It's very hard to make sense of markets right now.
On the one hand, it's crystal clear the economy is in a mess. Unemployment is even higher than the worst of the Global Financial Crisis of 2008. The damage done by lockdowns cannot be easily undone.
On the other hand, governments have pumped unprecedented amounts of money into the system and the market seems to be on an unstoppable rise. J... ››› more
Over the past few weeks, many clients have contacted me to discuss their prospects in the face of looming retrenchment and salary cuts. Some are facing early retirement; others have been forced into unpaid leave which means their savings are starting to suffer. All of them are afraid of what this means for the future.
There is no question, the economic impact of the Covid-19 pandemic and the r... ››› more
You may have heard of the Butterfly Effect.
Chaos theory predicts it is possible for the flap of a butterfly's wing in China to cause a hurricane in the US. Though this sounds like fantasy, we may actually be witnessing one of the greatest “butterfly effects” in history.
A little while ago, likely in 2019, a single virus particle made a jump from bats to humans. In terms of scale, this... ››› more
Warren Buffett has a famous quote: “Be fearful when others are greedy and greedy when others are fearful.” As with many great quotes, there's a great deal of wisdom packed into those few words.
And today, I've found the opportunity that perfectly puts Buffett's quote into practice.
Here are its features:
1- Your capital is tied up for a maximum of just three years
2- You stan... ››› more
Unless you live under a rock, you'll know global markets have fallen dramatically over the last few days. Many major indices are now in bear market territory, having fallen more than 20% from highs. Some sectors, like energy, have fallen even further.
It's total carnage out there!
But, if you're a regular reader, you can't say we didn't warn you about this…
Firstly, as many of my reade... ››› more
Many analysts have predicted 2020 will be a choppy year for investors, but NO ONE could have anticipated a threat like the Coronavirus. And, although many of you have likely heard of the disease, I believe most people are yet to understand its implications.
According to most estimates, this appears to be a very infectious sickness (twice as high as a normal flu) with a moderate death rate (l... ››› more
2020 is set to be a nervous year for South African investors.
At home we have this triple whammy to look forward to… load shedding, a potential ratings downgrade and low growth.
Internationally we got Brexit, the US election and the ongoing trade war. And maybe even an actual war!
All this when many global indices are at record high and way overdue a reset.
In such an environment... ››› more
Most people have notoriously bad memories.
Less than a month ago, the entire country was going through one of the most serious bouts of load shedding we have ever had.
Remember stage 6!!!
Yet after just a few weeks of consistent power supply, many have forgotten what it felt like and that it can return any day now!
Let's recap what happened in December.
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While it may have been just another ordinary Thursday afternoon to you and me, for eight South Africans sitting around a table in a small boardroom in Pretoria, things looked very different.
These eight people held the fate of the country in their hands.
Call things right, and they may just put SA's ailing economy back on track. Call things wrong, and they could decimate the rand, stifle g... ››› more
Last Friday, ratings agency Moodys dropped their outlook for SA debt from stable to negative. This means within the next 6 to 24 months it's likely we'll see the last of the three major ratings agencies cut our government debt rating to junk.
As an economist, I am now all but certain the downgrade will happen. SA will become a junk status borrower.
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Imagine how much more successful you'd be if you had five chances to kick a penalty…
Five chances to sink a putt…
Five chances to nail that perfect landing…
Well that is exactly what my October Structured Product pick offers you: Five chances to make mega-profit.
And, best of all, you can customise this investment to suit your specific needs by choosing to invest in either Ra... ››› more
Meet Joe - a 60 year old man with pension savings of R3 million.
Like most pensioners, Joe's greatest fear is he'll run out of money before he dies.
After all, most retirement products only plan to look after you for 20 years.
Since South African men and women have a 50% chance of living beyond 83 and 87 respectively (the age most retirement plans work on for each gender), running out of... ››› more
Last week the Repo rate jumped more than 400%.
Now, I'm not talking about the South African rate which is set by the South African Reserve Bank.
I'm talking about the “real Repo rate”. The US one, which affects over trillions of dollars' worth of transfers each day.
This rate, which is normally just over 2% spiked up to 10% last Tuesday (17 of September) as global lending markets s... ››› more
The World Economic Forum (WEF) on Africa 2019 is currently taking place in Cape Town. During this three-day event, our most senior politicians will be out in full force to convince the international community South Africa remains investable.
They'll discuss lofty matters such as the 4th Industrial Revolution (4IR), sustainability, digitalisation and stability. And, if history is any indication... ››› more
I never thought I'd say this…
While President Cyril Ramaphosa may be less corrupt than Zuma, his economic theories are almost as bad.
I am too.
Like the rest of the market, I celebrated when Ramaphosa replaced Zuma. Aided by heroes of the anti-Zuma movement like Pravin Gordon, I truly hoped we'd see a “New Dawn” for South Africa and a turnaround for our economy.
... ››› more
The rand has collapsed over the last two weeks. It moved from below R13,90/$ to worse than R15,30/$. That's more than 10% weaker in a fortnight. Obviously, many of you are worried you've lost your chance to get money out of SA at a reasonable exchange rate.
The question on everyone's mind: Should you get out now or wait for a better level?
The only way to answer this question is to look f... ››› more
By now, I assume, most investors would agree, having all your money invested in SA is a bad idea.
Our low growth, unstable politics and a volatile currency are important considerations. However, the most important reason to invest offshore, is the local investment universe is simply too small. At less than 0.6% of global GDP, South Africa is simply too small to provide you with enough opportun... ››› more
The rand has only just broken back below the key R14/$ level and I can tell from the client flows going through our treasury desk, many South Africans are once again keen to get money out of the country.
The USD/ZAR exchange rate was well over R15/$ just a few weeks ago.
This means, the rand has firmed up around +7.75% in the last month-and-a-half. Put another way, that's about a year's wo... ››› more
If you're approaching retirement, it's likely this question is keeping you up at night.
It doesn't really matter if you're wealthy, comfortable or just making ends meet. When you get to retirement age the world changes.
In the course of my life I've worked with high-flying executives living what can only be described as “the dream”. Owners of multiple businesses, in multiple countries.... ››› more
Almost everyone dreams of retirement as a time of peace and relaxation but, in reality, the retirement process is probably the riskiest financial event in your life.
There are two main reasons for this.
Firstly, the decisions you make today will decide the quality of the rest of your life.
Secondly, it is virtually impossible to recover if you make a mistake. By definition this is as r... ››› more
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