A message from Mark Jurgens
I do hope 2023 has started as well as possible for all of you.
Having recently attended an Investment conference with Shroders Asset Management, their views, like many other asset management companies, is that the future of investments is changing. Ongoing Covid issues; the Ukraine crisis; Global energy requirements and inflation; are causing a regime shift, which is affecting the thought process of asset owners globally.
• Allocation to private assets are increasing. There has been a slightly higher return from this sector over the last decade.
• Exposure to alternative assets including hedge funds, is increasing.
• Labour shortages will persist, driving investment in technology.
• Political tension in a new world will challenge globalisation.
• Central banks will prioritise inflation over growth. The significant increase in interest rates were the cause of the recent Silicon Valley Bank’s demise.
• Fiscal policies are likely to be more active.
• Response to climate change is accelerating and poses a risk for non-conforming companies.
• Traditional allocation to asset classes has changed and will continue to change. Global pension funds are allocating higher percentages offshore, steadily eliminating home bias. An example of this would be the average pension fund in the UK, which over the last decade, has increased their offshore assets by approximately 20%. The view being that better returns can be achieved with global diversification.
The above shifts will change global investment returns in an everchanging world.
As independent advisors, we are well positioned to ensure exposure to new opportunities, as well as offer alternative solutions based on your risk appetite and personal preferences.
Stay well and regards
Mark
Optimism as a Successful Strategy for Long-Term Wealth Creation' from Alan Botha
When it comes to investing, there are many strategies that can be successful in the short term. However, for long-term wealth creation, optimism is one of the most powerful strategies available. This may seem counterintuitive, as many people associate optimism with unrealistic expectations or blind faith. However, in the context of investing, optimism can be a highly rational and effective approach.
To understand why optimism can be a successful strategy for longterm wealth creation, it’s helpful to first define what we mean by optimism. In this context, optimism refers to a positive outlook on the future and a belief that things will generally improve over time. This doesn’t mean that everything will be perfect or that there won’t be challenges along the way. Rather, it means having confidence in the long-term prospects of the economy, the stock market, and human progress in general.
When it comes to investing, many people believe that a conservative approach is the safest and most effective way to build wealth over the long-term. But while it’s true that minimizing risk is important, it’s also essential to embrace optimism as a key strategy for success.
In fact, studies have shown that optimistic investors tend to outperform their more pessimistic counterparts over the long-term. By cultivating a positive outlook and staying focused on long-term goals, investors can ride out short-term fluctuations and capitalize on opportunities for growth.
Here are some ways that optimism can help you build wealth over time:
Optimism helps you stay committed to your long-term goals.
Investing is a long-term game, and it’s easy to become discouraged when market fluctuations cause short-term losses. However, investors who maintain an optimistic outlook are more likely to stay committed to their long-term goals and avoid making rash decisions based on short-term events.
By focusing on the big picture and reminding yourself of your longterm goals, you can maintain the motivation to stick with your investment plan even during periods of market volatility.
Optimism helps you see opportunities where others see only risks.
In investing, there’s always a risk of loss. However, instead of seeing risks as insurmountable obstacles, optimistic investors view them as potential opportunities for growth.
For example, during a market downturn, many investors panic and sell their stocks, assuming that the market will continue to decline. But an optimistic investor might see the same downturn as an opportunity to buy stocks at a lower price, with the expectation that they will eventually rebound in value.
By taking a positive approach to market fluctuations and looking for opportunities where others see only risks, optimistic investors can position themselves for long-term success.
Optimism helps you make better decisions.
When it comes to investing, emotions can be a powerful force. Fear, greed, and other negative emotions can cloud our judgment and lead us to make impulsive decisions that undermine our long-term goals.
Optimistic investors, on the other hand, are more likely to make rational, fact-based decisions that align with their long-term goals. By approaching investing with a clear head and a positive outlook, you can avoid making decisions based on short-term emotions and instead focus on what is best for your long-term wealth creation.
Optimism helps you stay flexible and adaptable.
Markets are constantly changing, and investors who are too rigid in their investment strategies may miss out on opportunities for growth.
Optimistic investors, however, are more likely to stay flexible and adaptable in the face of changing market conditions. By embracing change and viewing it as an opportunity for growth, optimistic investors can position themselves to take advantage of new trends and emerging markets.
Optimism helps you enjoy the journey.
Finally, investing is not just about accumulating wealth—it is also about enjoying the journey. By maintaining an optimistic outlook and focusing on the positive aspects of investing, you can find joy and fulfilment in the process of building long-term wealth.
Ultimately, investing is a long-term game, and a positive, optimistic outlook is a key strategy for success. By staying focused on your long-term goals, looking for opportunities where others see only risks, and approaching investing with a clear head and a flexible mindset, you can position yourself for long-term wealth creation and enjoy the journey along the way.
Short Term News Update from Greg Brits
South Africans will soon be entering our sixteenth year of power cuts or grid constraints, now commonly known as Loadshedding, however, at a vastly increased frequency than back in 2007. Unfortunately, due to the ever-increasing Power Surge claims, Insurance Companies have had no choice but to start capping their liability or simply exclude the cover in certain instances.
Please pay special attention to the below points as the market has and will be shifting due to the ongoing problems at Eskom.
• Many Insurers will be checking that all electrical/electronic appliances have power surge protection at the plug point, along with the power surge protection on your main DB board. Failing to comply may result in the rejection of your claim.
• Spoilage or Fridge and/or freezer contents due to Loadshedding or Grid-Failure is excluded from certain Insurers wordings or endorsements.
• Grid-Failure of the national electricity grid will not be covered.
• Certain Insurers will now charge a premium for power surge cover, whereas before it was a free benefit.
• Where a linked alarm is a requirement, you must ensure that your battery retains its charge during electricity outages. This can be overcome by upgrading to a larger battery or connecting a second battery, or by adding an Inverter or UPS.
Solar Systems – It is vitality important to notify us of the following:
• Solar systems, once installed, are not automatically included on your policy, and hence the need to notify your Insurer.
• There are different ways of insuring your solar system, depending on the cover you choose.
• In certain instances, private households are installing large inverters which need to be noted, and again are not necessarily insured automatically.
• We urge our clients again, to only use accredited solar companies who have extensive experience in this field.
• Remember to insist that the installer confirms that your roof can withstand the extra weight of the solar panels.
• A COC (certificate of compliance) must be issued upon completion of the installation. This also applies to upgrades of an existing solar system if you decide to do so.
Please do not hesitate to contact our office for additional information or advice in this regard.
Staff News
Congratulations to Simone Heyman on achieving her 5 Year Service Award Presented by Alan Botha and Mark Jurgens. We wish Simone many more years as a valued member of the Jurgens Finance team.
Quote of the day
“Past performance increases confidence more than ability.”