There is a narrative among some investors that holding local assets has been a disaster for SA investors, even over multidecade periods, and that now is the time to save whatever crumbs are left and move everything into the safety of hard-currency assets.
How can this have happened? Investment theory suggests higher-risk emerging markets should deliver a risk premium over their developed peers in the longer term, albeit with a bumpier ride. But SA has failed to reach its growth potential, they say. While Asian markets roared ahead after the late 1990s crisis, SA struggled, bar a few brief years in the mid-noughties when a commodity and credit bubble delivered a decent 5% real return only to find that it had all been borrowed from the future...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.