Safest bet in times of uncertainty lies in long-term investments
Making short-term decisions is difficult in unpredictable SA and global political environment
It’s been a tough time for South African investors, with the country having slipped into recession and political and economic uncertainty turning market sentiment. This may make investing uncomfortable, as fear of an uncertain future elevates concerns about risk. Falling share and bond prices hit investors right in the stomach, particularly when (and this is normally the case) these prices are accompanied by uncertain outlooks and terrifying newspaper headlines. Over several periods in the past (for example in 2003, 2009, 2011 and 2015), investors have felt this pain. Current conditions are no different and make short-term investment decisions difficult. The political environment (not only in SA but also abroad) is unpredictable and can result in binary outcomes. Recent events have shown that even if you correctly predict an outcome (for example, Donald Trump winning the US election), you may not necessarily get the market impact right (in this case, the US stock market rallying). I...
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