Ride out volatility and maximise returns

Increased local and global volatility, rand weakening, negative sentiment present good opportunities for investors, one must still ensure you are positioned to cope with the volatility. Andrew Lapping, Allan Gray Chief Investment Officer, discusses what you do as an individual to make sure you are well positioned to cope with volatility.

We believe our model portfolios we are well-positioned to deal with the probabilities and impacts events caused by market fluctuations to maximise returns over the long term. The below vividly simple illustration, sent to us by a client, brilliantly sums it up. 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.

Thriving in market volatility

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.

Many investors have become disappointed with the performance of offshore investments over the last couple of months. But remember that although the South African Market has done well, 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 R10m offshore. Existing offshore money should only be repatriated if you need the money in South Africa.

It is time for a clear vision and strong leadership in South Africa! We continue to be rand biased. Exploiting the benefits of global diversification when long term capital preservation is a priority.

Our integrated wealthcare approach is based on your personal priorities and aspirations. This process is designed to give you a clear course of action for pursuing your goals that span various time horizons and life stages to empower you to do extraordinary things with your wealth, both now and in the future.

Ride out volatility and maximise returns - Andrew Lapping (Allan Gray Chief Investment Officer)

Regards,

Shane Thom, CFP^® GTP(SA)™
Managing Partner: Integrated Wealthcare Advisor