• Editor

So that was January


"Meet the new boss. Same as the old boss"

- Pete Townsend "Won't get fooled again"


I get the sense that this year will be a lot like last year


Covid


We all took a bit of a knock in 2020 and were happy to see the year end. As the year drew to a close and we started to relax and socialize more, the second wave of Covid hit us. To make matters worse, this second strain appeared to be a lot more contagious than the initial one. There were many instances where both the husband and wife got Covid. I know of a couple of cases where both died.


When Covid first arrived, I spoke about my fear that many children would be orphaned. Luckily this did not happen in the first phase. I am not too sure about this new strain.


Please make sure that you have your will, guardianship and life insurance sorted out if you have dependent children.


JSE


Many of us received an unexpected Christmas bonus with the JSE finishing the strongly.


Who would have thought at the stock market would have given an overall return of 7% last year when is it had fallen by 35% in March.


As you can see from the table above those who took my advice and kept their money in the market when it fell have done. Those who invested offshore have also seen their wealth increase.


Looking forward


I attended a number of economic and investment webinars this January and this is my take on what the clever people are saying:

  • Interest rates

These are likely to remain flat for the next year. It is probably not a good idea to use bank deposits to provide you with an income as the returns are not going to be that good

  • Inflation

The current inflation rate of 3.2% is very low. It is likely to increase over the coming months with food prices increasing.

  • Investments

Offshore equities are expected to do well. This is based on the expected stimulus that the Biden presidency will give to the US economy, an expected 8% growth in China's GDP, the high level of pent-up consumer demand and an analysis of the price-earnings multiples of stocks.


How much should you have offshore?

I recently came across a study which indicated that you should have between 35% and 50% of your assets offshore, as can be seen below.


If you want to increase your offshore exposure, you can do this easily by using a local offshore tracker fund or in an offshore-based investment plan.


May 2021 be kind to you. You've got this – you survived 2020


Till next time, keep healthy


ENDS