Traditionally, at this time of the year, we consider the year past and what the year ahead may hold. It is a long  time since we have had such a challenging  task, with all that has (or has not) happened.


There has been much written about the 2018 challenges. Suffice to say that the year started off with a sense of great optimism following  the election of President Cyril Ramaphosa, but we were soon faced with the understanding that the task ahead was going to be much greater and slower to deliver, given the extent of the rot of State Capture.


On the world stage we were faced with Donald Trump’s unpredictability which has harmed world trade and emerging markets in particular. The continuing unwinding of unsustainably low interest rates in the USA has made investors nervous,Pic 1 especially of investing in emerging markets.


All in all, South African investors have had to deal with a perfect storm, both from local and external sources.


The resolve of fund managers, financial advisers and investors has been tested by poor market returns in growth assets such as equities particularly when compared with the alternative of apparently favourable interest rates and no risk of short-term capital loss.


What of the year ahead? Many of the uncertainties of 2018 persist. An important crossroads in South Africa will be the general election in the second quarter of 2019, which should clarify whether President Ramaphosa has the mandate to carry out the promised reforms more vigorously or whether he will continue to be hobbled by his master, the ANC.


He tabled a long shopping list of actions at the February State of the Nation address, and so far, has initiated the majority of the actions, which are either progressing or completed. However, it must be said that the challenges in some areas have turned out to be much greater than expected.


We are optimistic that the elections will give our President the mandate he needs to continue with the reform process at a faster rate than we have seen this year.


Thank you for trusting and supporting our views of the markets over the past year. We spent a great deal of time trying to understand how fund managers were responding to the investment environment and adjusting client positions as required in terms of their long-term financial objectives. It would be great if the task in 2019 was easier than this year!


Best wishes for the festive season, enjoy the holidays and travel safely!