Given the volatility of South Africa’s currency, its political situation and its economy, local investors would do well to establish portfolios that preserve their capital for the long term that incorporates offshore investments as a rand hedge. According to the deVere Group diversity is key.
“High-net-worth South Africans who remain in the country* may benefit from having a financial presence elsewhere,” says Tom Elliott, international investment strategist at the deVere Group.
“It’s no secret that the local economy is currently in the doldrums – if not a true recession – and that political and economic uncertainty continues to hinder growth.”
Elliot highlights key issues facing the SA economy, including Eskom, international economic factors such as the US-China trade wars and others, influencing the performance of the rand.
“For a country so precariously placed, global economic turbulence has a significant impact on economic performance,” says Elliott.
“Don’t resort to knee-jerk responses. Consider whether your portfolio is already responsive to volatility. It’s always helpful to speak to an investment advisor to be sure that you are accounting for all possible outcomes”, Elliot cautions investors.
* Government needs to tackle the drain of high nett worth clients as a matter of grave concern. With the bulk of its tax income coming from this small elite group, it can hardly afford to lose more of them, given the current precarious state of revenue collection.
Click here to read the DeVere media release.