Hello clients and friends of GDA,
Every time I sit down to write this letter (which has been redrafted several times) a new set of information, news flow or scary financial numbers bombard me. On Monday night we all huddled around the Television to watch our president deliver a speech that will be recorded in the annals of history – The day our nation went into lockdown. I am so grateful that it is Mr Ramaphosa leading this moment in history – one can only imagine under the previous dispensation!
Safe to say we are living in unprecedented days. Not since World War 2 has there been such a worldwide restriction on the movement of people, trade, and unfortunately with it the flow of business. As an all-out extrovert the idea of social distancing (and now 21 day confinement) is wildly foreign to me. Whilst the basis for the decision’s by worldwide leaders is understood and our efforts as humanity to slow down the spread of the now infamous COVID 19 virus are courageous, the second-round effects of these decisions are coming to bear – quickly. Tourists are no longer travelling, sportsman are no longer sporting, and even my favourite coffee shop (takeaway) was closed this morning! It feels like the world is on pause but alas – there are always bills to pay.
Stock markets around the world have been in panic mode as they try to digest and work out what the long-term impact of all this news flow is. As if one black swan, namely the COVID-19 virus was not enough, a second black swan arrived that being the incredibly low Crude Oil price caused by a fight between Saudi Arabia and Russia. This has not been particularly kind to the Sasol share price.
This leads to the crux of the stock market issue; while most companies are able to sustain a drop in income over the short to midterm (and analysts can mathematically work out the potential change in income stream), some companies have debt on their balance sheet (because for so long it has been so cheap!). At some point companies may breach debt covenants or at worst are not able to pay their debt back. Central Banks world-wide have again thrown the kitchen sink at reducing the cost of money and creating liquidity in the market (our own Reserve Bank cutting interest rates by 1%) to support markets and companies. As this news ebbs and flows, people are taking very different views on the data.
As history would show, markets, and the people behind them often operate out of a place of fear or that of greed. Right now, it is easy to see which is at play. Operating out of fear can have a devastating long-term impact on one’s personal wellbeing (soul and body) and similarly their long- term wealth strategy. SO in a time of panic what should we and our clients be doing to get through this.
So here are some things we think you (and we) can do:
Take Action:
This is not the time to panic but it is a wise time to take stock of where you are at, what your income may look like over the next few months and to consider the impact of this extended period of slow down. This will be very different for each of our investors. Despite being housebound each one of us at GDA is available to talk via phone, Skype or email over this time.
Go through your Budget:
Consider putting on hold some of your additional expenses like gym memberships or subscriptions. While budgeting consider that many of your day to day costs will reduce as your movement is restricted.
Insurance/ Medical Aid and Life Cover:
Please make sure these payments are up to date and policies are active. Although sometimes a grudge purchase the cost of not having insurance can be detrimental.
Large Capital purchases:
We would not recommend making large capital commitments at this time. We think it wiser to wait till some level of certainty returns.
Large Withdrawals from investments:
Despite the negative news and all we see, markets will recover, the world will come back to a new normal and with it the value of underlying companies. Our clients’ portfolios are well diversified over fund managers, asset classes and jurisdictions. Should clients withdraw at these uncertain times they will be locking in losses.
Be Kind to others:
There are several smaller businesses and people who will be taking particular strain at this time. See if there are practical ways you can pre-buy from them, support them
emotionally or purchase vouchers from them.
Take time to restore:
Enjoy this time with your family, read those books you threatened to read, fix those jobs your better half has listed for you, take time to be still and pray.
As a team we remain committed to looking after our clients over these trying times. Should you need to talk we suggest sending an email to gda@gda.co.za where we can set up a time to call you.
Our office will be closed from Thursday 1pm, 26th March but all of us are working remotely. Our office line will be redirected to Lesley but we recommend sending an email.
For those clients that utilise Investec CCM and Nedbank Corporate accounts with us please note:
– We will be processing payments Tuesday and Thursdays during this time;
– Instructions must be received before 11am on day of payment;
– ALL instructions must be sent to gda@gda.co.za.
– Unfortunately we will not be able to pay new beneficiaries.
We are thinking of you ALL at this time.
Kindest regards ,
Jonathan, David and the GDA team
Feel free to contact us if you have any queries at all.
And the people stayed home. And read books, and listened, and rested, and exercised,
and made art, and played games, and learned new ways of being, and were still. And
listened more deeply. Some meditated, some prayed, some danced. Some met their
shadows. And the people began to think differently. And the people healed. And, in the
absence of people living in ignorant, dangerous, mindless, and heartless ways, the earth
began to heal. And when the danger passed, and the people joined together again, they
grieved their losses, and made new choices, and dreamed new images, and created
new ways to live and heal the earth fully, as they had been healed. ~Kitty O’Meara