South African markets continued to show resilience during August (SA Equities up 4.6%), supported by improving investor sentiment, attractive bond yields and strength in resource and financial shares. Commodity prices, particularly gold and platinum group metals, remained supportive, helping offset the country’s ongoing growth challenges. Over the past few months, a more stable fiscal backdrop…
Light at the end of the tunnel for borrowers – and investors The interest rate hikes central banks implemented over the past two years have been so aggressive that economists have consistently warned central bankers against overdoing it and running the risk of driving economies into recessions that would be exceptionally hard to turn around.…
“Our bigger challenge… is that our pie is not growing fast enough and this limits our ability to generate sufficient revenues to distribute among our priority areas.” (Finance Minister Enoch Godongwana – Budget 2024) Finance Minister Enoch Godongwana’s third Budget Speech in an election year contained few surprises, but also little in the form of…
“Diversification is protection against ignorance. It makes very little sense for those who know what they’re doing.” (Warren Buffett) This is all very well, Warren, but we can’t all afford excessive risk. For this reason, Harry Markowitz coined the phrase that diversification is the only free lunch in investing. The concept is that owning a…
“If you don’t know where you are going, you’ll end up someplace else.” (Yogi Berra) A sound financial plan is invaluable. It looks ahead to what you want from your money and gives you a way of measuring how well you are doing in getting there. It gives you a lot of confidence to be…
Investor sentiment turns sour Investors’ initial vote on the government’s Budget was positive with the rand firming and bond yields declining. But sentiment soon turned negative once the details and ramifications of National Treasury’s decisions were fully digested. Initially the rand strengthened to R18.825 against the dollar, gaining almost half a percent on the perception…
According to the Cambridge Dictionary, a gambler is “a person who risks losing money in the hope of winning a lot more money.” An investor, on the other hand, is defined as “a person who puts money into something in order to make a profit.” Several pots on the boil One of the biggest differences…
“Opportunity is missed by most people because it is dressed in overalls and looks like work.” (Thomas Edison) According to the most recent Forbes 400 list, which names the richest people in America, hedge fund manager Ken Griffin is worth $35 billion. That makes him the 22nd richest person in the US. He is also far…
RAs: The big one Retirement Annuities (RAs) offer significant tax breaks as contributions to the investments are tax-deductible, and the growth within the funds is tax-free. (No income, dividends or capital gains tax applies.) You can contribute a maximum of 27.5% of your taxable income to retirement funding each year, up to a maximum of…
A tale of two economies US stock markets continued to gain momentum as January progressed, reaching successive new record highs in the second half of the month as investor confidence in the central bank’s ability to engineer a soft economic landing and reduce interest rates increased. That contrasted with South Africa, where the Reserve Bank’s…
“We cannot reason ourselves out of our basic irrationality. All we can do is learn the art of being irrational in a reasonable way.” (Aldous Huxley). The madness of crowds None of us are rational investors. We’re humans – fuelled by fear, overconfidence, and sometimes greed – to survive. Psychologists have long argued that we…
