We acknowledge that you may be worried about the economy, including inflation pressures or a recession. Moreover, we have seen recent research that suggests people are sitting on high levels of cash. This can be a dangerous time and it remains an important time to be grounded by your financial goals.

To support you, I’d like to share some financial tips for your interest, which may help you given the current state of the economy and markets. If any of the following interests you and you’d like to explore our professional opinion, please reach out as we’d be delighted to help.

• Assess Appropriate Product Options for New Money

We always want to keep your financial aspirations and risk tolerance in mind, with different products available. Whether you want to “sleep at night” or “capture the discount”, we should be able to guide you through your options.

• Review Other Value Drivers, Such as Tax Arrangements

All too often, investors think in pre-tax terms. Whether we look at our wages or our investment returns, many of us fail to consider tax implications. A financial tip that can potentially help is to consider tax-loss harvesting during market setbacks, which research
shows can help increase after-tax returns.

• Review Your Goals Post Pandemic

It is a healthy exercise to review your goals at regular intervals, but this is especially important today. Research shows that as much as 71% of people change their top 3 goals by doing a simple review exercise, which is quite remarkable and appears especially likely as we come
out of the pandemic.

• Ask Yourself… “Am I Nervous or Fearful?”

Every investor will endure downturns on their journey, yet it is the ability to reflect and learn from the lessons that make for sound investing. Having gone through another downturn, it is worth marking down the lessons, including the fears or questions that drove your thinking. Research shows that behavioural coaching can add meaningful value – acting as a steady hand when you need it.

• Rebalance with a Total Viewpoint

As markets move, we encourage you to adjust. Rebalancing is not foolproof, but it can potentially help manage risks, avoiding unwanted market drift. It is mostly used at the portfolio level, but you can do the same at a personal level – looking at everything from property to cash, and the ratios of each that you hold.

Summary

The above ideas are intended to nudge good investment behaviour and help provide a broad perspective on your financial journey. We hope you found them insightful. To reiterate, if you’d like our professional assistance in implementing, we’d be delighted to help.

Raoul Gordon

Risk Warnings

This commentary does not constitute investment, legal, tax or other advice and is supplied for information purposes only. Past performance is not a guide to future returns. The value of investments may go down as well as up and an investor may not get back the amount invested. Reference to any specific security is not a recommendation to buy or sell that security. The information, data, analyses, and opinions presented herein are provided as of the date written and are subject to change without notice. Every effort has been made to ensure the accuracy of the information provided, but Morningstar Investment Management South Africa (Pty) Ltd makes no warranty, express or implied regarding such information. The information presented herein will be deemed to be superseded by any subsequent versions of this commentary. Except as otherwise required by law, Morningstar Investment Management South Africa (Pty) Ltd shall not be responsible for any trading decisions, damages or losses resulting from, or related to, the information, data, analyses or opinions or their use.

This document may contain certain forward-looking statements. We use words such as “expects”, “anticipates”, “believes”, “estimates”, “forecasts”, and similar expressions to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially and/or substantially from any future results, performance or achievements expressed or implied by those projected in the forward-looking statements for any reason.

Morningstar Investment Management South Africa Disclosure

The Morningstar Investment Management group comprises Morningstar Inc.’s registered entities worldwide, including South Africa. Morningstar Investment Management South Africa (Pty) Ltd is an authorised financial services provider (FSP 45679) regulated by the Financial Sector Conduct Authority and is the entity providing the advisory/discretionary management services.