Just a cautionary on investing during this gloomy economic climate…
any of our clients have invested in retirement annuities, pensions, preservations, pure unit trust investments in Allan Gray, PPS Investments and Itransact Exchange Traded Funds through us at SPIDDI INVESTMENTS. We keep an eye on how your investments are performing. From now onwards I will be keeping you updated on current issues pertaining to investments, retirement, life insurance, estate planning, taxation and general business. I will also try to remove the technical jargon where possible.
Starting with investments. The last two quarters of 2015 saw an unusual exodus of investment capital away from our local financial markets to offshore destinations. This was mainly due to our internal politics pertaining to the Finance Ministers’ debacle and the impending downgrade of our country to a junk status. However, it is not advisable to purchase foreign shares that are denominated in strong foreign currencies using a weak rand. It is too expensive!
One good principle of prudent offshore investing is when the rand is strong and offshore markets are cheap. Currently, neither is the case. What must you do then? One thing that is best to do now is – TO DIVERSIFY. Delay taking your money offshore because both the local and global economic outlooks are cloudy and you do not want to be caught in the turbulence trying to move your investments offshore. In any case, at SPIDDI INVESTMENTS we are allocating your investment assets in funds that already have a fair amount of offshore component. For example, most of our clients have been allocated to at least one or two of Allan Gray Balanced Fund, PPS Balanced Fund of Funds Class A, Coronation Balanced Plus Fund, Investec Opportunity Fund Class A; and of late we are also allocating you to Foord and Prudential Balanced Funds. We regularly undertake due diligence studies on these funds to ensure they are still credible. By the way, Allan Gray reclaimed its top spot of nearly 20 years as the best unit trust fund manager again after losing it temporarily to companies like Nedgroup Investments and Coronation Fund Managers. This means Allan Gray consistently outperforms its peers by getting better returns at low risk.
