So that was April…
I was pleasantly surprised when I saw April’s one-year performance of the all-share index – it was 54%. This was off the low base of last March’s market crash but is still good news and underscores the importance of staying invested in the market during downturns.
South African Market
Over the past six months, South African value shares returned 27% while growth stocks returned 21%. The rand also strengthened by 13% over this period.
Before we get carried away, remember that there are weaknesses in the SA economy. The problems of Eskom will limit growth as well the lack of fixed capital investment. Price earnings ratios are high and some commentators are warning about a potential bear market. Care needs to be taken when constructing investment portfolios to ensure that your investments can withstand all market conditions.
I am concerned about the potential impact of a third wave of Covid. I walk my dogs every morning and I've noticed, over the past month that fewer and fewer people are wearing masks. If I contrast this to the situation in January when we were living through the 2nd wave, most people were wearing masks. This blasé attitude combined with the very slow rollout of vaccines could spell trouble for us this winter.
What do the experts say?
I attend several economic and financial presentations each month. My take on what most of the experts are saying is:
Cash is not expected to provide decent returns so start looking for other homes for your fixed deposits
The SA share and bond market should provide decent returns
Offshore investments should do well.
Financial Planning
I came across a simple test which highlights any gaps in your financial planning.
Fill in how much money (lump sum or income) you or your family will receive from the following sources should any of these events happen to you:
I found this to be quite a reality check.
Estate Planning
Estate and Wills expert, Melanie Louw and I will be presenting a course on Wills and Estate Planning from 1 – 4 June. Lectures will take place over Zoom from 3 – 5 each afternoon.
For more information click on the link below:
Until next month, please take care.
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