As South African investors we are a community that is a bit fatigued. We have been battered by investment schemes, scams, overzealous directors and investment companies that has failed on a scale that makes Bruce Willis’s Armageddon look like a Disney channel movie. Lets not even mention a government that loves spending money like an x-wife walking around with your “found” credit card.
Those of us that still have a bit of cash are sitting on it like old hens waiting for the eggs to hatch and we are tapping our feet on different hotplates everyday looking for an investment that is sound in a market that is driven more by news media headlines than investment strategies. Property used to be the ultimate and safe inflation buster, but with tenants defaulting and property sales and prices slowing that avenue has turned into an electric avenue and none of us are in the mood to get shocked.
We want to look offshore, but let’s face it, we are a touchy feely nation and struggle to deal with telephone operators millions of miles away. Even more the old safe havens like Europe and America are in an epic battle to save their own economies and are so close to being flushed down the financial toilet only their feet are sticking out.
So were to then? Who can we trust with our hard earned money? I think that anyone that has a simple answer to this is either Nostradamus, Da Vinci or just plain reckless. In a world economy where bank bankruptcy is starting to become as normal as taking a tan on the beach one cannot be blamed for feeling a bit like a headless chicken running all over. There are RSA retail bonds, but let’s not confuse government with optimal spenders and fantastic asset managers. When dead stadiums and defunct para-statels cannot pay back their debts where will the money come from? TAXES? Yes, taxes and don’t we have enough of that already. So where to go?
Where do we go? Diversification is the answer! There is an age old saying: “In any market the bulls make money and the bears make money. It is the pigs that get eaten” Sadly as a nation we tend to invest like pigs. We place our entire investment capital into one product. Last year with Amatenda most of the investors interviewed by Carte Blanche was left destitute by the fact that all their investment capital was gone. With Sharemax we read and hear daily of widows and pensioners that invested all their savings into Sharemax and they are now living in garages and looking at family to support them. We are the pigs and we happily stroll to the abattoir daily to get eaten year after year after year.
So in this simpletons mind we need to, hedge currencies, invest in multiple asset classes and within those asset classes multiple promoters. That way if you get conned by one or two, at least you are not destitute. Be logical and think with a sober mind. Anything offering above normal bank interests has a risk to it, no matter what the promoter says. Let’s take charge of our destiny, lets invest as widely as possible and get our funds as diverse as we can. Lets either be bears or bulls and leave the pigs be.
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