Asset Management – Third quarter 2023
An in-depth market commentary – detailing global and local investment performance over the quarter – with our Asset Management team revealing the technique of astute financial management through the application of compounding interest. Market Overview Q3 2023 Money that multiplies: The power of compounding interest
Asset Management – Compounding interest
Samir Narotam Portfolio Manager _______________________________________________________________________________________________________ Money that multiplies: The power of compounding interest What is the ‘compounding effect’ and how does it work in one’s investment portfolio? Compounding is the process of earning returns on your past returns. It’s one of the most powerful tools in investing, and it can help your investment grow exponentially over time. Taking an analogy from the Oracle of Omaha – Warren Buffet, think of a snowball rolling down a hill, and with each rotation, it picks up snow and grows. The larger the snowball, the more snow it accumulates for each rotation and the longer the hill, the more time it has to grow. To understand the intricacies of compounding, it is helpful to start with a simple example: Imagine that you invest R1 000 in a five-year, 5% fixed... Read More
Wealth Management – Capital appreciation to income generation
Jenny Williams Senior Servicing Consultant _______________________________________________________ Considerations of a long-term well-structured retirement portfolio – Part 3 Navigating retirement planning: Shifting focus from capital appreciation to income generation Last quarter we analysed the difference between pre – and post – retirement portfolio construction and some investment errors we frequently come across. In this, our third and final article on structuring retirement portfolios, we focus on the appropriate revision of a retirement portfolio once its objective changes from providing capital accumulation to regular income drawdowns. A typical financial journey will take you through various stages beginning with accumulation and (almost always) ending with spending. Because of this, the investment strategy adopted must change. Retirement date (and for the purpose of this article, this is defined as when you stop drawing a salary from an employer) necessitates a crucial shift in... Read More
Healthcare Consulting – Medical aid premiums 2024
Jillian Larkan Head – Healthcare Consulting _______________________________________________________________________________________________________ Navigating the 2024 medical aid landscape: Balancing health and finance September of each year marks the beginning of the medical aid premium announcements for the next year. These have historically been concluded by the end of each October. As medical aid premiums – more than any other household expense, other than perhaps electricity – routinely increase by more than CPI, many South African consumers are understandably anxious about budgeting for the funding of their 2024 healthcare premiums. This year, the Council for Medical Schemes (CMS) issued guidance, urging medical aid providers to keep their increases within a range of ‘5% plus reasonable utilisation estimates’ in the fairly technical 12-page Circular 27 of 2023 entitled: ‘Guidance on contribution increases and benefits changes for 2024’. In summary, Mr Mfana Maswanganyi – the Executive... Read More
Market Overview – Third quarter 2023
In-depth market commentary – Staying focussed on the long-term goal The quarter ending September 2023 has continued to reflect a challenging global investment market backdrop. Enduring economic uncertainty has prolonged elevated investment market volatility. Subdued global trade and stubborn core inflation has led to persistently restrictive monetary policies from global central banks which with the elevated yields have kept markets on an uneven footing. As previously communicated, heightened risk factors necessitate continued caution in portfolio positioning. Over the quarter: Much of the tumultuous investment market environment this year has been masked by the share price gain of a few global technology companies primarily linked to the artificial intelligence space. These shares represent a large weighting within global developed market indices and almost fully account for the entirety of the positive dollar-based performance delivered by the S&P500 index (US equity market)... Read More
