Fourth Quarter 2018
Jurgens Group wishes you a blessed festive season and thank you for your on-going support
Seasons Greetings to you all
Welcome to our fourth and last newsletter for this year, all of which we trust kept you updated on our latest news and useful savings and investment guidelines.
This past year has been an eventful one in the political arena – both at home and abroad. The Rhamaphoria earlier on in the year was a welcome reprieve from the erratic Zuma era and slowly we are seeing progress in identifying those involved in state capture. With on- going appointments of non-corrupt leaders in key government positions, we should be heading in a more positive and stable direction.
Our poor economy has unfortunately, had a negative effect on the JSE and rising living costs have placed further ﬁnancial pressures on the consumer. The petrol price has been one of the only reasons affecting inﬂation – food has been almost zero.
With the elections fast approaching in 2019, the focus of our nation should be on political parties being held accountable on issues of corruption and ﬁscal discipline.
The Investment Summit held recently, proved very successful in attracting foreign investment which in turn will provide a much-needed boost to the economy going forward. South African corporates need to regain conﬁdence to allow for expansion and investing further in our economy.
On a global scale, there has been much instability amongst the Super Powers, which has led to volatile international markets. Uncertainty in Trade conditions and Brexit have ampliﬁed this situation. Most asset managers believe this volatility will continue into 2019
Within Jurgens Group, our staff are constantly keeping themselves informed and up to date in their area of expertise. We believe that the personal value of dealing with a Financial Advisor should not be underestimated – our commitment to you is not only concerning your investment returns, it is also about ensuring all-inclusive, guided, ﬁnancial stability.
- Ensuring your Will and Estate planning are current.
- Behavioural management – preventing spontaneous ﬁnancial decisions.
- Appropriate risk management.
- Maximising tax efﬁciency
On this note, I thank you all for your continued support and wish you and your families a happy and safe Festive Season.
The Enemy Within – Alan Botha
In almost all areas of life whether its dating, marriage, the workplace or taking care of our health we are often our own worst enemies, and the realm of personal ﬁnance is no different. We are undoubtedly all aware that fear and greed drive the markets – for example, bias, greed or overconﬁdence may see investors holding a position for too long, while the fear of loss may cause them to sell at too low a price or exit the market too soon.
In their eagerness to make money (or not lose money), they ignore some of the red ﬂags they would pay attention to if they followed a more analytical approach, and took time to understand their longer-term investment strategies, in line with their risk tolerance and propensity to take on risk.
Increased market volatility leads to emotional responses like fear or jubilation, leading us to make mistakes and acting when we frankly shouldn’t. Many of the decisions we make daily are informed by intuition and we may not always realise this or allow the realisation to inform our behaviour.
Risk is never a one-sided situation. When you avoid one risk, you are accepting another. The media exaggerates the negative news and overemphasizes only certain risks. This lack of perspective drives less informed investors to avoid opportunities that beat inﬂation in favour of investments that lose purchasing power over time like money market investments.
It is perfectly normal for any individual to avoid risks. Any sane and responsible person who worked hard for their money should avoid the risk of losing their capital. But that is only one part of the story. The investor who respects his capital, should also fear the destructive power of inﬂation over time.
Therefore, What’s the biggest threat to achieving ﬁnancial independence? As Tony Robbins suggests in his book titled ”Unshakeable” – It’s our own brains! You can invest in all the right things, minimize fees and taxes and diversify your holdings, BUT, if you fail to master your own psychology, it’s still possible to fall victim to ﬁnancial self-sabotage.
Our brains are wired to avoid pain and to seek pleasure and while these natural instincts are powerful and served us well when we were hunter gatherers, they can be extremely troublesome in making ﬁnancial decisions. We tend to seek conﬁrmation of our own beliefs, our minds love proof as to how clever we are, and this is magniﬁed by social media and unsubstantiated rumours which can run unchecked, if they reinforce our existing points of view.
Another one of the most common and dangerous investment mistakes is to believe that the current trend of the time will continue indeﬁnitely, and recent events tend to carry more weight in our minds when evaluating the odds of something happening in the future. This is the case with many sellers in the market who have been spooked by recent market volatility, instead of riding this period of underperformance out, cognitive biases and emotion has relegated them to the market side lines with no opportunity to make up any losses which may have been incurred.
In the end it comes down to identifying and understanding all the risks you are exposed to. Decide which of those risks you fear most and avoid them. Embrace the productive risks that you get remunerated for over the longer term and devise a strategy to manage and control them. We cannot avoid risk. We can only select certain risks over others and commit to a well devised investment strategy. As Warren Buffett said ”the stock market is a device for transferring money from the impatient to the patient”, we look forward to guiding our clients to achieving superior returns in the medium to longer term considering the opportunities being presented by current market volatility.
Short Term News Update – Greg Brits
As we come to the end of what has been an eventful year, on the weather front, we believe El Nino is on its way again. This inevitably means that we can expect later than usual rainfall and less rain altogether.
So far, we have experienced severe heat with very little sporadic rains – our vegetation showing drought-like signs already. This in itself is rather concerning as potentially, the outbreak of wild ﬁres become a frightening prospect. This said, while writing this article, a sudden and signiﬁcant thunderstorm on the Highveld has already wreaked some havoc, certain areas experiencing sudden ﬂooding, hail and lightning strike damage. This, as you can imagine, creates challenges for the insurance industry.
Ways in which to prepare for events as mentioned above, is to ensure gutters are not blocked, drainage surrounding your property is effective, waterprooﬁng of buildings and rooﬁng in order. Over the holiday season, while on a well-deserved break, a reminder of a few worth- while precautions to put in place:
- Test your burglar alarm.
- Get someone to check on the property if possible and give them a set of keys in case you want them to check on your premises.
- Close water supplies where possible in case a geyser or pipe bursts, to prevent further damage.
- Switch off geyser to save electricity.
Please keep our contact details handy as we do not close over the December period and will have our ofﬁces manned to assist you with claims or queries that could arise.
We thank you for your continued and appreciated support and wish you a blessed Christmas and a happy and successful 2019.
Genevieve le Roux joined Jurgens Group in April 2016 in her role as Bookkeeper and Human Resources administrator. She is married and a proud mother of 4 boys who keep her very busy! For fun, she loves reading and enjoys the outdoors, especially visiting her family’s farm.
QUOTE OF THE DAY
“Christmas is not just a day, an event to be observed and speedily forgotten.
It is a spirit which should permeate every part of our lives.”
FSP Number: 732 and 7980 Reg. No. 2012/138938/07
Tel: (011) 622-2061/2/3 Fax: (011) 616-6673 www.jurgensgroup.co.za