You can never be too comfortable or too canny when it comes to investments. In a world that is ever-changing, there are going to be ups and downs, not to mention the occasional unexpected swoop one way or the other. Many factors affect the markets – which are built on speculation and perception – and your reaction may be just one link too many in a chain reaction that can unravel years of quiet progress.
Developments in science, environmental concerns and the rise of social media have created greater awareness of human activity and the ensuing damages we effect around the world. Along with this greater understanding, comes a more responsible investor who takes specific interest in how investments may be used for the benefit of the planet.
Solving the Retirement Riddle
For many years investors have enjoyed the benefits of local investment markets which have delivered returns far in excess of more conservative and ‘normalised’ financial planning budgets. Money market – the lowest risk asset class – has beaten inflation by 4% per year, for 25 years! Local equities have delivered almost 9% in excess of inflation, property more than 12%! Which makes the more recent market returns somewhat sobering: negative real returns in 2016 for the average balanced fund, and only inflation matching returns for the past three years.
For investors in retirement these lower returns have started to cause real concern: will their retirement capital be sufficient to last their lifetime?
The boom years made it relatively easy to sustain higher lifestyles and levels of drawings from portfolios, typically out of a living annuity (where the investor takes the risk on the longevity of their capital). High returns hid the fact that the majority of retirees were under saved, overdrawing, or both. As it stands the average living annuity drawing rate in SA is about 6.5% per year, in excess of the recommended guidelines.
Download the full article here.
What has happened thus far:
- A major reshuffle in cabinet ministers seen as a destabilising move by the government. Primarily this drives uncertainty on economic policy, and the stability of state institutions (e.g. Eskom). Increased uncertainty increases the risk attached to South African linked investments, typically resulting in a fall in prices (and therefore returns).
- The currency as well as government bonds and local dependent shares (like banks) have sold off to reflect worsening prospects. This impacts most investors.
Download the full article here.
Petals Care Centre (owned by the PETALS TRUST) was established in 2014 by founding member, Christine Coelho. It provides a secure facility for elderly men and women who are destitute, to enjoy peace and independent living within a safe environment.
Their latest residential premises in Riviersonderend were purchased in 2016 and accommodate 16 residents who:
- suffer from dementing illnesses;
- are destitute from families;
- need access to proper personal care;
- suffer from sensory or physical disabilities;
- are victims of domestic violence.
It is our joy to manage the financial statements for Petals Care Centre, absolutely free of charge.