26 March 2019 - 05:10Media-savvy pundits love manipulating unsuspecting investors through columns or interviews that play on our emotions — especially those emotions that have the worst effect on investment decisions.
The longer an entire group of investments underperforms, the greater the chance that they will outperform in future. Anyone who has studied investment markets would know this. Therefore, we need to question the motives of people or companies that propose options that are counter to this common sense.
Investors need local assets to generate income to pay local monthly expenses. It is not sensible to rely on offshore capital to fund monthly expenses, as currency volatility could cut your income 10% within days when the rand strengthens. This is especially critical when you have limited capital and therefore cannot simply draw more money when the rand strengthens.
Then you are told to invest in international shares at a time when the US stock market is expensive. This is not rational. The local stock market will reward patient investors as local companies are offering good value to investors now. It is ultimately this value that will determine long-term returns, not the views of some salespeople punting their offshore products.
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