Well, that was not quite the start to the year that we had all hoped for.
From the madness of yet another cabinet reshuffle and corresponding economic rating downgrades in our own country, the recent news of a recession, to the craziness of US and UK politics, to the very home felt anguish of the fires in Knysna and our own drought and now storm warnings – it does feel like worldwide we live in crazy times!
Despite all this
The investment markets (local and worldwide) have looked relatively pedestrian, and our local Rand relatively stable if not strong. Much of the market moves (or lack thereof) can be attributed to the quantitative easing instituted by many of the first world nations post the 2008 financial crisis and the large amounts of cheap money invested therein. This has protected many of the markets from large shocks. As Emerging markets have again found favour in the investment world the South African Rand has strengthened despite some of the own goals our government seem behest on scoring.
From your (and our) perspective
So much of the news and noise above can cause us to panic or become concerned and make investment decisions that in the long term are suboptimal. As humans we are prone to run to places that have recently done well (at this time ironically cash and money market type investments) and move away from some of the fundamentals of finance like strategic diversification of assets (both local and offshore), inclusion of growth assets in our portfolio and the fundamental analysis of underlying portfolio managers. This we feel is some of our job – helping you stay the course through the noise and ensure that you are continually invested for the longer term.
To this end
As a business, for just over a year we have begun to utilise the services of a discretionary fund manager to help us create model portfolios that are designed to achieve desired outcomes for our clients. So let’s answer some basic questions:
Why have you decided to create model portfolios?
As a business, we found that although we have the adequate skills to create niche Unit Trust portfolios for clients we were not always able to take the best advantage of Strategic Asset allocations for clients as markets changed.
More to follow.