LETTER: Severe headwinds should be a wake-up call for investors
Diversified global portfolios can offset the fluctuating rand and the challenging political and economic environment
Doing nothing is not an option for people who are serious about creating, growing and safeguarding wealth. A tougher global market and legacy issues from the previous government, the increasing pressure of constant fuel hikes and an incredibly volatile rand drove SA into a technical recession in the second quarter of the year.
These severe headwinds should be a wake-up call for investors. They should ensure that their portfolios are diversified across asset classes, sectors and geographical regions. During periods of volatility and upheaval, diversification is the best weapon to mitigate risks and take advantage of opportunities that present themselves.
The slew of economic data on SA recently is one of the reasons why investors should be casting their eyes internationally, as suggested in "Investment companies aim offshore" (October 31). As fuel prices escalate and eat away at disposable household income, trying to stimulate growth will remain a challenge in the near future.
A struggling economy, with consumers under pressure and a high unemployment rate, leaves very little space for political stability.
SA investors should be looking at international options because of the fluctuating rand and the challenging political and economic environment. Decisions should be based primarily on what’s happening in SA.
Corruption — perceived or real — is a major deterrent for investors. The mismanagement of VBS Mutual Bank and the failure of corporate giants such as Steinhoff have investors questioning regulatory checks and balances and whether their money would be secure in SA.