In the absence of big problems, we tend to imagine our small problems are big. We are at a possible inflection point in our country’s history with our national elections upon us. South Africa has been remarkably fortunate, in spite of our somewhat troubled past, with regard to changes in political power. We have not seen a bloody transfer of power over the last fifty years or so; the closest we got was in 1994, which will only be remembered by people older than fifty. In the 1980s we had bombs exploding in our streets and various acts of terrorism, but our country still never ventured into the situation that countries like Tunisia, Egypt or Libya has had to cope with around 2009.
If we can once again have a free and fair election on 29 May 2024, our financial markets will thank us for it. Getting back to our opening remark about big and small problems; we might think that underperforming local equities, currency or bonds are big problems, but they are not. The reason for this underperformance not being classified as a big problem, is the fact that you do have the choice to invest offshore. Only once that choice has been taken away, will it become a big problem. Similarly, not being able to buy everything you want, is a small problem. Not being able to buy anything because everything has been bombed away, now that is a big problem.
Next week we shall be able to see what the impact of the elections has been on our investments. We shall see if the rand can stay below R19/$ and if the JSE All Share Index can close above 80 000, but by far the best result would be that our small problems have not become big ones.
