Volatile Markets

The sub-prime crisis has been brewing for sometime now and we believe that its effect is not trivial. It is fair to say that a reality check has come and volatility will reign supreme for some time to come.

Based on our long-term strategy for equity investors we believe that there will be valuable opportunities for fund managers to purchase quality, undervalued shares at good prices. For a long-term investor - as always - it is sensible not to panic. If you are in for the long-term, fasten your seatbelt and prepare for the rollercoaster ride. In time, you will come out on top. When dealing with investments and financial markets we may not be able to direct the wind, but we can re-adjust our mindset and think long-term.

Essentially the longer your time horizon, the more you can weight your portfolio to equity funds. As your time-horizon gets shorter, it is likely that we will advise you towards moderate risk. This philosophy applies equally to offshore investments.

Offshore Investments

Many investors have become disappointed with the performance of offshore investments over the past 5 years, and rightly so. But remember that although the South African Market has trebled in the past 4 years, South Africa is still subject to emerging market risk. Like other emerging markets this makes our market and currency vulnerable should Western World investment managers decide to pull out of emerging markets. Money already overseas should be left offshore as the SA Rand is a vulnerable currency. South Africans can legally invest up to R2m offshore. Existing offshore money should only be repatriated if you need the money in South Africa.

Hint for the Festive Season

Before you take that well-earned break and start to spend money that will earn no return, or on non-essential items, consider giving to yourself first by putting in place a wise monthly investment or increasing your monthly unit trust contribution. Remember, our offices will be open till 21 December. It is wonderful to give and receive gifts, but this time be wise as well as giving (more modestly, perhaps) to your loved ones.

Silke Financial Services has the skill, expertise and wisdom to advise clients to provide for retirement, no matter how old you are, according to your particular financial situation.

If you have any queries regarding the above commentary please contact us on 021 683 3380 or info@silke.co.za.