Presented by
Bangkok-Pattaya Hospital
by Dr. Iain
Corness
How many people have you met
recently wearing sunglasses at night? Unless they were doing
Ray Charles impersonations, I think you will find they had
red painful eyes.
This condition, generally
called "Conjunctivitis", is caused by infecting
organisms, and the little blighters are extremely agile. They
can leap over your nose and infect the other eye, and can
also jump into your next door neighbours eyes as well. These
little chaps are extremely contagious.
All degrees of infection may
occur, and infect the different areas of the eyes, eye lids,
etc. We medical folk do give them different names, like
"Scleritis", "Blephoritis", etc., but we
are really talking about the same thing - red painful eyes,
with the eyelids often stuck together in the mornings, lots
of gluggy stuff coming out and you feel miserable with it.
The condition spares no-one, adults, children, the aged.
Everyone can get it.
Generally, with good nursing
care and hygiene, the condition will settle in a couple of
days, but the important factor to remember is just how
contagious the condition really is. Scrupulous hand washing
after looking at or dealing with anyone with the condition is
a must. Good old soap and water and a nail scrubbing brush is
the answer. Whilst I will jokingly talk about the high
jumping abilities of the bug, in reality most of the cross
infection comes from rubbing the infected eye, then rubbing
the good eye. Or rubbing the infected eye, shaking hands with
someone else who then rubs their eyes. Or even sharing
reading glasses with another person. In an outbreak of
conjunctivitis you have to imagine you are a surgeon going in
to the operating theatre. Scrub, scrub, scrub!
With children, gently clean
the eye lids and eye lashes with clean warm water and use
lots of cotton balls, lots of water and lots of sympathy. If
needed, gently irrigate the eyes with "Normal
Saline" solution (available at pharmacies and used by
contact lens wearers) and be prepared to do this every few
hours. Advise the patient not to rub their eyes, no-matter
how great the temptation!
Provided the condition settles
in the ensuing 24 hours, then just keep up the nursing care.
If however, it is not, then an appointment with your doctor
is necessary. Eyes are very delicate organs and "self
medication" is not to be recommended! See the picture?
Neglect eye conditions and you won’t be seeing any
pictures! And don’t rub!
By Leslie
Wright
The biggest dilemma facing
every potential investor with more than a modest amount of
capital is where to place their hard-earned money.
Everybody wants their
investments to produce a reasonable return, and at the same
time limit the risk of potential loss that accompanies every
type of investment.
The greater the potential
return you expect, the greater the degree of risk you usually
have to accept.
But is that always true?
The answer in fact is no.
In recent weeks, this column
has addressed the risk & return from various types of
traditional investment - cash deposits, property, bonds and
equities.
Many investors I meet
professionally tend to have concentrated their assets into
one or two asset classes which they think they understand and
feel comfortable with - property in their home country, or a
few ‘blue chip’ stocks in a market they’re
familiar with and can follow, or a bank deposit earning low
interest in hard currency, or earning higher interest in a
potentially unstable currency (as has alas been all too
evident in the past year) - and ignore the rest.
Often these investors do very
well indeed for a year or three, and speak proudly of the
gains they have made unassisted by professional advisors.
All too often, however, these
same investors suffer a substantial setback when their chosen
market turns against them, which it will naturally tend to do
as the normal business cycle progresses.
Such losses are rarely
admitted over the dinner table.
The balancing
act
Putting together a mix of
different asset classes can reduce the overall risk of a
portfolio invested heavily in only one or two asset classes,
because when one asset type is gaining, another quite often
moves in the opposite direction.
This mix is referred to as
"balancing the portfolio", and it can be a daunting
task even for professionals, because one never knows for sure
where the various markets are headed.
Even the best fund managers
and professional portfolio managers can only make educated
guesses based on their experience and expertise, and try to
limit the downside in case they have guessed wrong.
Spreading your holdings across
more than one market tends to reduce the risk further,
inasmuch as few markets move exactly parallel to each other
(although movements in one very often influence others,
especially in the short-term - as we have seen recently.)
However, while this balancing
act reduces the risk of the overall portfolio losing money,
it usually also tends to reduce the overall potential gain.
It also requires a
considerable devotion of time in monitoring the performance
of each of these diversified holdings, plus having access to
the information required to make objective judgments as to
when to move out of one market and into another (and
we’re not talking about opinions aired on last
night’s TV news or this morning’s newspaper!)
Most investors have neither
the access to this specialized information nor the time to
devote to managing their investments, let alone the amounts
of capital required to construct a truly diversified
portfolio of direct investments.
Private
banking services
Many investors - especially
those with substantial sums of capital - avail themselves of
the professional portfolio management services offered by
private client divisions of international banks and other
financial institutions.
However, these services have
traditionally only been available for investors looking to
place at least US$500,000 with such an institution.
Also, most such services see
their task as managing risk more than producing high growth -
and indeed, this is what many millionaires are looking for.
They require a steady, modest return on their investment
without the risk of losing any of their capital!
That’s okay if you happen
to live in a low-inflation area, or the annual gains from
your capital well exceed your annual expenditure.
But how about investors with
less than this amount of capital, or who for one reason or
another are looking for higher gains than the quite modest
performance usually returned by most banks’ private
client investment services?
Indeed, is there another way
to add potential gain while actually reducing risk at the
same time?
Well, actually there is.
Difficult
Decisions
Take a moment to consider how
you would invest, say, $100,000 today.
You may start with some
stocks, perhaps in Europe or the U.S. (if you believe it
hasn’t yet peaked) or maybe the Far East (if you believe
these markets have bottomed out and are set to recover soon.)
You may then invest in a basket of international bonds and
leave the balance in cash for security.
Not that difficult you may
think. But, just as you put the phone down after giving your
broker instructions on your portfolio, you hear on the TV
that the U.S. stock market (which accounts for about 45% of
total world stock market value) has dropped suddenly from its
all-time high after racing ahead again this year. The U.K.
and Europe had also been doing very well, up until the
Russian story broke.
"Am I buying at the
top?" you ask yourself. "What happens if this is
more than just a correction caused by profit taking or
sentiment?"
And if interest rates were to
be raised to curb economies that are forging ahead, what will
be the effect on bonds?
You call your broker to cancel
your orders and tell him to leave it all in cash.
"Ah," you sigh. "At last I can relax... Cash
is secure..."
But then you begin to consider
what if the markets slow down and interest rates are lowered
to re-stimulate the economy? Bonds will then perform better
than cash - so shouldn’t you increase your exposure to
bonds and reduce your hard-currency cash deposits?
And what happens if you stay
in a mix of cash and bonds (just to be on the safe side) only
to see the major stock markets bounce back on fundamental
strength after the froth has dispersed and the
sentiment-driven fears have been dispelled (as a number of
analysts believe is currently the case), to produce another
excellent year?
And what about the currency of
your cash holdings? Cash is safe, isn’t it? (Try telling
that to the Japanese, Indonesians, Malays, etc.)
And what about the new
European currency unit, the Euro? What effect will its
introduction have on the value of Sterling, which some feel
is due for a correction and has been maintained at its high
level against the Dollar this year by concerns in Europe
about the Euro?
Not so easy after all, is it?
So instead of fretting about
it, maybe you’ll decide simply to buy a nice piece of
property in a nice safe locale... but on which you’re
likely to see a net return after taxes, maintenance,
insurance, agents’ fees, etcetera, of probably only
about the same as your cash would have earned on time
deposit, yet with much less flexibility - as so many property
owners have learned to their regret over the past decade...
The Problem of
a Traditional Portfolio
A traditional balanced
investment portfolio will contain stocks, bonds and cash.
Anyone who has held some mutual funds or unit trusts will, no
doubt, have had this sort of portfolio.
From August 1996 to July 1997,
a ‘balanced’ portfolio made up solely of global
stocks, bonds and cash would have produced what most would
consider very good returns of around 18% in US Dollar terms.
Having adjusted to market
conditions when the Asian crisis hit last year, a selected
portfolio overweight in European, U.K. and U.S. equities (the
only equity markets this portfolio manager has recommended to
clients in 1998) with a ‘balancing’ portion of
bonds and cash would have produced around 22% over the past
12 months.
Afraid of a
crash?
The current fear of many
investors who are over-exposed to stock markets is the threat
of a severe correction or crash.
For long-term investors this
is not such an issue. Although stock markets do indeed go
through short-term ups and downs, the long-term trend has
always been upwards. In general, over time, equities
outperform bonds, which outperform cash, and by quite a
significant margin.
In the short term, however,
investors might have to weather the storm, and it could be
quite a bumpy ride. The threat is one of volatility. The
higher stock prices rise as they have done this year, the
greater the threat.
So we come back to the same
question: how can we make money in the coming 12 months
without taking on undue risk?
One way is by incorporating
into your portfolio an element of what are known as
‘alternative’ investments.
Such investments are not
co-related to stock market movements, and are therefore
largely unaffected by stock market volatility.
Next week we’ll look at
some examples of this type of investments.
(To be continued)
If you have any comments or
queries on this article, or about other topics concerning
investment matters, write to Leslie Wright, c/o Family Money,
Pattaya Mail, or fax him directly on (038) 232522 or e-mail
him at [email protected]. Further details and back articles can be
accessed on his firm’s website on
www.westminsterthailand.com.
Leslie Wright is Managing
Director of Westminster Portfolio Services (Thailand) Ltd., a
firm of independent financial advisors providing advice to
expatriate residents of the Eastern Seaboard on personal
financial planning and international investments.
Dear Hillary,