As advisers, our role is to develop a long-term investment strategy, and then work with you to deliver against that strategy.
One of the challenges we face as investors is how to sift through the constant flow of information, mostly negative, that we are exposed to and decide what is relevant to our investments
In South Africa, the news flow has been dominated by stories about Jacob Zuma, the changing finance ministers, slowing GDP growth and rating agency downgrades. As an indicator of their prevalence in our thoughts, here are the Google search trends on these topics by South Africans.
When looking at the above Google search trends on a global scale, we can see that these topics are virtually insignificant on a global scale.
If you are invested in the Johannesburg Securities Exchange, local government behavior and SA economic growth have less of an impact of your returns than you would expect. With over 70% of the revenue earned by companies listed on the JSE coming from outside of South Africa, the underlying drivers of the profitability of these companies is largely independent of the government.
Factors such as global growth, commodity prices and how we stack up compared to our emerging market peers are significantly more important. This can be seen when we compare the returns of the JSE to the Emerging Markets Index, and it is clear that these global factors are influencing our market returns substantially more than local ones.
Right now, you should focus on your long-term investment strategy and whether it is still right for you. Is your asset mix appropriate to give you the long term results you need, do you have the right proportion invested offshore and do you have a trusted advice partner to help guide you through the short term noise?