Investing: Look before you leap offshore

Uncertainty has become a new global norm and investing during these volatile times often leads to emotional and polarised decision-making. 

This has been evident in the movement from market-related asset classes to cash or near cash investments. Specific events such as rolling blackouts, investment downgrades or riots have also lead to people rushing to externalise their funds offshore. 

The choice between rand-based and hard currency offshore investments using the various offshore investment allowances, is guided by several factors including: 

• Reducing your emerging market risk in SA;
• Leveraging the plethora of investment opportunities in the global stock markets; 
• Hedging against a weakening rand currency; and 
• Moving to another country in the future.

Legacy and estate planning with these factors in mind is fundamental to making your decision between rand-based or hard currency offshore investing.  This is particularly important for hard currency investment, given that countries have their succession laws, tax and tax residency, situs tax and probate.

Probate relates to the administration of a deceased person’s will or estate, and the key to this process is the existence, validation and authenticity of the will. Like situs and succession planning, probate is jurisdiction-dependent.

Mutual financial services company PPS continues to guide members with its well-constructed goal-based approach to investing, including the necessary diversification and risk management of local and global investment opportunities. Your financial planner or wealth manager has an immediate and long-term role to play. 

The overall objective is to assist you to navigate uncertainty and volatility, staying on course towards your goal-based outcomes, and removing possible polarisation to keep you and your family anchored in your planned outcomes.

Diversifying your portfolio and risk, by including externalised offshore in your investments, requires understanding cross-border or jurisdictional laws that may affect you and your legacy in the future. 

Click here to register for the PPS Wealth Advisory offshore forum and find out how offshore can be included in your holistic financial plan.

^{This article does not constitute financial advice and is provided purely for information purposes. In terms of the Financial Advisory and Intermediary Services Act. The information, opinions and any communication from PPS, whether written, oral or implied are expressed in good faith and not intended as investment advice, neither do they constitute an offer or solicitation in any manner. PPS is a licensed life insurer, controlling company and an authorised FSP.}