At time of writing the equity markets are having a strong start to the year. The JSE All Share is up 2,5%, the S&P 500 is up 4,8% and the Hang Seng is up 7%. In fact, only Australia is negative.
In South Africa we are also enjoying a strong rand at around R12,21/$ and the political sentiment is hopeful with Ramaphosa taking charge. Good news is that the long-suspended crime intelligence head Richard Mdluli was fired and that the Asset Forfeiture Unit (AFU) of the NPA is going after the Gupta family and has served a summons to preserve their assets worth in the region of R1,6 billion.
On the wealth management side it is important to remember that in these volatile times and with most markets in record territory, a correction of 10% or more can come at any time and one should ensure that one’s cash reserves are sufficient to cover costs for 3 to 4 years. The best way of doing this is by re-balancing your portfolio. Look at the funds that have done very well and take some profits from them; and identify those funds that have perhaps been perennial underperformers. Every fund manager has a unique investment philosophy which causes the fund to outperform others for a year or two and then underperform for the next year or two. This is why it is prudent to have more than one fund manager in your portfolio.
Last but not least, we saw the Reserve Bank leave rates unchanged on Thursday.