Buying opportunities

Last week saw some pretty hectic turmoil in equity markets worldwide.

Investor sentiment changes quickly and can drive markets into a frenzy, both positively and negatively.

So, how does this affect you, our valued client? The answer to this question relates to your individual investment time horizon.

We suppose a fair amount of people perceive asset managers to have predictive superpowers, but the fact of the matter is that here at Silke Financial Services we can predict just about as well as anyone where the stock index may sit in a week or two's time.

What we are sure of, however, is that by carefully selecting stocks on solid fundamentals that are attractively priced for reward and risk over the long-term, you need not worry where the market will be in a week or two.

We need to bear in mind that investing (as opposed to speculation) is a long-term game and therefore investors should not get bogged down by daily or weekly volatility. Rather, we should focus on the big picture, assess your financial plan and the need to invest in equities (wholly or - more likely - as part of your portfolio).

History has repeatedly demonstrated that markets do not move up, or down for that matter, in straight lines. Silke Financial Service's view is that people who seek the best real returns over time should be prepared to experience possible pull-backs over the shorter-term.

The bottom line is:

• For a long term investor, stay in the market.
• If you have money you cannot risk, stay away from the market.
• If you are investing by monthly debit order into an equity fund and your time horizon is long term, keep on doing so because if the market drops you will be buying more units at a lower price.
• View dips in the market as a buying opportunity.

Silke Financial Services has the skill and expertise to advise you appropriately, according to your investment time horizon.

Ken Silke
E-mail: ken@silke.co.za