Political change and what it means for the South African investment markets

Please read my report on the effects political change should have on your investments and our view on global markets. Some SA investors have not grasped the enormity of the political change in SA with Cyril Ramaphosa being elected our new president. It seems as if South Africans have become numb to any positivity after being trampled into negativity and distress by the Zuma administration. Is it a new dawn? Yes, it certainly is, and the stock market is significantly underestimating the growth potential.

How are Allan Gray’s portfolios positioned to protect and grow capital?

Investment industry portfolio returns have been disappointing over the last three years with the average South African aggressive, moderate and conservative unit trust portfolios producing annual returns of only 3.3%, 4.8% and 5.6% respectively. This is before yesterday’s JSE All Share Index decline of 2.5%. Most returns over the last three years are well below historical returns and expectations. Currently, the investment environment both locally and globally, is very mixed. Hence, many different outcomes are possible depending on where one is invested. Senior Portfolio Manager, Duncan Artus of Allan Gray, sets out different investment scenarios that are incorporated into portfolios.

The Stronger Rand – Bittersweet

The Rand continues to strengthen and consequently, your investments are suffering. Don’t beat yourself up as most South African investors (Fund Managers) have got the Rand wrong over the last two years as it has strengthened 25% to the US dollar. Will it continue to strengthen? What should you do? As a stock market analyst and having worked with some of the smartest fund managers locally and internationally over the past 25 years, predicting the direction of the Rand has been very difficult. At Investonline we have been accurate in forecasting the direction of the Rand.

Ramaphosa is new ANC President – a game changer

Last night, the ANC elected Cyril Ramaphosa as the new ANC president and it is likely that he will become the country’s next president. This could prove to be a game changer. Once again, Investonline’s in-depth research has paid off resulting in our clients having minimum offshore exposure and thus portfolios not underperforming, as the Rand resumes its strengthening, which we believe is likely to continue into 2018. The country has been waiting with bated breath hoping for a Ramaphosa victory. Many South Africans have been unable to see a positive outcome given the years of disappointment and frustration that we have endured with Zuma over the last 8 years. We believe 2018 will be a watershed year for the country and its key that your investment portfolio is structured appropriately. Read our report on Ramaphosa’s victory and our investment views.

2018 Investment Outlook, Politics and Steinhoff

2017 has been a very frustrating year for investors as continued economic and political uncertainty, both locally and abroad, led to very volatile investment markets. Although the JSE is up 13% in 2017, it swung strongly up and down by 5% to 8% in some months, heightening fears of losing money or missing out on gains. The 13% growth in 2017 has largely been due to one factor, Naspers – up 74% year-to date and contributing 11% of the JSE’s All Share growth. Putting Naspers’ contribution into perspective means that the rest of the JSE grew only 2%. Yet global markets have soared leaving many investors pondering what to do now? A famous banker’s quote just before the 2007 financial crash, “as long as the music is playing you need to get up and dance…” prompts due consideration on how to proceed, begging the question: Do you want to play/risk your savings?
Read our 2017 market wrap where we discuss our investment strategies going forward, the ANC conference outcome, Steinhoff’s collapse and a potential further downgrade.

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