By Gershwin Wanneburg
The jury is still out on how badly South Africa's economy will react to the havoc seen on international financial markets, but there is no question that there will be some repercussions here at home.
The estimated six million South Africans who have money invested in retirement annuities or pension funds cannot escape what is happening on bourses like London and Tokyo - since local stocks have responded automatically to these movements. The entire industry is worth about R1-trillion, according to Old Mutual.
"Obviously they (locals) don't escape this kind of sentiment. This means probably the majority of people out there are affected by markets like this," said Ferdi Heyneke, portfolio manager at Afrifocus Securities.
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'Remain calm. Don't do anything irrational' "There is an indirect impact, whether it's retirement annuities or pension funds - you are in it."
But experts caution against panicking. In summary, they believe long-term investors should keep that objective in mind and remember that markets go through up and down cycles all the time.
Just to show how in sync local and overseas markets have been, the S&P Index of 500 leading stocks in the US had by Wednesday lost nearly 20 percent of its value since the start of 2008.
In South Africa, the JSE Top 40 Index had lost a similar amount over the same period.
The value of your pension or annuity investments depends on how it is split up between assets like stocks (or equities), bonds, property etc and on which shares make up your portfolio.
But annuity or pension fund managers generally base their equities selections on the Top 40 or "blue-chip" stocks on the JSE.
Some of the most recognisable stocks among that group are: Anglo American, Sasol, MTN and Standard Bank.
If you owned an Anglo American share at the beginning of this year it would have been worth about R419.
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