What a start to 2008!

How has 2008 started off for you? The future was rosy on 31 December 2007 but suddenly everyone is buying candles and researching property in Perth! Well, things like rising interest rates, the credit squeeze, 08600ESKOM, the National Credit Act, global volatility and a United States strongly rumoured to be going into recession have all combined to create the perfect storm.

Don't panic! This will not be the first or the last time that this doom and gloom has been 'foie gras-ed' to us by the news-selling media. It happened in 1989 when South Africa defaulted on its international loans and the stock market and the Rand crashed; it happened in 1994 when the ANC took power and everyone thought that war would break out; it happened in 1998 when interest rates hit 25% and you couldn't give away your house and it happened in 2001 when Osama bin Laden orchestrated a devastating blow to America and its internal security.

We should look upon 2008 as another great opportunity for investors to take advantage of bargain prices and not allow themselves to be swayed by media negativity.

Silke Financial Services identifies itself with the words of the famous investment guru Sir John Templeton whose words are appropriate to what South Africa and the world is currently experiencing: 'The best time to buy is during times of maximum pessimism and the best time to sell is during times of maximum optimism.'

Yes, 2008 will be a tough year but realistically speaking we have unashamedly enjoyed fantastic economic growth over the last couple of years.

What is really happening? When positive news gets ahead of itself, panic sets in because the economy seems to be collapsing, when in actual fact it's simply making an adjustment back to reasonable levels.

Remember good news usually follows bad news. The past 100 odd-years of history have been filled with times of trouble. Let's look at some major events 'causing losses' over the past century.

While no one can predict that the future will mirror the past, history shows us that stock markets have rallied within months of a disaster.

What should we be doing as investors? Don't make rash decisions about when or not to invest. Silke Financial Services has the experience, skill & knowledge to guide your investment-making decisions in the most appropriate manner.

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