As the world – and hopefully South Africa from 1 June – starts lifting lockdown restrictions, it enters the next phase (2) of dealing with the Coronavirus. Phase two raises a whole lot of new uncertainties to deal with: will infection rates start rising again, if so, how will this be dealt with and how will the economy recover?

Being in lockdown is tough as we live in “unchartered waters” with an uncertain future for many of us. With a bumpy road ahead for the rest of the year, an attitude of optimism rather than pessimism can get us through these difficult times. Read how optimism can bring some positive effects.

In this age of mega information flow, and its authenticity and veracity at stake – fake news – everyone has a different understanding of the risks of the Coronavirus and the future outcome. What we do know is that there are many unanswered questions and uncertainties surrounding the virus. This will drive irrational investment market pricing, which will result in ongoing volatile markets. So, what do we do?

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.

It is important for investors to take the time to assess their retirement investments at least once a year and check that they are on track to meet their goals.
Here are some important questions to assess your current retirement annuity, preservation fund or living annuity investments.

At the start of 2019 we predicted better investment returns, albeit a bumpy ride, and that is what we got. We expect more of the same for 2020. But don’t be too perturbed. If you have the right investment strategy you should beat inflation, evidenced by our low-risk, highly ranked, Prosperity Worldwide Fund that returned 16.4% in 2019. Please read our 2020 investment market outlook.