Investing can be difficult. It is often counter intuitive. Buy low when everything looks bad and Sell high when all looks fantastic. We have summarised a recent Allan Gray article showing how frequently strong returns have followed periods of low returns such as the market has experienced over the last five years.
The current 2018/19 tax year is drawing to a close on 28 February 2019. During this time, it’s important to remember to make use of certain deductions and exclusions for the year such as topping up your retirement annuities and tax-free investment, and utilising your annual capital gains tax exclusion.
We have also summarised five ways that investors benefit from contributing to retirement funds (annuity, pension, provident) and how excess contributions to these funds can still provide significant advantages in future years or during future events.
The Prosperity Worldwide Flexible Fund of Funds, which I co-manage, continues to produce solid, steady performance despite the prevailing volatile markets. The Fund is ranked 3rd out of 47 funds in its Morningstar category. In an exceptionally difficult market environment, Prosperity has produced a steady 7.64% per annum return since its inception in September 2014.
2019 offers good investment opportunities, but key is where to look. With some critical local and international changes, sector allocation will be crucial: local vs offshore, developed vs emerging markets, large vs small companies and different sectors. It will be a stock picker’s market resulting in big differences in investment fund performances. See our views.
2018 has been an extremely frustrating year for investors as markets have fluctuated wildly. The JSE All Share and World MSCI Indices’ returns year-to-date are down 11% and 2% respectively in Rands. Equity markets by nature are volatile and this is a critical aspect that investors need to understand and tolerate. Markets have corrections and these occasions require patience so that investors may benefit. Corrections are when valuations are normalised or brought back to their long-term averages. Investonline has had another good year as clients have benefited from a lower risk investment strategy resulting in our average risk-profiled portfolio outperforming the industry average by 3%. We believe investor returns will be better in 2019.