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A question that’s not asked often enough is whether the way we go about retirement planning is necessarily the best way. All too often, this milestone is overshadowed by the pressure of whether we’ve saved enough to see us through our next life stage: a new stage in which our future is directly correlated to how well we’ve managed to plan in the past.
History, of course, tells us that Ponzi schemes and financial scams are nothing new. However, their sophistication in the online space and in a digitally connected world are tailor-made for casting a wider, global net that lures potential investors with promises of 20% or 30% returns – or, in one recent incident, interest of 7% a week.
It’s been over a year since the pandemic-induced stock market meltdown and since South Africa entered hard lockdown. It is time to look back and examine what this period has taught us as an industry.
The GDP print for the fourth quarter of 2020 has come in better than expected, seeing markets respond positively in terms of rand strength and bond yields. Year-on-year GDP fell by 4.1% compared to the expected 4.6% decline, while on a quarter-on-quarter, annualised basis we saw a very strong 6.3% versus an expected 5.6%.
Finance Minister Tito Mboweni’s budget has been received very positively, as demonstrated by the reaction from markets. SA Inc companies have rallied, the rand initially strengthened, and even the bond market is acting positively. However, while there are notes of hope, this budget also demonstrates a number of key risks, overly optimistic assumptions and potential weaknesses, pointing to an extremely challenging path ahead for the country.
The subject of 'finances' may seem as though it’s the antithesis of romance, as we all know that financial problems can act to the detriment of relationships. But working to manage your finances effectively together is often vital to building and maintaining a strong and healthy relationship with your significant other, and can even bring couples closer together.
Will investment fundamentals return in 2021 or will the great disconnect of 2020 continue? As we enter 2021, the market’s recent bout of festive cheer will have left many investors feeling upbeat. However, do not allow yourself to be carried away by the market’s high spirits. While there are many reasons to feel positive about the year ahead, it is equally important to note what markets seem to have forgotten – namely that the pandemic and its consequences are not yet behind us.
The GDP numbers are much better than expected. In fact, the 66% quarter-on-quarter, seasonally adjusted, annualised figure is better than even the best industry expectation. It has definitely been a positive surprise which has been well received by the market as we can see from the positive movements in the rand exchange rates as well as the bond market.
The June Supplementary Budget had already made it clear that South Africa was in a dire financial state. So, from that perspective, Finance Minister Tito Mboweni’s Medium Term Budget Policy Statement (MTBPS) offered very little in the way of surprises.
Latest GDP figures have laid bare the grim reality of COVID-19’s economic effects, revealing an unprecedented 51% decline in economic activity in the second quarter of this year (quarter-on-quarter, seasonally adjusted and annualised).