Investment markets are driven by two things. Sentiment is the driver that is unpredictable and can change very fast. Fundamentals is the driver that provides you with the true value over time. If we look at the past two years in the equity markets we can see that sentiment was the dominant force behind equity returns. Sentiment has two triggers: the first one is uncertainty, which has a very negative impact on the markets; and the other one is confirmation, which has a positive impact on markets.
Most of the money we manage for our clients is invested in unit trust funds. A unit trust fund is just the name given to a collection of financial items lumped together and managed by a dedicated person. So if you have money in a local equity unit trust fund, you actually own a number of shares in South African companies, and if you are invested in a money market unit trust, you own various types of cash instruments.