investment world, in an agenda set by the Club’s Members: Stock and Shares, the Bond Market, Unit Trusts and Mutual Funds, Pensions, Fixed Rate Bank Accounts, Structured Products, Commodities and other investment opportunities, not usually offered to the general public, have all come into the Club’s focus – often calling upon expert, independent guest speakers to aid the understanding of the group.
Moreover, the KL Club model has caught on across the region with Clubs already either active or being formed in Bahrain, Bangkok, Ho Chi Minh City, Jakarta, Singapore, Kiev and Tokyo.
Additionally, to cater for new interest and so as not to allow Club meetings to become too generalised and impersonal, a second K.L. Club is planned for early 2012.
Why so popular?
Peter Burningham, Director of the British Business Club of Ukraine and who recently volunteered to organise the newly created Club in Kiev in the Ukraine, puts it down to the simplicity of the format: “The Clubs are for like minded people, every day expats who want to digest all the relevant information in an environment where they can take opinions from fellow members and qualified guest speakers without feeling pushed or sold to”.
Where do the Clubs go from here? “Other than further expansion, I believe the most exciting potential lays in the coming together of the Clubs in various locations to enable them, as a single investment entity, to buy directly from the major financial institutions and banks,” says Burningham.
Did he foresee any problems? “ Yes, two: firstly, we must ensure the simple format of the concept remains intact and, secondly, as every Club is run by its Members for its Members, there is always a danger that a Club could lose momentum if its Members lose the urge to participate,” he added, “but, looking at the growing interest to date, I think it unlikely.”
With the new Club openings and the recent announcement that the Club’s Research Unit is to be made available to help all Members with existing investments, the future certainly looks a lot brighter for those participating in these initiatives, and the record books will always show…..it all started here, in K.L.!