So that was 2020!!!

What a year it has been. At the start of the year, experts were predicting a bumper year for the stock market. The Corona virus had other ideas. The stock markets collapsed as the world went into lockdown. Now that the dust has settled let's take stock and get some perspective on what the investment world looks like.

JSE

We are marginally up this year, despite the massive fall when lockdown hit us.

If we look at how the various sectors have performed so far this year and compare it with the past 10 year’s performance we have:

The markets have bounced back nicely over the past 6 months and we are ahead of where we were a year ago.

Rand /Dollar

We started the year with a recommendation to use hard currency to invest offshore as the Rand was R14.10 to the dollar. Following lots of ups and downs, we are pretty much where it started.

Offshore investments have done particularly well and with the current exchange rates, this is a good time for investors to diversify their investments offshore.

Repo Rate vs Inflation 2009 - 2020

As you can see, short term interest rates have declined sharply this year and are unlikely to improve for a while. If you are living off interest income, you may want to relook at these investments.

Looking forward to 2021, financial experts predict that the local and offshore equity markets will do well. In fact, the right funds are expected to produce double-digit returns.

The key is to find those sectors and funds.

This may help….in an earlier newsletter, I spoke about the different shaped recovery graphs. The K shaped graph makes a lot of sense and could point the way towards where future growth will come from.

Companies that are geared towards the post-Covid world should do better than those based on the old way of doing things.

I have been writing weekly articles for the Daily Maverick 168. I have each article on my website so please log onto financialwellnesscoach.co.za

Here is a list of what I have written so far:

1. What you should look out for if you get retrenched

2. Why you should invest offshore and how to do it cleverly

3. How to live off interest income if interest rates decline

4. How to save for your retirement even if you have left it too late

5. What to do if you start using up the capital of your living annuity

6. Why you actually need a funeral policy (and it is not just for a fancy funeral)

7. How to invest offshore

8. How to deal with the financial aspects of divorce

9. How to become wealthy

10. How to choose a medical aid

11. What you must look out for if you are investing in property

And finally, I have a gift for you.

Below, I have attached a copy of the Life File that I spoke about last month. This consolidates all your records and documents where everything is. Trust me, having recently dealt with a family death, I can really appreciate how useful this is. Please feel free to share it with your friends and family.