AUTUMN NEWSLETTER 2022
What a rocking, rolling ride we have had since the beginning of the year, both locally and globally!
From the tail-end of the Omicron virus to the conflicts in Eastern Europe, the Middle East, and the Far East, it is somewhat overwhelming. But through all of this has been a thin, positive thread in SA due to the fortuitous and timely demand for our resources which boosted the country’s revenue, bolstered our taxes, and slowed the deterioration in the GDP.
Due to a myriad of socio-political and economic circumstances prevailing around the world, world inflation has reared its ugly head to highs not experienced in more than a decade, leading to a dramatic rise in interest rates as well.
The loud and clear message to investors is that volatility and returns on investment (ROI) will be subjected to large swings and, if nothing else, this will test the mettle and patience of each and every one of us as we feel and adapt to the changes in the economic environment. There has never been a more apt time to return to basic planning principles and ensure that the investment portfolios are in the right place for the right reasons. We have used our time (care of Eskom loadshedding) wisely and increased our research to find and navigate a suitable pathway going forward.
Warren Buffett’s wise words of more than a decade ago emphasised that providing the original investment plan was implemented correctly, one should not radically interfere with that plan as that would change the ultimate outcome. Currently we live in an extremely “noisy” financial environment with many red herrings, soothsayers, naysayers, and sadly, charlatans who all claim to know what’s best for you, the investor. WB had an apt saying that one should “Look through” all this noisy short-term racket and focus on the medium to long-term.
By adapting these basic principles, we proactively manage our portfolios to optimise them in the changing circumstances without departing too far from the core decisions made at inception.
All that said, many opportunities have become available to diversify and grow portfolios in more efficient and cost-effective ways, all of which have enabled us to keep the cost increases lower than one would expect in this inflationary environment.
It makes good sense to review your portfolio regularly and plug into your current personal situation and confirm that your decisions are still relevant and applicable.
We have become more about managing your finances by paying more attention to our clients’ affordability. The good news is that there has been a groundswell in the industry, and in particular by the Financial Services Providers, who have initiated methods to give discounts on administrative costs, volume discounts, and to some degree a standstill in general cost increases. This coupled with the introduction of the nil costed new style unit trusts and ETF’s, which will be gradually introduced to your portfolios, will also help to keep costs under control.
“Honi soit qui mal y pense.” In other words, you are and can become what you think by not focusing on the bad and the downside, but rather looking for the good and being optimistic. You can achieve your dreams, but you must take the first step on your journey to create wealth and peace of mind. The world will go on, with or without you, so make a plan to start now.
PLEASE, I URGE YOU TO THINK LOGICALLY AND NOT EMOTIONALLY GOING FORWARD. IT IS IMPORTANT TO REMAIN COMMITTED AND “KEEP ON KEEPING ON.” WE WILL HELP YOU TO THE BEST OF OUR ABILITY.
DENIS PULÉ (Dip.Fin.Man.)
Safinco Wealth