Tag: asset allocation

There has been a sharp downturn in the price of bullion and gold equities. What has caused it, and where does it leave the outlook for gold from here? The fall in the gold price on October 21, a drop of 5.5%, was among the ten biggest single-day falls for the metal. Gold equities also suffered a big correction of approximately 9%.

Periods of market turbulence have long tested investor conviction. When uncertainty grips financial markets, traditional portfolios often reveal vulnerabilities. Recently, shifting US policies, fluctuating interest rates and geopolitical tensions have driven this uncertainty.

2024 marked the biggest election year in human history. Over 70 countries held elections, representing more than half the global population. Estimates show that over 80% of incumbent parties lost voter support in 2024 compared to the previous election. This shift made 2024 a significant year for global democracy.

Investing in an offshore retirement fund is one way of growing your wealth in a stable economy over the longer term, or even gaining residency in a foreign country. However, for South Africans, this scenario presents as many challenges as it does opportunities and should only be considered after consulting with a financial adviser and tax expert.

In the midst of buoyant equity markets and impressive returns, the prudent investor recognises the imperative of fortifying their wealth against a risk premium. As markets surge and fluctuate, the need for astute wealth management strategies becomes ever more important – particularly for South Africans who need to measure and manage their wealth in global terms.

The global economic backdrop continues to improve gradually but great amounts of uncertainty remain. While most of the major central banks are now likely at the peak of their rate hiking cycles, inflation remains sticky and sustained high levels of interest rates are having a dampening impact on economic growth.

In February 2022, Finance Minister Enoch Godongwana amended the maximum offshore investment limit for Regulation 28 retirement funds from 30% of assets to 45%. But data shows that most funds haven’t maximised their exposure to the new limit, begging the question: why?

For many years, the concept of self-made success was considered by many to be the ‘making of the man’, with each generation expected to prove their self-worth by being at least as financially successful as the generation before. However, the adage of shirtsleeves to shirtsleeves in three generations continues to this day, with a recent Harvard Business Review article by Stark and Foley finding that 70% of wealthy families studied lost their wealth within the second generation, and 90% within the third.

Progressively more articles are appearing warning that the South African economy is heading for a total implosion. The sentiment is incredibly bearish on the ground and South Africans are finding themselves between a rock and a hard place.

If globalisation was powerful for disinflation, de-globalisation is the reverse. We have reached peak globalisation. The world has reached the limits of economic and political integration. The result is the partial reversal of one of the most important deflationary forces at play in global economies.