One down, eleven to go.

We can almost say goodbye to January. It has been a smooth transition from 2023 into 2024 and it seems that nothing has changed. The equity markets in the USA are still outperforming the markets in SA; the dollar is still outperforming the rand; and all the geopolitical problems are still carrying on.

China is concerned about the performance of its equity market and has introduced some stimulus measures to stop the slide. If we look at the performance of individual companies, the biggest fall from grace for a superstar has been Tesla. This share is down 26% year to date and a lot of people see it go down a lot more. It seems the uptake of electric cars is slowing down quite substantially and not even Elon Musk’s cult following can fight the fundamentals.

There is no doubt in our mind that many unforeseen good and bad things will happen during 2024. One of the main concerns for older people is how much they can afford to spend. This is a very legitimate concern, because once you stop earning an income, you become dependent solely on your investment portfolio to provide you with an income. If you deplete your investments too early, there is no way of building up the capital again and longevity becomes your enemy. It is therefore important to evaluate your cashflow situation on a regular basis. This will provide you with some peace of mind and help you to avoid both over- and underspending.

If there is one danger to highlight at this stage, it is the deceptive comfort of staying in cash. Although it can make you feel good to see your interest being credited to your account every month, just take note of how much more expensive it has become these days to buy a coffee at your favourite coffee shop, or to go out for a nice dinner with family or friends. Inflation is like the waves constantly bashing against the rocks, the damage is not noticeable over the short term, but over the longer term the damage becomes very clear.

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