Time in the Market vs. Timing the Market

Time in the Market vs. Timing the Market

Owaiz Dadabhoy: Alright. Good afternoon, everyone. Thank you for joining us for this month’s version of our webinar. As we do every single time—and I don’t know if all of you have joined in the past—we like to give you a top ten list right in the beginning. And that is a couple of reasons. It’s something different than the actual presentation and it allows for other people to start joining a minute or two late. But since you joined right on time, we wanted to give you something, some kind of, you know, information. So, since our topic has the word “time” in it today, I thought I’d offer up a top ten list of why some people feel like they don’t have time. So, I’ll start with number ten... and I got this from a website, so it’s not my doing, but I thought it was really interesting. They are negative and have bad attitudes. Basically, they’re always saying they don’t have time which leads to really feeling that way. Number nine, they don’t review their scheduled regularly hence often they end up wasting their time and energy on things that are no longer helpful to their cause. Number 8, they’re too concerned with being fast. It’s better to focus on emphasizing smooth functioning versus being fast. Number seven, they don’t have a daily routine. Number six, they are easily distracted. How many of us are affected with that? Number five, they don’t prioritize and rank their tasks in order of importance. So, they end up going after the monkeys instead of the gorillas, right? The small things on their list instead of the big ones. Number four, they are not organized. This leads to looking for misplaced items of importance to get their tasks done. Hopefully, you don’t resemble too many of these so far. Number three, they don’t track or budget their own time. Number two, they multitask a lot. And according to Stanford University research, multitasking is less productive than focusing on one item at a time. It also—according to them—damages the brain since the human brain is not capable of focusing on multiple tasks at one time. And number one, the number one reason they gave here, is they don’t rise early. Most of us have a 9 to 5 schedule or maybe a little bit longer than that. But getting up earlier allows you to get some of the other things done so you can properly focus on what’s at hand. Analysis of the most successful people shows that they start their day early and people who don’t rise early are often the ones most likely to complain that there isn’t enough time. So, hopefully we can all make a goal to not get caught up in these traps and with that, we will get started. As-salamu alaykum to everyone. Greetings of peace. We welcome you to our monthly webinar, this time focusing on the topic of market timing versus time in the market. We will define it and go through it. We have an amazing slide deck. I don’t usually say that, but we really have a terrific slide deck for you today, so hopefully you’ll enjoy it. Are we making good long-term decisions? Or are we finding ourselves making emotional decisions based on one day, one week, or a month of stock market performance? We have seen a great period of growth but there surely will be another hiccup in the future and we will show you how many hiccups there were in the past. How will we react and how will our reaction affect our portfolios? Will we continue to dollar cost average into the market and build up our portfolios for the long-term? Or will we quit, right? Because we got scared of one month’s worth of performance. If you are overly concerned about the day-to-day performance of the stock market, maybe you have constructed an overly aggressive portfolio. Or maybe you will need the money soon and you should rotate out of stock funds and into something like the sukuk fund, which is called the Amana Participation Fund. We can help with all of that, and we will show you at the end of the presentation how you can do that. Today we are going to have some best practices and great historical information for you to help you navigate through the future. And I have, joining me today, two members of my team: Haitham Al-Sayed and Sameer Sarmast. They’re on the flier which I’ll show you in just a little bit. The opening presentation page. Haitham joined Saturna Capital as Regional Manager in 2016 after working for TIAA-CREF and Wells Fargo’s wealth management group. Haitham has an MBA from Thunderbird school of management and lives in Irvine, California. And Sameer Sarmast came to us in 2008 as Regional Manager and Financial Planner. Before joining Saturna, he worked at JP Morgan-Chase and before that, Wachovia. Sameer has a master’s degree in leadership from Northeastern University and he lives in New Jersey. So, now, a reminder as we do each time that we will be recording this session today for eventual playback online and you can place your questions in the chat group, and we will get to them... maybe during the presentation but definitely after the presentation. Alright, so, time in the market versus timing the market. And, as I said, so when you’re looking at time in the market, that means how long will you remain in the stock market itself, versus when do you want to have your, you know, your introduction into the market and then you’re selling at a time that you think the market is high. And are you able to time it? And that’s what we’re going to talk about today. So, some of what we will talk about involved specific numbers, you know, return percentages, performance over time, and obviously, any investment is going to have different kinds of risks, charges, and expenses, so you’ve got to review that. Many of you are already investors in the Amana Mutual Funds, so you have hopefully read our prospectus or our summary prospectus which can be found on the website right here. Or of course, you can always contact this number. Also, feel free any time to take a screenshot of the information that we’re sharing with you so that you can review it later, as well. Probably in a month or two, this will go onto our website. It does take time for a compliance review and modifications before we put it back on the website. So, with that, we’re going to get started with our first slide here, which is defining what is market timing. And Sameer Sarmast will take it from here.

Sameer Sarmast: As-salamu alaykum, everybody. Thanks for joining us. Appreciate you taking your time out of your busy schedule to be with us. I’m going to kick it off with, “What is market timing?” Market timing is essentially taking... pretty much assets, any of your stocks, you may ask the question to your financial advisor or to one of us and say, “Hey, when’s a good time for us to get in?” Right? We get that all the time. So, the reality is we don’t have a crystal ball. If we could do that, we probably wouldn’t be here talking to you today. So, market timing, okay, it’s a strategy that folks use, and it involves them moving in, buying in, okay? And then selling at different times. So, it’s almost like... whether it’s educated or whether it’s a good guess or getting lucky or speculative, they’re able to do this market timing strategy. When we say, “between asset classes,” it could be moving from large cap stocks into cash or vice versa, right? You know, so people see the market... we could take an example, and I know Haitham is going to go through some historical data of, you know, events that could have triggered some investors to do some market timing. So, many investors, academics, financial professionals believe it’s impossible to time the market. You know, and then there are other people that would disagree with that. So, here we are, the typical investor, right? Retail investor like myself and most of you on this call. This kind of strategy would probably not be recommended. So, what I also want to talk about here is, you know, it’s also an opinion, right? Whether it works or not. You know. Again, some people will strongly believe that it’s a great strategy to do so, and some would say, “You know what? You’re gonna end up losing out in the long-run.” And typically, that’s what ends up happening. You know, if we look at a long-term strategy... what we’re trying to do is not predict the future. Right? So, when you try doing that, instead of staying invested, there are days you’re missing. There are opportunities that are being missed because by the time... let’s say, for instance, the market starts going down. Markets go up and down. That’s part of the, you know, how markets react. Every year, there’s going to be a pullback, there’s going to be a correction, so to speak. If you work with an advisor, you work with one of us, we will come up with a plan, your goals, and we’re going to try to help you achieve that goal by using, obviously, our Amana Funds or any other investment strategies. Rather than... “Oh, worrying about what’s going on. You have to, you know, learn how to manage emotions, really, and cancel out the noise that’s going on in the news or whatever. Of course, it’s tough to do that. It’s hard-earned money. Everybody has worked hard for their money and, you know, it gets very... it can get nerve-wracking. It can get very emotional. So, what we’re trying to say is look... just, you know, stay invested. If you have that time frame, right? Someone who needs the money within one to two years, probably would need to shift out into something else that’s a little more conservative for them. So, now, the other point here is the average investor does not want to spend hours watching the markets. Who has the time? I certainly don’t do that because I have to make my time for you, right? My clients. I have to be available to answer questions, to help you out, achieve your financial goals. So, same way, you probably have jobs that you need to focus on and can’t do that. This is why a buy and hold strategy works for the typical retail investor. So, managing emotional reactions. Here we have a chart, right? This is pretty much a 50-year period and then it goes on... It’s 50 years in the past to December 31st, 2020. And this talks about all of the different historical events that happened and, you know, could have caused emotional reactions from investors. The Energy Crisis... you know, the markets were down 43% then, okay? But as you see this line, this blue line, right? You’ll see a steady increase and then you have Black Monday back in the 80s. The market went down 30%. Again, what happened? Yes, it went down but it steadily started increasing. Then, remember Y2K? The Dot-Com Bubble. That happened, as well. Markets went down 47% and when I say markets, we’re talking about the S&P 500. So, it went down 47% and then what happened? You see that increase, again, and then where are we now? 2008, right? One of the worst financial crises in our recent history. And I mean, I remember that very clearly. I was at Wachovia at the time, which is now Wells Fargo. And you know, people were scrambling, trying to sell everything and what happened? 2009 came around. Everything started going back up.

Owaiz Dadabhoy: Thank you for that. Now that you’ve entered that period of difficulty on your WIFI, it might come back, so, that is the end of your part of the presentation. So, we thank you for that. That was great information. Sameer was talking about commissions going in and out of the market. That really is talking about individual stocks because you’ll have trading fees, most likely, so you might be paying five dollars to fifteen dollars, maybe twenty dollars per trade, each time: when you buy and when you sell. Fortunately, with the Amana Mutual Funds, there is no in or out charge but there is of course the ongoing annual management expense. So, with that we are going to pass it to Haitham. By the way, you can see, and I forgot to click on here, you can see that the period of 13 years in the first part of that slide is 845% increase. So, you can see for yourself what happens after the typical nightmare scenario of 43% down during that period of time. So, with that we’ll go ahead and move to Haitham Al-Sayed who will talk about bull and bear markets.

Haitham Al-Sayed: So, when we look at bull markets... they have historically lasted longer than bear markets. And the same time period that Sameer just shared on the charts, from 1970 to 2020, which is a 50-year period, bull markets had an average growth of 403% while lasting 7 years and 4 months... versus bears, -42% on the decline, only lasting 13 months. You know, market downturns happen frequently but don’t last forever. If you look at it, the history of the markets demonstrates that market declines are just part of investing. It’s inevitable. And they happen frequently but don’t last forever. So, if you look at a 5% decline in the market, the size of a 5% decline, its average frequency is about every 10 months and the last one was August of 2019. I’m not going to go through each one but if you look at the 20% decline, that happens every eight years and the last one we had was during COVID last year. And if, before 2020, if someone had told me or told any of us that the market is going to go down 34% and then jump back 60% in a short period of time, everyone would have said, “You must be crazy,” but that’s what happened. And so, again, I just wanted to point out here that the frequency of the down markets are less frequent and they typically last less of a time period. Here, we want to look at something... to not really over-review your portfolio and to really—and Sameer mentioned this in the beginning—to tune out the noise. If we look at, from 1970, again, a 50-year period, we’re staying with... if you look at your portfolio on a monthly basis, you would have seen that the gains would have been 63% and the losses would be 37%. But, if we tune out the noise and stick to the plan, because you know, anxiety comes in when we see down markets, when we’re emotionally tied to this. And you should leave the emotional part outside and let professionals like the portfolio managers or the financial professionals manage the money because there’s no emotion tied to it. And if you look at that same portfolio less frequently and look at it on a 10-year period basis versus a shorter time-period basis, your gains during that 10-year period would have been 91% versus a loss of 9%. So, the more you watch your portfolio, the more you might lose. You know, having a plan and sticking to the plan is more important than anything when it comes to investing. If you look at the green line and we said, “Our plan in 1989 was to invest $10,000 and have an average return of 8% per year, you would have a nice, steady flow from the end of that period, you would have a nice return of about $100,000 or account value of $100,000 and some change. However, if you can see the blue line, the markets due fluctuate and do have tendencies to go up and down. And let’s say, for example, we put an anchor in our plan that... you know, when the market went up in 1996-98, we said, “We want to increase that average return, so we reallocated some of our portfolio and we wanted an average of 10% return.” And then, a few years later, the market... the financial crisis of 2008 happened, and we pulled away from it. We would have lost on ours gains or probably lost on our principal as well. But if we stuck to it and stayed steady, our plan would have resulted in $211,000 and some change. So, again, I can’t emphasize the importance of staying, you know, in the market, adapting your strategy to be in the market, and I think what Owaiz mentioned earlier is that the question is, well, when do I put in all of this money? Do I put it all in one lump sum? That might be a strategy and you might be lucky on a day when the markets are down. But maybe doing dollar cost averaging and spreading that risk and spreading that... and buying high and low and averaging that price might be a more effective strategy. So, again, keep that in mind as you think about entering and when to enter into it. It is important, also, to stay the course by staying invested. So, again, another look at how each year, the market highs and lows happen. You can see that the orange line represents the largest declines from a peak high to a trough low that occurred each year. The S&P market, however, index, had positive year-end total returns in 18 of the 20 years from 2001 to 2020. Again, 18 out of the 20 years the S&P had a positive return. And on this chart, or this slide, this gives you the 20 worst trading days over a 20-year period followed by the 20 best trading days. And if you look closely, you see that after the market decline if not the next day, or the following few days, the market had a nice positive return. I think in one of the... in ’08, there was a decline of 5.3% and the next day was a positive 6.4%. So, again, this is very important to suggest... that you know, emotionally, what could happen is that we see our portfolio being depleted because the market declined for a single day, and emotionally, the triggers in our brain and we can have a whole new webinar on behavioral finance is that... you want to pull the money because you’re scared that you’re going to lose more. And in fact, if we don’t do that, and we look at it from a long-term perspective, that really should be coming on the positive side over a longer period of time. So, jumping in and out of the market can be costly. So, with that Owaiz, I’ll turn it over back to you.

Owaiz Dadabhoy: Alright, thank you for all of that great information. If you’re buying $500 worth of some fund every month, and the price of that fund goes down, now you’re buying more shares of that very same fund. So, it works for your 401(k) and it can work for all of your other accounts, as well. You know, when we go out there, we speak to people, these days by Zoom, we find, when we ask them the question, “Where’s the majority of your money?” Almost always it’s in their 401(k). And why is that? It’s because they’re disciplined. They’re not moving in and out, they’re not thinking about it every single day... hopefully. And so, they’re not making as many changes. And the other thing that they’re doing is they’re dollar cost averaging into the market which means that they’re buying on a bi-weekly basis, every two weeks they’re buying. They’re buying at different levels of that fund price and over time, that is a definite benefit to an investor. What we’ve done on our website is put together something, hopefully, that you’ve all taken a look at. If you haven’t, I really ask you to do that. It takes about five minutes to do. It’s on the front page of our website. It’s called the Amana Fund Selector. We have customers that go way back, all the way back to 1986, when we first started the Amana Income Fund. And we have customers that bought then and only have one Fund or added the Growth Fund in 1994 but haven’t done anything since then. Right? So, the Growth Fund invests in growth companies, as the name Growth suggests, and about 45% to 47% currently is in technology. About 20% is in health care. And the rest is spread amongst other sectors within those growth areas. But we’ve also added a Developing World Fund in 2009 that you should consider and in 2015, our first fixed-income type of product, which is similar to a bond fund but is actually sukuk... so, instead of being debt-backed, it’s actually asset-backed or asset-based. Now, if you haven’t taken the Fund Selector quiz, you may not know about these other funds. What I would ask you to do is go to this particular page of our website. Right on the front. Click on “try it now,” and answer the, I think, six or seven different questions. It will give you a result. It will tell you if you’re an aggressive type of investor or maybe a moderate or a conservative investor. And based on that result, it will suggest a model for you. It might say 75% Growth Fund and then the rest spread amongst the other three funds, or it might tell you 70% in the Participation Fund, which is the lowest-risk type of fund that we have compared to the stock funds. So, if you want to invest and do it in a way that is more methodical, do this. Especially for those of you that may have started a long time ago and have not looked at it. And you can take this as many times as you want. It is free of charge; you can take it more than one time right away. So, when you first see it and you’re like, “I’m not that conservative,” you can go back and take it again. And you can do this for all of your accounts. So, when you’re thinking about your joint account with your spouse, you might be looking at it more aggressively. When you’re thinking about your child’s education account, you can put that mindset on and take the quiz again, because your child might be going to college in two years, and you might be withdrawing that money from the education savings account. There are so many different types of investment types, right? So, you have, for example, metals. Precious metals. You have small-cap stocks and mid-cap and large-cap. Emerging markets. You have housing market, etc. What we want to show you here is that, you know, if you’re only invested in one thing... if you’re only invested in, let’s say, the Income Fund, which is large-cap dividend companies, that particular subset might do well in one year and then it might be in the middle of the pack the next year. So, you know, you may be going up and down with that. But if you also have large-cap growth stocks then that might be doing better when the other one is not doing as well. Same thing with sukuk. So, it’s better to have a good mix and allocate your money in a very methodical way. So, we would be happy to help you with that. We’re going to share out contact information but a great first place to start—and to let your family members know if they’re investing and not on this call—is to go to the Amana Fund Selector. Now, we put some takeaways here for you. As you know, history has definitely shown us that markets react to shocks in the short-term like what we had with the pandemic last year, which we’re still going through now, but you know, there has been changes in how the market is reacting to it, and patient investors are definitely rewarded for that over the long-term. Emotions, as Haitham had mentioned and Sameer as well, it doesn’t make for good investing because if you had sold in March of last year a stock that... let’s say an individual stock that was $100 that went down to $20, and now is back up to $100, you lost and somebody else gained. Same thing when you own a fund. If it goes down in the short-term... then goes up again later on, you might be buying high and selling low. There are three strategies to live with market volatility. One is to stay calm. The second one is diversification and asset allocation which is what we are talking about. And then, remember your strategy, right? When the emotional time comes and everything seems like it's going to the negative, just remember your strategy and the decision you made to remain unemotional and to remember the history that we just took you through. So, with that, the final words are about risk. You know, if you’re investing in the stock funds like the Income, Growth, Developing World Fund, there is stock market risk. There are different kinds of risks that are incurred there, including currency risk with the Developing World Fund. The Participation Fund has its own risks, which you can read about here and take a screenshot of. And so, it’s good to know what you’re getting into and many of you have lived through this already, so you know the ins and outs of the market. If you want to take a screenshot of this, again, my name is Owaiz, and my name and contact information is there. Sameer is the regional manager in New Jersey and then Haitham Al-Sayed is on the west coast along with me and he is in southern California. We also have one of our colleagues, Amjad Quadri, in Chicago. Alright, so that’s enough of the screensharing, there. We thank you for listening to that part of our presentation. We want to see if you have any questions and I’m going to look at the chat group now and alright, let’s see... The first one says, “I’m a longtime Amana Funds investor. If I were to select a stock outside of Amana to diversify, what content about the stock do you review to make sure its halal? I know the revenue from haram sources should be less than 5%. Where should I look for this information?” Haitham, do you want to take that one?

Haitham Al-Sayed: Thank you for the question. Great question. The first thing is that we do have an independent Shariah compliant auditor called Amanie Advisors based in Malaysia that audits our buying and selling every quarter and it’s available on our website for each fund. The certification letter. Number two, and specifically the 5% rule as far as the quantitative filters, is that we cannot purchase a company that earns more than 5% from haram resources as a secondary form of income. I’ll give you an example. Clearly, when we used to own Amazon and then they went and started selling alcohol... now, it’s less than 5% of their overall revenue but because they’re in the product business and alcohol happens to be one of their products, we—based on principles—had to sell our position from Amazon. So, I don’t know if that answers your question.

Owaiz Dadabhoy: Yeah, that’s great. Thank you, Haitham. We can ask you this same question about, can you explain a bull versus bear market?

Haitham Al-Sayed: Yeah, well, let me give you the figurative meaning I learned in business school. So, the bull, obviously, has the horns, and so you think of the bull as upward movement. And the bear with the claws coming down as a down market. But, typically, it’s easier to define what a bear market is first. A bear market is when the main school of thought is that when there’s a 20% decline in the market, it tends to have what’s considered a bear market. And so, a bull market is where you have positive returns—continuous positive returns on stocks.

Owaiz Dadabhoy: Okay, very good. Thank you for that. Somebody asked... we almost always get a question about education savings accounts. What is the best strategy for education savings accounts? Now, that question is quite wide. So, I think that one of the first things you want to look at it is if you have six, seven, ten, fifteen, eighteen years, you can be a little bit more aggressive. If you only have a year or two left before your child goes to college, you have to get a lot more conservative, because let’s say, you have that bear market in the last one or two years that you own that education savings account, you’re not going to be happy having to withdraw it when that time has come. So, what you can do is, again, take that Fund Selector questionnaire on our website. If you have more detailed questions about what you should be doing or what... how you should be looking at this, contact one of us. You saw our phone numbers. We’d be happy to help you. Is it possible you can share some details about the sukuk fund? And is it recommended? Any risks? So, when you say “recommended,” we like the Fund very much because what it does is it gives everyone an opportunity to have a different type of investment. So, I’ll give you a quick example. We work with some of the financial advisors that may have a Muslim client and they say, “Look, we’re gonna use your funds with this client and all we have is the Income and Growth Fund.” Right? This is looking back before. “And so, our compliance department won’t allow us to open this account because there is not any fixed income. Usually, we would put 30% or 40% bonds for this particular client.” And so, we created this to be able to overcome that, where financial advisors can use the Participation Fund to have a better balance in the overall portfolio. But we also have parents, and our parents are investing in the Funds and before, they only had the Income, Growth, and Developing World Fund, and so they were 100% invested in stock markets but they might be 70, 80, or you know, 90 years old. And they may be using that IRA account or other accounts that they may have, they may be using it on a monthly basis, so they shouldn’t have 100% of their money in that type of security. So, we also created it for them. So, we definitely ask that you look at it. If you go to our website and click on... right on the front page, click on Participation Fund, there are a couple of videos: one where I’m interviewing the portfolio manager, Patrick Drum. I think it will give you a good basis. And also, a short video is there, an animated video for about 3 minutes or so, which tells you what the differences are between bonds and sukuk. Alright... “If I buy Amana Funds over time, when I sell some shares, would it be considered from the first shares I bought? My point is, how is the tax calculated, short-term or long-term gain?” So, the answer to that one is, when you’re selling you could contact us when you’re making that sale and tell us that you want to use the first-in, first-out method, or the last-in, first-out method, and then there’s another method as well that you can look into. So, you can be the master of that decision. The other thing that I will mention here, which I think that everyone should look at because the time of Ramadan is coming, so for Muslims on the call, you’re going to be giving out your zakat and other donations during that month in a larger amount than you’d normally be, perhaps. And if you have stocks or funds of any kind somewhere and you’ve held them for over a year. You have an increase in them. So, the two things you have to keep in mind when you’re looking at this is, “Did I have an increase? Is it higher than what I bought it at? And have I held it for more than a year?” If that’s the case, you can actually transfer your shares in-kind to a charity. And therefore, all of the shares will go over, you receive a donation receipt for the full amount, and you don’t pay any tax on any of it. I don’t see any other questions. If somebody wants to unmute and ask us a question, we’ll be happy to take it.

Attendee: As-salamu alaykum.

Owaiz Dadabhoy: Alaykum salaam.

Attendee: I have a quick question. I have an IRA rollover with you guys since 2013. Does that also apply for zakat al-mal? I mean, do I have to pay zakat al-mal on it, even though, like, I’m not using it. I’m not getting any distributions from it at the moment.

Owaiz Dadabhoy: So, we’ll give you the shorter answer, hopefully. Because it is a longer subject. But if you go to our website. I keep pointing back to the website because we do have a lot of resources there, but I will answer the question, too. If you go to the website and look for the webinar on zakat, we talk about it there. But the answer is this: that there are different schools of thought on this, right? I won’t mention the different scholars in America that have opined on this. One does say, and he has people that follow that as well, that you do not need to pay on any accounts that you don’t have access to. The majority of scholars that I have spoken to... I believe this is the majority opinion, is that there needs to be payment of zakat because there are people in need. And, you know, you hear about things called tax shelters, where you put your money aside and you’re not being taxed on it, like an IRA. What they want to get away from is having a zakat shelter, where you’re putting money aside to not have to pay zakat. But just... you asking that question means that you’re concerned about this. One way that people do it is they pay on the full amount of their IRA or 401(k) or maybe they use the other minority opinion, where they don’t pay until they have to, when they’re able to withdraw funds. And the other one is they subtract the amount of penalty and perhaps even taxes that they would pay if they withdrew the whole amount, right? So, if you had to take your IRA out of the retirement account and you put it into a regular account to figure out what your zakat is, they would say that you could subtract the amount of penalty and taxes, as well. So, if you had $100,000 and you’re going to get penalized 30% or 10% with tax, so let’s call it 30%, you would pay zakat on $70,000. There is an issue with that, if you do that year after year, you’re subtracting tax and penalty every single year on the same amount of money. So, what I would do is you can go to AMJA Online and look at their fatwas or talk to your local scholar as well and see what their opinion is as well. Thank you for the question. Do we have any other questions?

Phelps McIlvaine: Owaiz, I was going to ask you to talk about the low portfolio turnover in the Funds and how that reflects a limitation on speculation in Islam.

Owaiz Dadabhoy: Yes, so if you take a look at the typical portfolio—mutual fund—out there, without naming any names of course... you may find that you have a turnover percentage of 20%, 30%, 40%, 50%. What that means is that portfolio manager is selling the stock, selling some of the stocks within the funds and then buying something else. And what that does is it creates a capital gains, even if you’re not personally selling. It creates a capital gains which impacts you in taxes. What we do at the Amana Mutual Funds is we have, you know, we don’t want to speculate on things, so you won’t find us buying the newest stock, the IPOs, you’re going to find us purchasing in a more conservative manner without speculation. And so, what that ultimately does is it takes away some of the risk in your portfolio, but it also takes away from the taxes that you will incur because of our buying and selling. Thank you for that, Phelps, who is a portfolio manager at Saturna Capital. How much is the tax on the short-term gain? Within a year from buying the Fund. I haven’t looked at it lately, but I believe it’s 20% and long-term might be 15% Phelps, do you have an answer on that?

Phelps McIlvaine: I don’t want to speculate; I think you’re right. Sounds about right.

Owaiz Dadabhoy: Simple Google search should help you on that one. Just look up long-term capital gains rates in 2021 and same thing for short-term. Good question, though. Thank you for that.

Haitham Al-Sayed: There’s a question on financial planning services.

Owaiz Dadabhoy: Okay, go ahead and read that one off.

Haitham Al-Sayed: So, the question is, you know, is there a charge for financial advice from Amana if you’re currently an investor? We do offer financial planning but, you know, which encompasses looking at your retirement goals, looking at education planning goals. And that is complimentary if you have $125,000 with us or outside Saturna, we’d be able to... either myself or Sameer, based on your location... if you’re west of the Mississippi it would probably be myself doing the plan. If it’s the other side, it would be Sameer. And we would happily provide it for you. Otherwise, it’s a $500 fee to do the financial plan, but it’s a holistic financial plan that looks at your timing goals.

Owaiz Dadabhoy: And if you’re not at that level, you’re already investing, you go to the Fund Selector app and you still have some questions, we will be happy to assist you and, you know, talk through that with you and assist you. So, without a charge. That’s what we are here for and that’s what we love to do. The people on our team, we love to educate and inspire and motivate people to come up with their financial goals and then try to have them fulfill their financial goals. So, it would be our pleasure to talk to you. “What’s our take on cryptocurrency? Especially Bitcoin. Is it Shariah compliant?” I know people that have done talks on this on YouTube, and I try not to talk about this because it’s not what I live and do every day. I do have my opinions, but I will spare you my opinions and point you to... again, go to AMJA Online if you want a fatwa perhaps or if you want to look at a YouTube video you can do that as well. “Do you do zakat calculations based on the calendar year or from one Ramadan to the next?” We currently do them for the calendar year and we just completed them and will be mailing them out tomorrow or perhaps early next week for last year. You can sign up for that on our website in the zakat section. You basically just sign up for it and we will do it for you every year. Hope that answers the question. Contact us if you have any other questions. My email address, as a reminder, is [email protected], specifically for that kind of question.

We thank you for joining and we’ll be back at it next month. We’ll be taking about tax advantageous type accounts, so qualified accounts and well talk about the donor advised fund as well. We did that last year and that’s on our website, I believe it was in October, but we will be incorporating that into our next one in March, so be on the lookout for that one. “Is there any session to get education on basics on financing?” Contact us directly and we’ll see if we can answer that one. Again, I gave out my email address, contact me. One quick note Phelps reminded me about, is that you can go to Charity Navigator if you want to find it. You mention that there’s an organization near me and they are contacting me and they want me to donate to them but I don’t have any earthly clue if they are a legitimate organization or if they are running their finances properly, do they have rating –  you can go to Charity Navigator and punch in your favorite charity or a new charity that’s trying to seek assistance from you or donations from you, they’ll give you information about them, so that’s a really good tip. Another quick tip and then we’re going to end the session, when we are calculating zakat for you on an annual basis, at the turn of the year we’ll send you the report for 2020 as an example, so again, tomorrow or early next week we’ll be sending out a letter, that will be for 2020. What we don’t do is actually pay the zakat for you. That is something that is in your hands, you get to make those decisions. We just tell you how much it would be according to one type of calculation. If you have more questions on this, please feel free to reach out to us. With that, we thank you again for listening. We look forward to having you join the next one and we want you to go to our website and check out previous webinars to get some additional education and also the Halal Money Matters podcast which is sitting on our website and also on Google Play Store and the Apple Application Store as well. Thank you very much. Thank you to Sameer, Haitham, and all those that asked questions today and participated and stuck around with us the entire presentation. Take care, as-salamu alaykum.

Please consider an investment’s objectives, risks, charges and expenses carefully before investing. To obtain this and other important information, which you should carefully consider before investing, about the Amana Funds in a free prospectus or summary prospectus, please visit www.amanafunds.com or call 1-800-728-8762.