Posts Tagged ‘investments’

Offshore Investments: how to guide your decision process

Investing offshore should never be a knee-jerk reaction to events, but rather a decision taken as part of an overall financial plan. Your personal circumstances and risk tolerance should govern how much of your portfolio you should take offshore and into which asset class.~ Tamryn Lamb, head of client servicing, Orbis.

Offshore Investments

Offshore investments are any investments made in countries other than your country of residence. The key to offshore investing is to not only invest in a different country but also in different economies, markets and currencies, thereby diversifying your investment portfolio. It’s a good way to avoid keeping all your eggs in one basket. South Africa has a relatively narrow market and relies on only a few big stocks. It sits as the 17th largest stock market in the world, and for these pertinent reasons, you should be considering bigger opportunities in more developed markets. There are substantial and growing sectors to explore in global markets such as, Healthcare, Energy and Technology.

Factors to consider when investing offshore – or why your financial planner is vital:

Time Horizon

Global investment portfolios differ according to the timespan you are willing to invest. How fast or slow you want your returns will be affected by your personal risk aversion. Looking for quick returns can be a risky business, especially on international markets which can become volatile.

Tracker/Index funds or Actively Managed Funds

The former track the performance of a particular market benchmark—or “index”—as closely as possible. Index funds tend to be more tax-efficient and have lower expense ratios than actively managed funds because they generally trade less frequently. Alternatively, actively managed funds try to outperform their benchmarks and peer group average. However, there is risk involved because these funds can also miss their goals, resulting in losses for the fund—and therefore also, the investors.

Tax and Estate Planning

This will also affect your choice of investment. You will need to ensure that you derive maximum benefit from your assets during your life time, whilst also ensuring that you will be providing for maximum transfer of wealth to the next generation.

Choosing the funds right for you

Firstly it is important to lay out your objectives and consider what type of an investor you are. In this way, you are more likely to achieve the portfolio that’s specific to you. Your financial planner has not only the expertise, but also vital access to global insights and the world’s leading companies and fund managers. You need to work together to create a customised portfolio, choosing the right funds that will meet your individual requirements as closely as possible, taking into account your goals, family and current life stage.

Advantages of investing offshore

  • The South African financial market comprises only one percent of the global market, so you should give yourself the opportunity to invest in companies that have an international footprint, and which may therefore generate substantial profits.
  • By allocating just a portion of your investments offshore, you can spread risk, and enhance the possibility of generating better returns.
  • Offshore investing also gives you access to sectors that you would not find on the JSE.
  • A longer time frame is essential because of the dual volatility of currencies and the markets.
  • In addition, Estate Planning may benefit from investing in an offshore trust, and your financial planner can advise on this.
  • Investing offshore can also be a way of providing for your children’s tertiary education at overseas universities, or your own travel ambitions, or any plans you might have for retiring overseas.
  • Offshore investing offers a hedge for people who fear political or social unrest.
  • Offshore is also a way to protect your investments against the depreciation of the rand.
At the Foster Group, we take into account – whether short term or long term – your risk profile, your personal goals and other factors. Besides having a personal advisor who is backed by a team with extensive and diverse experience and qualifications, we have multiple investment strategies. We do not just offer you a product, we take you through our advice process and find you an investment solution best suited for you.

Adding quality to every stage of your life

The Foster Group, backed by a proud 28-year history, believes in working for only the best results in all areas, from investments through to retirement planning, and including insurance matters. Creating a personal partnership with each client – and mindful of every individual’s plans, dreams and goals – we are there to guide and advise you on each milestone of your financial journey, not only during your working years but well into retirement. For us it’s about more than just generating income and retaining capital in investments, it’s about the quality of your life each step of the way and your peace of mind. That’s why we focus on building sound relationships based on professionalism, experience, and friendship. Find out more about us at:
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Bitcoin: boom, bubble or bust?

“It is time to realize that they (cryptocurrencies) are the real barbarians at the gate.”

Andrew Sheng, chief adviser to the China Banking Regulatory Commission.

The world is changing faster than we can think. Disruption is constantly chipping away at conventional systems and driving change at a dizzy speed. Begun in 2009, Bitcoin was initially taken up by an elite few with the technical skills to dive and dabble in something so fundamentally disruptive, that it has taken several years for the penny to drop on the wider public. After a somewhat bumpy ride, the price of Bitcoin has risen from 0.0001 USD in 2009 to 1 000 USD in 2013, to over 4,000 USD per BTC as of August 2017.

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Small Business: high risk, high reward for the canny investor

The value of small businesses in our economy is often overlooked when planning an investment portfolio. But small businesses equate to a substantial impact in nearly all economies worldwide. There are more than 25 million small businesses in the US alone, accounting for up to 60% of jobs – and in a recent study by Paychex, small businesses have produced 13 times more patents than larger firms.

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Material Things: the investment value of possessions

Buddhists say that material possessions get in the way of reaching greater understanding of ourselves. There are probably some psychiatrists who might agree. But despite philosophy and advice, possessive desire is deeply entrenched in our psyche; older than history and part of the very foundation of being human.

Over a hundred thousand years ago, shells and stones became coveted and worked into objects of beauty. Ultimately these artifacts and their consequent trade value laid down the basis of all economies. Today, whether you buy property, art, collectibles or jewellery, you are investing in the security of physical objects as a steady alternative to the sometimes erratic performance of the stock market. Some people become master collectors, cannily purchasing objects of the past to shore up the future. Certainly, if you know what you’re doing, physical possessions may well enhance the security of your investment portfolio in uncertain times.

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How to Invest for Sustainable Financial Growth

Ayanda is the Vice President of his company. His investment portfolio is worth R15m, and is interested in sustainable growth.

Ayanda would like to invest a lump sum. What is the next step?

It is riskier not to invest than to be invested in something that is generally perceived as being risky or volatile, such as equity funds or stock markets. Therefore, the next step would be to make the decision to invest.

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