Many South Africans are unfortunately ill-prepared for retirement, and it’s an unsettling prospect that so many citizens of this developing nation may not be able to support themselves in their golden years.

However, the beauty of compound interest means that if you start saving from an early age, investing in your future doesn’t have to be the heavy financial burden that many people fear (and thus postpone). The power of compound interest actually makes saving from an early age much cheaper and less stressful than if you were to put off saving until you’re older.

Albert Einstein referred to compound interest as “the greatest mathematical discovery of all time”, and he declared it to be “the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it”.

In a recent article published by CNBC Africa, the power of compound interest is explained with the following example.

“Based on a growth rate of 10% per annum, if one saves R1,000 a month, the capital amount after 20 years would be R759,300. If one saves R1,000 per month for 40 years, the value would be R6.3 million… The total contributions for the client who saved for 20 years was R240,000 and the contributions of the client who saved for 40 years was R480,000, yet the difference in their values at retirement was a massive R5.5 million.”

This is because compound interest is the interest calculated on the initial principal, compounded with accumulated interest. It is essentially the result of reinvesting interest so that interest is then earned on the principal sum and previously-accumulated interest combined. To put it simply, it can be thought of as ‘interest on interest on interest,’ and it will make a sum grow at a faster rate than simple interest, which is is calculated only on the principal amount.

The company that you work for may make monthly contributions to your retirement either in addition to your wage or through salary sacrifice. According to the article, if “you begin with your company retirement fund at age 25, then 19% of your salary should be sufficient should you continue with this for the next 40 years and not cash-in your funds on resignation or retrenchment, but rather preserve them. Should you start working later, then you would need to invest a higher percentage of your salary to compensate for your lack of compound growth in previous years.”

Time is of the essence when it comes to taking advantage of the effects of compound interest to build a healthy savings pot that will provide for you in your autumn years, as well as potentially allow you to support your children with their financial goals. The bottom line is that the longer you wait to start saving, the more money you will need to save to achieve the same financial goal. And this is particularly the case when it comes to retirement savings, as this could benefit from a 40-year saving term.

The power of compound interest lies not in saving vast amounts, but instead when you start saving. Don’t underestimate its power, and don’t hesitate to arrange a meeting to find out how much you need to save per month to reach your retirement goals. Calculations will be based specifically on your current age, desired retirement age, and future requirements, so don’t delay in making compound interest work for you.

Please note that all figures in this post are average examples and don’t represent an actual financial plan. Each plan is unique and needs to be tailored inside of a host of influencing factors.

It may not be a nice topic that we wish to think about or discuss very often, particularly as it can be a sensitive subject if you know someone who has suffered from breast cancer or a scare. However, the disease’s prolific nature is exactly why we need to talk about it — and why a whole month is dedicated to increasing awareness about this malicious malady that so many women are bravely fighting on a daily basis.

As many as one in eight women experience breast cancer in the United States — every two minutes a woman is diagnosed and it is the second leading cause of death among women. According to the World Health Organisation, breast cancer is the most common cancer among women worldwide, and it affects those in countries at all levels of modernisation.

Although it cannot be prevented yet, it can be detected early in order to give women the best chance to lead a full life. October is Breast Cancer Awareness Month and, as part of this annual campaign, here are just a few of the ways you can help to give the women around you the life-saving information and compassionate support that they need.

1. Host a fundraiser
2. Share educational content on social media to spread awareness
3. Download the free breast health guide by the National Breast Cancer Foundation — What Every Woman Needs To Know
4. Make a once-off or regular donation to the National Breast Cancer Foundation or to a local cancer organisation. By donating to the National Breast Cancer Foundation, you will be helping to distribute copies of the aforementioned eBook to women, so as to give them the opportunity to be proactive about their health. Your donation(s) will also contribute towards helping women who have been diagnosed with breast cancer to overcome the fears and misinformation surrounding the disease through the foundation’s Beyond The Shock and Patient Navigator Program initiatives, and it will make sure that every woman who needs a mammogram receives one through the National Mammography Program.

Early detection, education and support are three key ways that we can curtail the effects of this pernicious affliction. Fortunately, death rates from breast cancer have been declining since the end of the 20th century, which is partly thanks to better screening and early detection, continually improving options for treatment, and increased awareness.

If you are a woman reading this, be aware of the need for regular check-ups and ensure you have appropriate medical cover in the event of any such misfortunes. And if you are a man reading this, with women in your life whom you care about, encourage them to do the same. Also don’t be too complacent yourself because everyone is born with some breast cells and tissue that have the possibility to develop into cancer. Breast cancer in men is usually detected as a hard lump underneath the nipple and areola, and although diagnosis is rare, there is a higher mortality rate for men than women because awareness among men is less, which results in greater delays in seeking treatment.

In South Africa, it is important to be correctly insured to ensure that you have access to the services of detection and treatment that you deserve. Take the time this month to read carefully through any current health insurance policy that you may have, to update it if need be, and to organise one if you have been meaning to. Don’t hesitate to arrange a meeting if you would like to make this a financial priority and discuss any elements of your financial health at the same time.

You may be familiar with the 10% savings rule.The idea is that, as soon as you are financially independent, you should save approximately 10% of your income for retirement, and it is a general guideline that gives you a starting point for your savings early on in life. If you consistently save 10% of everything you make from your early 20s, you should be all set for a happy and healthy retirement.

However, you may need to go the extra stretch if you only start giving serious thought to your retirement later in life. Everyone’s financial situation is different and has its own considerations, depending on age, income, family obligations, and lifestyle choices. The 10% savings rule may not apply to everyone, but saving 10% of your salary, or any amount regularly, is certainly better than nothing.

If you’re unable to save 10% of your income, don’t be discouraged — the important thing is to set a savings goal that you can achieve. You can always increase this amount when you are in a position to do so. Alternatively, if you have a luxury lifestyle and have always been used to earning a healthy wage to support it, then you may want to consider saving much more than 10% of your income to maintain your way of life.

However, there are also different options, such as downsizing or changing some of your spending habits after retirement instead. These are all aspects that can be discussed in a meeting, so that you can weigh up your priorities and make decisions for your future accordingly.

In many cases, it can take around 90% of your energy and income to make ends meet, and the last 10% is where you can build your wealth. Think of it like doing exercise — the first 90% is just the warm-up and the last 10% is where the real workout happens for you to make progress.

Some people argue that this 10% is not just about savings, but it’s also a question of how you apply your energy. If you want to go the extra mile in achieving financial success, you may want to use your last 10% of energy each day to improve your financial intelligence and control expenses. Basically, accumulating wealth requires putting in that extra 10% of hard work that takes us past just being comfortable. You may not want to spend your evening after a day at the office reading investment strategy articles or fixing the leaky faucet to keep expenses down, but these are the type of small contributions that will accumulate towards your future financial freedom.

The principle is that wealth is built at the margin, and most people can only dedicate 10% of their hours towards their financial freedom. But by reviewing how much of your effort is spent maintaining current lifestyle needs versus achieving your future financial goals, you can look to refocus your energy where possible. The higher the percentage of time that you can dedicate towards your financial freedom, the bigger the impact on your future. A series of incremental changes can multiply your gain, thereby creating financial success at the margin.

If you want to discuss how you can best make small changes and save for your future, do not hesitate to arrange a meeting for some personal training to help you get on track. Think of it like starting a work-out regime — you just need an appropriate fitness programme to guide you towards good financial health.

Watches can now double as fitness trackers… and if you ask anyone who has one – they are considerably more aware of their activity. Sure – they may not actually exercise more, but with an easier way to monitor how active they are, they are more likely to change any behaviours that they are unhappy with. Building on this principle comes a brand new wearable…

A hip new bracelet by Sanlam called the MNA NAM bracelet has been marketed as a fashion accessory that helps the wearer to remain conscious about their spending habits. There is a QR code embedded in the bracelet design that allows you to scan and save, instead of scan and spend, as is often our forte in today’s technologically advanced culture of consumerism.

The bracelet is linked to a WeChat wallet, powered by Standard Bank, and you can transfer any amount of money from your bank account to this wallet, which helps you to save for short-term goals with the ease of simply scanning your wrist. Saving has never looked this good, and the more you wear the bracelet, the more valuable it becomes. It is also linked to a competition where you stand the chance to win a custom-style piece by Ngxokolo by scanning and saving.

A recent trial of the bracelet was recently analysed on Maya on Money and makes an interesting comparison about the bracelet with a FitBit. Just like a FitBit tracks your daily steps and heightens your awareness to take a few extra steps and exercise a bit more, this new bracelet could act as a constant reminder of your savings goals.

The bracelet doubles up on the goods — not only is it a stylish accessory that has been designed by South African fashion designer, Laduma Ngxokolo, but it also acts as a reminder to not make any impulsive purchases and to become more mindful about spending on non-essential items.

Its psychological power ultimately still lies with the owner of the bracelet but, according to the article, “it is a clever concept to use designer fashion to stop impulsive fashion spending”, and raises the question of whether tech wearables could change our money habits.

Maybe tech wearables provide just the incentive and reminder that people need to contribute to helping them achieve financial goals and advance in their understanding of their financial health. Could fashion help the future of finance?

It’s important when buying an investment property to do your homework so that your property becomes an asset rather than a liability. While astute investors can make good money, there are significant holding costs and initial fees, and a property is not as liquid as other investments.

An interesting article in City Press reviews the considerations that savvy investors should take into account.

It is important to be aware that even in high growth areas like the Western Cape, property does not always outperform shares and, over the past decade, residential property has actually underperformed the JSE. Contrary to what some people believe, buying an investment property is not necessarily less risky than investing in the stock market.

If you had invested 10 years ago, an investment linked to the average return of the JSE, with dividends re-invested, would likely be worth more than an investment property and the holding costs would have been significantly lower. However, people are still keen to invest in property as there is there is the ability to leverage a property, and a steady rental income can significantly boost your overall return.

The good news for property investors is that there are signs of improvement in rental yields in South Africa. According to FNB property economist John Loos, relative rental yields will start to rise as property prices start to weaken this year, which means that now could be a good time to consider buying an investment property. Loos expects average gross yields to gradually increase to 9.3% during 2017. However, it’s important to be realistic about annual rental increases as, according to the Tenant Profile Networks (TPN), escalations are only currently at around 5% per annum, but running expenses – such as levies and rates – may be increasing at a faster rate.

If you are considering buying an investment property, some experts have some important advice. Tommy Nel, Head of Credit at FNB Home Loans, warns against trying to time the market. Don’t get carried away with get-rich-quick tips and big talk, and don’t just view property as a simple way to make a fast buck. He believes that if you have at least a five-year time horizon and don’t buy in a property bubble or in a degenerating area, then property can deliver a reasonable return. However, it does also require achieving good occupancy levels.

Andrew Van der Hoven, Head of Home Loans at Standard Bank, emphasises that it is important to fully understand your financial position before making any decisions, as there are costs involved — such as insurance, garden services, renovations, and rates and taxes — that easily add up. He advises that you should have at least three to six months’ worth of payments in reserve to cover any costs if a tenant defaults on rent or if you can’t find occupancy. Before you make any purchases you should do your research about the property and be sure to have the house examined for any defects, such as electrical, structural or plumbing issues.

You should also do significant research on the area and take the time to find out the average property value and the rental demand in the neighbourhood. If it is close to schools, universities or offices, then you may be able to find tenants easier. It is also important to do your research on tenants, and review the TPN Credit Bureau, which has a database that provides information on tenants’ payment behaviour and whether they can afford the rental.
Before you buy a property, be sure to do all the calculations to work out whether the rental you will receive, minus the costs and maintenance, will make it a viable investment or not. For a property to be a good investment, it is important that your rental yield is sufficient to cover your costs, and to take into consideration that there is the risk of mortgage interest rates increasing.

If you want to buy an investment property, you may need to be prepared to put down quite a big deposit and be able to fund any monthly mortgage installments from your salary, as banks cannot consider any potential income streams from the property that do not already exist. Ewald Kellerman, Chief Risk Officer at Absa Retail, emphasises that it is also important to keep in mind that the income you receive from a rental property is taxable. “Interest on a bond and some maintenance costs are often allowed to be deducted as an expense, which can reduce the taxable amount considerably. Certain capital gains exemptions also only apply to your primary residential property, but not to an investment property. Make sure that you take this into account when calculating total return, and consult a tax practitioner to understand the full tax implications.”

If you have both a residential home and an investment property, you would, therefore, want the bulk of the mortgage to be on the investment property, in order to benefit from tax deductions.

Buying an investment property can prove a very fruitful exercise if you have critically analysed certain factors and considerations. However, it is not always a successful short-term proposition, depending on your financial circumstances. There are risks and running costs involved, and it is important to not rush into any decisions blindly.

Do not hesitate to arrange a meeting if you are considering investing in a property, so that you can be sure you understand the costs, potential returns and how they fit in with your current financial situation.

National Wills Week is from 11th to 15th September 2017 and is a time when participating attorneys in South Africa will draft new, basic wills free of charge. To make the most of this time of year, simply make an appointment with a participating attorney before or during National Wills Week.

However, if your circumstances are not simple enough to take advantage of a free basic will, it’s still worth making the effort at this time of year to draw up a will that suits your circumstances. You never know what the future holds, so it’s best to face this reality sooner rather than later.

HOW A WILL CAN BENEFIT YOUR LEGACY
In a recent article published on Wills Worldwide by Cindy Leicester, the author highlights the importance of having a will to ensure that your assets are disposed of after your death in accordance with your wishes. This is called ‘freedom of testation’. If you pass without leaving a valid will, your assets will be distributed according to the provisions of the Intestate Succession Act, which are generally fair and ensure that your possessions are transferred to your spouse and children.

However, you should be aware that your assets may not be left to the person of your choice, there can be unnecessary costs involved, and it can take a long time for an executor to be appointed. If there are no clear instructions on how to distribute your assets, this can result in additional unhappiness or even conflict among your family members, at an already difficult time.

DIY OR USE A PRO?
Drafting a will on your own or by using a web-sourced template can sometimes be sufficient, but these will not be applicable if you are residing outside of your country or origin, if you have young children, if you have assets in different countries, if you are part of a blended family, or if you are likely to inherit money yourself. These are just a few of the factors that would not be covered by a DIY basic will.

Attorneys are qualified law professionals who can establish your needs and offer professional advice on any problems that may arise, before forming your estate plan and drafting your will. They should have the necessary legal knowledge and experience to ensure that your will not only complies with your wishes, but is also valid and meets the requirements of the law.

If you are unsure whether an attorney is in good standing, it’s worth contacting the relevant law society or asking for advice. Once you have chosen an attorney with which you feel secure, you can arrange a one-to-one meeting in which you will be required to bring your passport or identity document to prevent fraud.

If you wish to arrange a meeting to discuss tax and insurance before you sign your will, do not hesitate to get in touch. A bit of foresight, preparation and research is key to ensuring that all your affairs will be dealt with in the best way possible for your loved ones after you’re gone.

The temperature is starting to climb and it’s almost safe to leave your scarf at home. Spring is in the air and, as flowers bloom and citizens emerge from hibernation, it’s the perfect time to start afresh with some spring cleaning. Once you’re done dusting the shelves, take a look at your finances and see where they could do with a polish too.

This summary of a five-step guide that was published on Clark will help you to clean your financial cobwebs to start the spring season with vigour.

1. Evaluate your financial situation
First things first — you can’t make any changes until you know what you’re dealing with. Start with the big picture by looking at your assets and liabilities, then work your way down to the nitty gritty by reviewing your monthly expenses and budget. Do you manage to keep to your budget every month or is it unrealistic? Your budget should be life-centered – allowing space and provision for the priorities that you have set.

Ask these kinds of questions for all your money matters to work out if your financial processes are working for you or not. A healthy financial situation is simply one that fits your needs and goals — if it’s not working for you, fix it.

It’s also worth taking a few minutes to review your bank statements to make sure everything is in order and there is no fraudulent activity, overdraft fees, or charges for services you don’t use anymore.

2. Cut any unnecessary costs
Lifestyle inflation is hard to avoid and it’s easy to get sucked into the trap of spending way more than we need to. This spring, take the time to review whether anything unnecessary has creeped into your budget and become more of a burden than a bonus. Decide what you really need to live a happy life within your means, and cut back on anything that isn’t helping you to lead a carefree existence. If you can’t cut some costs completely, see if you can at least reduce them a bit.

Also review your debt payments to ensure you’re not paying more than you have to. If you have a credit card, for example, try to look for a 0% balance transfer card. Then try to keep paying the same amount on the card each month so that you can clear your debt quicker.

3. Check your investments and insurance
As life changes, so do our needs with regards to investment and insurance. Make sure that you’re aware of what your insurance covers and that everything is up-to-date if you’ve had any major changes recently. Also make sure that your beneficiaries are listed correctly and that everything is clear in the event of an emergency.

Do similar checks for any savings plans. Investigate any contributions, asset allocations or fees that are unclear in your investment portfolio, and arrange a meeting if you’re unsure as to how anything works. Ensure that everything is still in line with your risk appetite, and don’t hesitate to ask questions if concerned.

If you have time, it’s also worth getting a credit report to check that everything is correct, and consider investing your tax refund if you were given one so that you won’t be tempted to spend it.

4. Organise any clutter
Are you not quite sure where all your tax returns are hiding? Can you dispute an incorrect charge by locating your statements at the click of a finger? If not, then it’s time to keep track about all aspects of your financial situation for ease and efficiency.

A little organisation goes a long way, and this could be as simple as dedicating a filing cabinet to all your paperwork, or creating folders on a computer or in a cloud for different aspects of your financial regime. It doesn’t have to be fancy, it just has to work for you; and it will save you a lot of hassle in the long run.

5. Reconnect with your goals
Financial goals and priorities can shift for reasons in and out of our control, so it’s important to check in with yourself to see if you’re on track to to achieving what’s important to you.

If you’re way off path, don’t worry — just review your goals and make sure that they’re SMART (specific, measurable, actionable, realistic and timely). Rethink your priorities and reconsider your plan of action if need be.

Make a habit of checking in with yourself so that you can achieve your financial goals and make them a reality. Put a spring in your step and get cleaning in any financial nook or cranny that you’ve been leaving to gather dust for too long.

An article published on Maya on Money about the 10 key themes investors must not ignore in 2017 inspired thought about a word that gets used a lot in the world of investments — commodities.

The key takeaway from this should be that commodities traditionally move in opposition to stocks, so they can be a good way to diversify an investment portfolio — either for the long-term, or during unusually volatile periods.

Let’s take this opportunity to review what a commodity is and how they affect investments.

What is a commodity?
A commodity is a marketable good or service that is produced to meet a demand. A commodity is essentially uniform across producers, and this uniformity is referred to as ‘fungibility’. For example, oil would be considered a commodity, but Levi’s jeans would not be, as consumers would consider them to be different from jeans sold by other companies. When traded on an exchange, a commodity must meet specific standards, which is known as a basis grade.

A commodity market is a virtual or physical marketplace that is dedicated to the buying, selling and trading of raw or primary products. There are currently about 50 major commodity markets in the world that facilitate trade in approximately 100 primary commodities.

Types of commodities
Traditional commodities fall into two main categories — hard and soft commodities.
The term ‘hard commodities’ tends to refer to natural resources, such as metals (eg. gold, silver and copper) and energy (eg. crude oil and natural gas). While ‘soft commodities’ comprises of livestock (eg. cattle and sheep) and agricultural products (eg. wheat, rice, sugar and cotton).

Over the past few years, however, the definition of ‘commodities’ has expanded to also include financial products, such as foreign currencies and indexes. Technological advances have also led to new types of commodities, such as mobile phone minutes and bandwidth, being exchanged.

Why are commodities of interest to investors?
Commodities can have a big effect on investment portfolios, which is why “continued support for commodities” was listed in the article on Maya on Money as a trend not to be ignored. The article highlighted that commodities “have been trending higher for a year now. The demand side has been strong, which has been driven by China over the past three quarters. A supply contraction and potential consolidation, which is not yet materialised, will be incremental key drivers.”

Basic economic principles of supply and demand tend to drive commodities markets, so lower supply increases demand, which equals higher prices (and vice versa). For example, a major disruption, such as a health scare among cattle, might lead to a spike in the generally stable demand for livestock.

Slumping commodity prices can also provide opportunities for investors. However, investing in commodities can easily become risky because they can be affected by eventualities that are difficult to predict, such as weather patterns, epidemics, natural disasters, and even politics. Donald Trump’s proposed policies, for example, have kept commodity traders and producers on high alert recently. As a result, it is important to carefully consider your risk appetite and the length of time you have until you wish to achieve your goals, as this will affect the recommended allocation of your portfolio to commodities.

As with all parts of your portfolio, it is important to ensure you have a solid understanding of what you have allocated and why. Don’t hesitate to arrange a meeting to discuss commodities further, and don’t be afraid to ask questions if you’re ever unsure of any terminology.

When you were younger, did you have any idea what you wanted to do when you grew up?

Perhaps you now have children who at some point will need to consider their options and will need guidance, or perhaps you are at a stage in your life when you’re considering a change in career yourself. You may simply be interested in developing your understanding of which way the world is heading.

Whatever your incentive, an article that we found in a recent issue of HSBC’s magazine, Liquid, gives a good insight into five growing industries that could provide a successful career.

The author of the article emphasises how it’s important to focus on the big picture when choosing a degree, as any time spent at university will pave the path of learning – both socially and academically. Most business leaders are interested in well-rounded graduates who are adaptive to change and devoted to continuous development.

It is, therefore, important for anyone looking to continue with higher education to explore beyond the boundaries of their course curriculum and develop a range of skills that are of interest.

Here is a brief summary of the five fields that HSBC consider to have the most potential for growth in the future.

1. Alternative energy
Concerns about climate change and our carbon footprint have instigated greater research into alternative energy, which has led to notable developments in hydrogen power, wind power and solar power. Solar energy has become more efficient and less expensive in some parts of the world over the past five years, making solar power a US$3-billion industry. As these new technologies become more widely accepted, these industries will potentially create more careers for scientists, mechanics and managers.

2. Financial Services
There are several careers that deal with the management of finances, besides the traditional banking roles. Accountants are still in high demand, as are financial planners and analysts, due to more and more people needing help with their retirement planning and personal finances in unstable climates.

3. Information Technology
Our reliance on computers and mobile devices is greater than ever, and the world of technology continues to be one of the fastest growing industries in the USA, with unemployment at a steady low of 2.6% in this sector. The five most valuable companies in the world are all technology companies, so IT skills are incredibly valuable and can lead to careers in network and data analysis, or software development.

4. Healthcare
In addition to doctors and nurses, the healthcare industry relies on a diverse array of other professions, such as home health aides, pharmacists and physical therapists. With an increasing aging population, healthcare workers are in high demand, and “data from the US Labor Department indicates that 4 millions jobs will be added to this sector by 2018” to fill in the gaps in this industry.

5. Agriculture
Interestingly, agriculture is currently the fastest growing course at UK universities. This is arguably because it is a very diverse industry, which is not only for farmers. Graduates can go on to offer consulting services, develop agricultural technology, and work in research. The strong business focus of the subject teaches students how to forecast cash flows, put together business plans, and calculate margins, making them highly employable to food retailers and suppliers.

In a world filled with more course and career options than ever, it is advisable to start planning for the future to ensure that goals can become a reality. Annual undergraduate fees can be very expensive in countries like the UK, USA and Australia, so if one of your dependents wishes to study overseas, it is important to start saving sooner rather than later, and review your options to maximise your financial capacities.

Before we chat about the current asset allocation environment, let’s quickly roughly describe the term for those of us who may be unsure of what this means. Asset allocations broadly refer to the actual investment options – ie. when you invest money, it needs to go somewhere, and some of these options are called asset allocations.

Since South Africa was relegated to ‘junk status’ by two credit ratings agencies, investors have witnessed some currency depreciation, a shaken local equity market and a jump in bond yields. However, the aftermath hasn’t been quite as apocalyptic as some may have feared. This is mainly because the downgrades didn’t come as a huge shock, and many people had followed advice to prepare in advance and structure their portfolios in a way that would handle an uncertain investment environment.

Negative investor sentiment is still a major issue in South Africa, but fortunately, most people’s long-term investment strategies remain relatively unscathed. An article by Moneyweb summarises the current situation well, and provides some interesting insight to asset allocations.

Here’s a brief overview of some interesting considerations:

1. Bonds
Since the downgrades, bond yields have seen a significant leap, but some investors see this as market overreaction and consider it as an opportunity to increase exposure to this asset class.

It may seem contradictory to buy bonds at a time when many people are concerned about the government’s ability to repay capital and service its debt, but some investors believe that the potential yield is still worth the risk.

2. Geography
Post-downgrade, the South African Rand has come under pressure, but many investors believe that the currency is still strong enough to justify moving some funds offshore. If you have limited international exposure, the window of opportunity is arguably still open to add to your offshore assets.

3. Equity
Share prices of companies that don’t have a significant offshore component to their earnings, such as banks and retailers, have come under severe pressure in South Africa. It’s, therefore, worth considering some exposure in your local equity portfolio to ‘safe’ Rand hedges that earn most of their income outside of South Africa.

Since the credit downgrades, pockets of potential value have emerged in the South African market. It is challenging to get the timing right on these cheap local shares but they may provide nice rewards in the long-term if you do.

In our post-downgrade society, it is important to not have emotional reactions to crises. Rather, you should maintain an active interest in your portfolio and stay true to your investment philosophy once you have ascertained your risk appetite and financial goals. Don’t hesitate to arrange a meeting to discuss your asset allocations and investment opportunities in this post-downgrade environment.