The fear of a “global melt-down” continues with the JSE down 31% over the last month. If you did not take our advice a few months ago to de-risk your portfolio, now is the time to re-evaluate your investment process. Please read our views on how this crisis will pan out and how Investonline can help you manage your investments in this difficult time.

Two weeks ago, when the magnitude of Covid-19 became clearer, we advised on the value of de-risking your investment portfolios. This advice followed our newsletter from a further two weeks before, where we warned that offshore markets were risky. With global panic escalating as the reality of an economic decline unfolds, what will the effect be on investment markets? Please click here to read further.

The global spread of the Coronavirus is a major concern resulting in stock markets plummeting. Further downside is likely as fear grips the world until a ‘cure’ or vaccination is found. I have worked through three previous stock market crashes – 1987, 1998 and 2008. The experience was both sobering and frightening as all three crashes had one thing in common, fear. With the stock market down 10% last week, is the Coronavirus scaring the stock market into another crash (down 30% to 50%)? We look at the facts so far, what to expect and how to manage your investments through this time of significant uncertainty.

For retirement, our investments must achieve an after-tax return above inflation. This is easier said than done within the constraints of prevailing volatile markets. Safeguarding your money in the bank while earning interest will make you poorer over time as inflation erodes the value of your investments. We assess how much you need to earn to beat inflation after-tax and suggest a low-risk investment strategy to achieve this.

In the current environment, it may feel right to be investing all your money offshore. This view may also be supported by the data that global equities returned 17% p.a. over the last decade. However, currently, global equities are generally risky as they are expensive, and therefore, one needs to be careful with an offshore investment strategy.