Nick Pitro, a senior manager of Austen Morris Associates, a global independent wealth manager, says many investors rightly feel it is prudent and a sensible hedge to have hard currency assets.
“But sometimes, in the desperate urge to get funds away from South Africa, they don't follow a well-thought-out strategy.”
* A bank account is not enough. In the past two years, there has been a surge in South Africans opening offshore bank accounts. Although this is a good first step, many people's strategy is simply to send money to their offshore accounts every so often. “Sitting in cash in bank accounts in most countries pays next to zero, and certainly less than inflation. This is a losing strategy.”
Pitro says investors should look to quality global equities, because they are likely to do well over the long term and provide excellent JSE diversification benefits.