2023 Year-end Wrap

In this year-end wrap, we review how local and offshore investment markets performed in 2023, look at the key themes that drove markets, and look at some of the risks and opportunities for 2024.

Understanding Living Annuities

Living Annuity investments can form an important part of your retirement plan but must be incorporated correctly to achieve the best overall tax-efficiency, provide for a probable liquidity constraint, and ensue that the appropriate investment strategy is implemented.

We have detailed the key attributes of a Living Annuity and answered some important FAQs such as the difference between a living annuity and other retirement products.

High interest rates result in higher taxes

With interest rates more than doubling over the last two years, interest earners are paying significantly higher tax.

We cover examples of the higher taxes payable and recommend better investment return alternatives to interest earned.

Bond returns explained

Global bonds have been a topic of interest over the past year as they have been abnormally volatile and are reflecting a potentially higher interest rate environment for the next few years.

Bonds are often misunderstood as their returns are driven by their inversely related interest rates and capital values.

In this newsletter, we provide a simple explanation of bonds, what is currently driving them and our outlook for the bond market.

4th Quarter Market Outlook

Global and local investment markets remain volatile as investors battle to navigate the consequences of
higher inflation. The market is obsessed with whether inflation stays higher for longer or if it is pivoting
and ready to decline, with its trajectory described as looking either like Table Mountain or the Matterhorn.

Barring the US, the rest of global markets offer attractive value, despite some cautious views that inflation
may stay higher longer, which we believe is unlikely, given central bankers’ determination to drive inflation
down by sharply raising interest rates.

Selective global markets are attractive as we reach the top of the interest rate cycle. These markets are
European, Emerging Market and SA equities, and broad-based global and local bonds. SA equites are
particularly cheap per their 20-year low P/E valuations and the likelihood that interest rates are turning

Drawing financial planning lessons from the winning Springboks

The Springboks have successfully started their defence of their rugby world champions crown with two solid wins.

We feel that we should celebrate the exciting world of Springbok rugby and how the principles of teamwork, strategy, and determination can be applied to your investment and financial planning journey.

The rugby field and the financial world may seem worlds apart, but there are valuable lessons we can draw from both.

Tax and investment planning for emigration

Many South Africans have contemplated a possible exit plan from the country, either now or in the future. It is important to understand the major consequences that emigration will have on your worldwide assets, investments, and tax status.

In this newsletter, we tackle some important and difficult-to-understand financial issues regarding emigration, our obligations to SARS and how to invest now if you’re planning to emigrate.

The new two-pot retirement system

The new two-pot retirement system is scheduled to be introduced on 1 March 2024. We provide a basic overview of the new system.

3rd Quarter 2023 Market Outlook

Global investment markets continued their volatile roller-coaster ride in the second quarter of 2023, as markets remained focused on inflation and looked to rising interest rates for direction.

Higher inflation results in higher interest rates, which leads to slower economic growth resulting in lower company profits and lower share prices. The challenge lies in predicting the likely outcome of these changes, which often leads to extreme uncertainty and volatility.

The good news is that the inflation rate has started to decline and the global and local rise in interest rates appears near an end. This is positive for investment markets and especially for emerging markets and South Africa where valuations are at near 20-year lows. Peaking interest rates and low valuations create a favourable environment for strong investment returns.

Ensuring a smooth transition: Wills made simple

It’s crucial to have a proper Will to ensure your estate can be wound up smoothly on your passing and avoid the complications and stress this process can cause.

Therefore, Investonline has recently partnered with Capital Legacy as our preferred provider of Wills and Estate Administration. Capital Legacy will draft your Will, allow unlimited amendments and provide safe custody of your Will documents – at no cost to you.

In this article, we explain the simple process to draft or update your Will and answer some frequently asked questions regarding Wills and Estates.


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