We firstly would like to wish you all the best success and happiness for 2017, and trust that you have had a relaxing and enjoyable holiday season. In preparing for 2017, we reflect on 2016 that will undoubtedly go down as the year of the “populist”.
2016 showed that the voices of the many truly do drown out the voices of the few. Irrespective of one’s personal views on whether or not the decisions made at ballot boxes around the globe in 2016 were “good” or “bad”, we clearly saw that democracy flexed its muscles last year.
The 2nd, and most troublesome, realization that came out of 2016 is that the pollsters and analysts could not have gotten it more wrong! Locally and across the globe, in almost every sphere, we saw polls showing one thing and the results showing the complete contrary.
This in particular further raised concern about what the mainstream media aims to portray as “independent” journalism seemed to look a lot more like political lobbying.
This mix has made it a very difficult year to make reliable investment decisions, which is what we have seen coming out in the numbers of many asset managers, locally and abroad.
And it isn’t over yet!
In the next 6-9 months we will be seeing the leftists and conservatives butt heads in several key EU states, with all eyes being on France and Germany.
Many have cited Brexit as the catalyst to the eventual demise of the EU, and maybe it indeed is. It is difficult to picture a world where the largest and most economically powerful member state bloc can break apart, leaving many questions and concerns for investors looking to the future. A simple answer to the above: Diversification.
Back home we have witnessed our own young democracy flexing its muscles as the country united behind Finance Minister Pravin Gordhan, not at the ballot box, but in our collective voices of support. It was encouraging to see big business and the public unite in support against corruption, perhaps giving the international ratings agencies enough conviction to maintain our investment grade status?
It is important to remember that in times of extreme volatility and uncertainty, there are always opportunities for investors. The investment theme that continues to remain the cornerstone of your financial plan is diversification across asset classes, geographies and asset managers. Knowing that all things in investment markets move in cycles it is crucial to remove emotion from decision making.
As always, we urge that you trust in the asset managers we have independently researched and selected, to remain focused on your long-term objectives, and committed to your personal financial plan.