Tag: PSG Asset Management

Periods of heightened volatility can make even experienced investors second-guess well-considered decisions. However, the most damaging outcomes often result from a handful of predictable behavioural mistakes. These include panic selling, focusing too heavily on macroeconomic forecasts instead of valuations, chasing recent winners and assuming the future will mirror the past. Understanding these behaviours is essential when investing in volatile markets.

South African bond markets rewarded fixed-income investors with exceptional calendar-year returns in both 2024 and 2025. The All Bond Index (ALBI) returned 17% and 24%, respectively. These returns significantly exceed the norm. Therefore, we anticipated moderating performance in 2026.

For South Africans, investing has always been a global game. This is not only because Regulation 28 of the Pension Funds Act has allowed investors to include up to 45% offshore assets in their portfolios for the last three years. It is also because South Africa’s economy and stock market are small compared to the rest of the world. Furthermore, the JSE itself is becoming increasingly global in nature.

You have just lived through an exceptional part of history. No, I am not talking about the COVID-19 pandemic, although it does play an important role in what we think about as the Great Unwind. Rather, I am talking about the extraordinary period of low inflation we have seen over the past few decades.

2022 was an extremely tough year for global fixed income assets, with long bond yields rising sharply in developed markets resulting in one of the worst years for bond markets in almost a century. Emerging market bonds suffered both from a correlated move higher in yields in line with developed market bonds, but also from heightened volatility.

As we wind up 2022, it is natural to reflect on yet another tough year in the markets and to start planning for the one that lies ahead. We believe there is one crucial ingredient investors will need to ensure investment success in the new year: a fresh mindset.

We often hear that South Africans are not saving and investing enough. A report from Genesis Analytics in partnership with the Financial Sector Conduct Authority (FSCA) showed that 90% of South African retirees can’t sustain their standard of living prior to retirement, and two-thirds of members have less than R50,000 in their retirement fund.

Significant uncertainty, marked by rampant inflation, fears of a looming recession and growing geopolitical risk, clouds the near-term global outlook. The knee-jerk reaction is to retreat to safe assets and preserve capital until the storm has blown over.

Inflation has been making a comeback. Not so long ago, it had seemed that we had vanquished (at least in the developed world) this sneaky foe of long-term wealth creators everywhere, thanks to tightly controlled central bank policies and the wonders of inflation targeting.