Financial markets are in choppy waters, with conditions profoundly changing direction overnight on a Trump tweet or expectations for the world economy. Sanlam Select navigates these challenging conditions by following a dynamic approach that gives advisers access to next generation asset managers that offer additional sources of return.
South Africa’s government finances are cause for grave concern. The only plausible way forward is to tackle the problem now, before it becomes insurmountable and government finds itself in a debt trap.
Developed country stock markets were notching up steady gains until the last day of the month when the US Federal Reserve upset markets by putting paid to market expectations that a 25-basis point rate cut may be the beginning of an aggressive rate-cutting cycle. Developed market stock markets still managed to gain ground for the month but emerging markets fell into the red.
Baba Shiv, marketing professor at Stanford Graduate School of Business, was speaking last month about neural networks and how they shape emotions, motivation and ultimately your client’s financial plan at the annual i3 Summit, hosted jointly by Sanlam Investments and Glacier by Sanlam.
At the sixth annual i3 Summit Satrix chief investment officer, Kingsley Williams, likened the structuring of a successful investment portfolio to choosing the right systems to harvest and store water. “We build portfolios to achieve specific objectives; if we equate water with market returns then we can see how the analogy plays out”. The trick is to have different sources of water, or a sufficiently diverse portfolio to generate excess return through both good and bad times.
Global growth does seem to be slowing down. During the second quarter of 2019 the IMF lowered its forecast to only 3.3% for 2019. If this materialises, it will be the lowest growth rate since the Great Financial Crisis. In South Africa, data released showed that our economy shrunk by 3.2% in Q1, the biggest contraction in a decade. What else happened during the second quarter of 2019?
Global markets during 2019, and in fact 2018, have been hinging on President Trump’s tweets to find out whether to brace itself for an escalating trade war or a return to more tranquil times. At least the ban on Huawei accessing US technology has been suspended, easing relations with China and also bolstering China’s suppliers. Trump did not go so easy on Iran this month, though…