Tuesday, December 24, 2013

ECAM Website Update

ECAM Blog Website Update:

As we end 2013 I thought it appropriate to provide an ECAM update.  This update will discuss the blog site and a following blog post will discuss current market conditions as we end the year.

As most of you are aware, I have not provided a routine ECAM update since the end of August.  To quote Mark Twain, “The reports of my death have been greatly exaggerated”.

The primary reason for my lack of posting is because overall equity market conditions have not changed significantly since my last update.  In addition I have been quite involved with several entities in developing new investment strategies and this process has taken up a considerable amount of my time.  Rest assured I continue to monitor the markets daily and if/when there is a notable change in trend I will not hesitate to provide an immediate update on the current ECAM blog site.

As many are aware, I started the ECAM site in 2006 to provide some general “informational” guidance to Emirates pilots to assist in their Provident Fund investing.  Over the past 7 years the number of subscribers has exceeded 1000 (not only pilots but also family/friends of individuals as well as several investment institutions) strictly through “word-of-mouth”. 

As one of my primary investment tools utilizes market technical analysis, the blog has had a heavy emphasis on “technical” investment strategies over the years.  However, over the past few months I have begun to reassess the value and content of the blog.  In discussion with numerous readers, it has become apparent much of the technical content is beyond the knowledge level and interest of the majority of readers.  Given this is the case, I have been pondering how best to serve the readers going forward.

I am acutely aware that readers of the blog generally fall into 3 categories:

1)      those who have a keen understanding of investment strategies and utilize the blog as a supplement to their own strategies,

2)      those who have a basic understanding of investment strategies but do not feel comfortable enough to make investment decisions without some sort of “back-up” analysis, and

3)      those who have neither the background, experience nor interest in learning about investment strategies and would prefer to be guided through investment analysis/decisions.

Of the 3 types, I would estimate the number of site users in each category is as follows:

  • Category 1 = 5%
  • Category 2 = 30%
  • Category 3 = 65%

Given such, I feel it is time to update ECAM to provide maximum benefit to the 95% who require additional investment information.

I feel one of the great failings of Emirates Airlines is its general “corporate disinterest” in providing provident fund members with the tools necessary to plan for their retirement.  I believe this observation is extremely poignant given the companies “defined contribution” Provident scheme is potentially the only investment plan many members will utilize for their retirement.

While the Provident Fund unto itself will not provide adequate capital to retire on, a combination of maximizing returns in the Provident Fund A/B accounts combined with a solid investment plan utilizing other investment vehicles should result in the majority of members retiring comfortably in a reasonable period of time.  Unfortunately most members are lost when it comes to tackling this difficult task and my fear is there will be a vast number who leave Emirates without having fulfilled the potential to maximize their investment gains for retirement.

To attempt to fill this void, I am in the process of developing a new dedicated website.  While I will still provide insight into market conditions through the new site, I hope to expand the information to provide much greater insight into the subjects of wealth management and retirement strategies.

The site is expected to provide the following tools to allow members to self-evaluate and plan their retirement:

  • Individual member risk profiling to allow members to select suitable portfolio composition based upon their unique “life” circumstances (and to change their profiles as their life circumstances change over time).

  • Sample portfolios constructed by ECAM in accordance with varied risk profiles to assist members in choosing the portfolio most appropriate to their individual life circumstances.

  • Ongoing analysis of current market conditions by ECAM to adjust sample portfolios in line with current market trend conditions.

  • Tools to allow members to assess their current “glide path” towards their retirement goals.

  • Linked websites to additional retirement information, saving and investment strategies, tools and analysis.

 In addition, one of the most frequent questions I am asked is how I invest my own money outside the compulsory Emirates A/B accounts.  In short, I employ a unique investment strategy that has provided exceptional returns with impressive compound annual growth rates.

The strategy is employed in 3 unique portfolios (returns are cumulative gross returns without brokerage commissions and slippage):

  • A low volatility bond-only portfolio (total cumulative return 2011-2013: +48.8% with 6.6% volatility).  This type of portfolio is ideal for risk-averse individuals who desire near-equity returns with very low volatility and is suitable as a core investment strategy.

  • A moderate volatility mixed-asset class portfolio (total cumulative return 2011-2013: +116.5% with 16.2% volatility).  This is the portfolio I use for my own assets as it combines moderate volatility with high returns.  Also suitable as a core investment strategy.

  • A high volatility maximum yield portfolio (total cumulative return 2011-2013: +366.8% with 26.4% volatility).  This portfolio is ideal for those who desire exceptional risk-adjusted returns and can tolerate higher volatility and draw downs.  Also suitable as part of the “satellite” of a “core-satellite” investment strategy.

 I expect to be able to offer an opportunity to participate in these types of investment strategies at some point in the future given the huge number of readers who have expressed an interest in participating in such strategies.  As ECAM is not licensed in the UAE to act as an investment advisor, it is expected this type of investment vehicle would take the form of some sort of log-on service onto the new website whereby individuals would be required to action their own trades within their own individual brokerage accounts.*

In summary, my goal is to go beyond my initial remit of equity market analysis on the current blog site to provide the necessary “missing link” that currently exists between the limited information provided by the Emirates Provident Scheme and its members.  I hope to be able to offer a large increase in timely investment information and the necessary tools to enable members to maximize both their A/B account investments as well as other investment avenues.  More will be forthcoming in 2014 on this subject as the website is developed and introduced.

To everyone who has accepted ECAM as an informational service to assist them in their investments, thank you once again for your continued support.  I wish you and your families a very Happy Holidays and look forward to taking you and your investments forward in 2014 with a new sense of vigor and direction.

Warm Regards

Dwayne Malone

*ECAM has not sought nor is licensed to act as an investment advisory service in the UAE.  As such, any services offered through ECAM will be strictly “educational and informational” in nature at present and any individual who utilize the content presented by ECAM will be deemed to have accepted full responsibility for its content and usage.


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