'Rays of opportunity amid the storm clouds'

By Supplied Time of article published Oct 10, 2019

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The Global economic landscape is complex. Trade wars, Brexit, escalating tensions between Iran and the West, and the tentative unwinding (or indeed reintroduction) of quantitative easing - arguably the biggest financial experiment in history. 

Add to this the climatic consequences of global warming and it’s easy to see why investors throw their hands up in despair. This hardly seems the perfect time to look abroad for investment options.

Not true, says Andrew Brotchie, the managing director at Glacier International.

There are more opportunities than we can imagine as this is the age of ideas and innovation. Advancements in artificial intelligence and machine learning are leading us down exciting investment paths. Look for opportunities and you will find them.

Brotchie cautions against ignorance, and everything has a context. We can’t ignore the turmoil in geopolitics, in all quarters of the globe. We have to be aware of the rise of nationalism around the world, a consequence of the fragile interplay between liberal democracy and the version of capitalism that we have created. There are too few winners in this game. Humans often adopt a narrow world view when their survival is under threat, and nationalism is a function of this.

Recently, due to some election surprises around the world, currencies such as the Argentine peso have plummeted, and stocks and bond markets have suffered the same fate. However, these countries are coping and finding innovative ways to recover.

Remember how bad things were for Greece a few years ago during their crisis? The Athex - the main Greek stock index - is now up more than 40percent since January (roughly double the Standard & Poor’s 500 over the same period). Sovereign yields are lower than the US, and after contracting by more than 25percent during the crisis, Greece’s gross domestic product grew by 1.9percent last year.

South Africa is not going through this kind of crisis, but we have socio-political challenges that we need to deal with urgently. Corruption, poverty and crime are crippling us economically, and adversely affecting the morale of our people. Positive action to address these ills, and visible outcomes of these actions, are needed urgently.

Dealing with everything that is happening in the global arena requires patience, resilience and know-how. Here are a few tips to help you cope:

* Start as early as you can. There is no age restriction - or limit - to being an investor. Also, many people realise too late that they have not saved enough for retirement.

* Find a good partner. Adopt the criteria for choosing a life partner when choosing a financial planning partner: trust, stability, integrity, a sound track record and a good reputation.

* Consider offshore investment options. Although global returns have been muted recently, global equities have broadly returned in the region of 28percent in dollar terms over the past three years. So, there are some good reasons to include offshore investing as part of your portfolio, and a qualified financial adviser can construct the most appropriate one relative to your risk appetite.

* Be in it for the long run. Investing is a marathon, not a sprint. Prepare to put your money away for at least five years (there's a sound argument for 10), and relax. There's nothing you can do about Brexit.

* Don't panic and stick to your plan. A qualified financial planner should have experience in portfolio construction. They will design a portfolio that suits your risk appetite. Stick to the plan and turn off the news sometimes. Watching daily troughs and peaks in your portfolio is not sensible and will only add to your anxiety.

* An annual review of your portfolio is essential. Life happens and your needs change. An annual financial check-up is as important as your annual physical. 

Supplied by Glacier by Sanlam


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