You know spring has finally arrived when you open the door and feel a gentle warmth in the air instead of the biting cold of winter. The same feeling is in the air when we open the door, so to speak, to look at recent developments in the South African financial markets – although the same can unfortunately not be said of the political and social environments.
We have seen some big l Read More
One of the most important strategies in investing, is getting the investing cycles right. To see if you are one of the few people who can do this, take the above chart of the year-to-date price and performance figures of the top 41 companies in South Africa and make your prediction on how this picture will look in one year from now, i.e. on 30th August 2020.
As investors we see only the latest news and make that our reality. We also tend to react emotionally to the current news and sometimes even act on these emotions, resulting in good or bad outcomes that cannot be attributed to prudent research but rather to merely good or bad luck. Read More
In Argentina a surprise election result heightened investor fears that populists could replace Argentina’s current, more business-friendly government, triggering a drop in the value of the peso against the US$ by 49% and the equity market by 43%, erasing all the gains for the year. Read More
A basic principle of investment is that you should be rewarded for the risk you take. Why would anyone invest in something where they get a lower return and take on more risk than in another investment elsewhere? South Africa used to be a country where the risk vs. reward ratio for investment was favourable. Because of the unstable political and economic circumstances in South Africa, uncertainty always lingered in the background and as an investor you were rewarded for this risk by getting higher returns on your bond and equity exposure. But over the past decade things have changed substantially. One of the biggest negatives for South Africa has been the worldwide investment shift away from resources into services and technological innovation. Read More
The Reserve Bank of South Africa has cut the repo rate with 0,25% to 6,5% starting 19 July 2019. The prime lending rate will drop to 10%. This will bring a little relief to everybody making debt repayments and even be positive for our shares. The negative side is that this drop will put pressure on the rand and, of course, highlight the problem with economic growth in South Africa. Read More
If you care about your physical health, you can either visit your doctor for an annual checkup, or only go when you feel sick. If you have your annual checkup regularly, the doctor will detect any possible signs of illness and prescribe preventative measures. If you go only when you already feel sick, you may already be in an advanced state of a dreaded disease. Exactly the same principle applies to your financial health; and you should regard your financial advisor as your financial doctor. Read More
After a disastrous end to 2018 we are back to almost all-time highs on the JSE and S&P500. If you need reminding; the JSE was down 12% and the S&P500 down 7% (currently up 16% ) for the year at the end of 2018. The rand was trading at R14,42/$ at the beginning of 2019 and gold was at $1281 per ounce. Read More