Personal Finance Newsletter - Volume 2016, Issue 421, 2016
Volume 2016, Issue 421, 2016
Adjust your expectations for investment returns...
and some thoughts on "what do I do with my money?" : marketsSource: Personal Finance Newsletter 2016, pp 1 –2 (2016)More Less
THE NUMBER one question I've been asked by acquaintances, friends, and (sometimes) complete strangers since the President's swift firing of Nhlanhla Nene as Minister of Finance (and equally-swift re-appointment of Pravin Gordhan subsequent to that) is: "What do I do with my money?" Actually, it might've been a tie for first place along with "Should I take my money offshore now?" (at whatever point the rand was at, during its wild gyrations in December)...I'm not a certified financial advisor. So I simply cannot offer advice. And the thing is, none- not even the 'best' in the business-can know what's likely to happen this year. Or next. The most we can do is to use some methodology to figure out what's 'over-valued' and 'under-valued', and what prospects over a given time period for a particular market or equity or commodity are 'likely to be'.
Is your financial planner giving you value for money? - what should you be getting for the fee you're paying? : investment insightSource: Personal Finance Newsletter 2016, pp 2 –3 (2016)More Less
THE FINANCIAL advice industry in South Africa has rather a mixed reputation.
There are some outstanding advisors in this country with the skills to have a significant positive impact on their clients' financial well-being. Unfortunately, there are also a number of advisors who don't have their clients' best interests at heart. They are more interested in selling products with handsome commissions than addressing their clients' needs. The difficulty for many South Africans is knowing the difference.
Author Steven JonesSource: Personal Finance Newsletter 2016, pp 3 –4 (2016)More Less
IN THE first part of this article that was published last month, I painted a somewhat bleak picture of car ownership. Yet the vast number of new cars that take to our roads each month is testimony to the love affair that we have with our cars (or is that 'necessary evil'?). Which means that whichever camp you may fall into, and despite the astronomical cost of owning and running a car, you have decided that you still want a car of your own.
Source: Personal Finance Newsletter 2016, pp 5 –6 (2016)More Less
ALTHOUGH A number of them won't be aware of it, many South Africans investing through retirement annuity (RA) products are currently outside of the limits allowed by Regulation 28 of the Pension Funds Act. This is the regulation that sets limits on what percentage of their assets pension products can allocate to different asset classes. As a result of the significant depreciation in the rand towards the end of last year, the value of the offshore portion of many investors' portfolios would have grown well ahead of their domestic holdings. Regulation 28 sets the limit on international assets in a portfolio to 25%, with an additional 5% allowed for assets from Africa outside of South Africa.
Author Kamil MaharajhSource: Personal Finance Newsletter 2016, pp 6 –7 (2016)More Less
THE SOUTH African Listed Property Index (J253), commonly known as the SAPY, currently contains 22 counters with a total market capitalisation of R393 billion (3.8% of the Johannesburg Stock Exchange All Share Index, the ALSI) as at 14 December 2015. It is made up of the various types of listed Real Estate Investment Trusts (REITS) in SA. The sector has seen steady inflows, but has remained at around 4% of the JSE since its inception in March 2002.
Author Inge LamprechtSource: Personal Finance Newsletter 2016, pp 7 –8 (2016)More Less
MULTINATIONAL BEVERAGE and brewing company Anheuser-Busch InBev (AB InBev) listed on the JSE on Friday 15 January 2016 at a market capitalisation of R3.1 trillion. This makes itthe biggest inward locally-listed company by market capitalisation. It opened roughly in line with expectations at a price of R1 938 per share, and closed at R1 944. Shares to the value of R1.1 billion were traded.
Author Warren DickSource: Personal Finance Newsletter 2016, pp 8 –9 (2016)More Less
BY NOW we seem to have a fairly good grip on what has led to the spectacular fall in commodity prices over the course of the last year - it's essentially a supply side problem. A supply side built to cater for the booming China of the 1990s has been paired with a demand side more reminiscent of the 1980s.
Author Michelle ActonSource: Personal Finance Newsletter 2016, pp 10 –11 (2016)More Less
AS THE reforms related to the tax harmonisation of retirement funds is set to become a reality on 1 March 2016 or T-day, as it has become known it is vital that members of pension and provident funds know the implications thereof in order to avoid making hasty (and potentially damaging) decisions. There has been a great deal of uncertainty from fund members as to how they will be impacted. The Q&A that follows aims to assist fund members to understand the latest amendments, and to what extent they are impacted by the changes.
Source: Personal Finance Newsletter 2016, pp 11 –13 (2016)More Less
ELSEWHERE IN in this issue, I suggested that we'd all be wise to temper our return expectations this year. Markets don't go up in a straight line, and after nearly seven years of (mostly) rip-roaring returns, things are stuttering a fair amount. After the first month of trading this year, it's fair to say that there's a lot of nervousness in the air. Already, the 'return of capital, not return on capital' cliché is being rolled out. And investment houses like the UK's RBS (Royal Bank of Scotland) are advising clients to "Sell everything except high quality bonds... In a crowded hall, exit doors are small."
Author Aslam DalviSource: Personal Finance Newsletter 2016, pp 14 –16 (2016)More Less
NASPERS HAS been tremendously successful at building new businesses and investing in new growth opportunities. Its more mature Pay TV and print businesses currently make up the bulk of reported profits and cash flow, and its investment in Tencent, the massive Chinese internet company, today constitutes around 96% of Naspers' market capitalisation. However, we believe that the group's next large earnings contributor will be its rapidly evolving emerging markets online classifieds business that is currently consuming cash and depressing earnings.
Source: Personal Finance Newsletter 2016 (2016)More Less
GENERALLY, IF a South African taxpayer sells shares in a foreign company, they will be hit with Capital Gains Tax (CGT) on any gain realised on that sale. However, SA provides exemptions from this CGT in certain circumstances one of which relates to the sale of foreign shares. Providing taxpayers with tax exempt treatment on disposals of certain foreign shares held by them is common practice globally, and available in many jurisdictions. The primary aim of the exemption is to make the seller's country 'investor friendly' and to avoid double taxation, since the country in which the foreign company being sold may well also seek to tax the gain on sale.