As advisors, we’ve always understood the need for proper diversification of our client’s assets, particularly in the global context- it just makes sense technically and practically.
Do the right thing, always
It was around 2011 that we realised that we needed to decrease our local exposure in favour of more global assets in our portfolios. At the time that was an unpopular view in the private wealth corporate environment in which we worked – the JSE was still giving good returns and had recovered well from the 2008/9 global financial crisis.
We were two “outsiders” who were allowed to sit in the middle of some of the best financial brains in the country and we learned a lot about how to conduct business the corporate way which included overt reminders to stay in our own lane. However, over the years, we gradually increased the global exposure of our client portfolios against the tide of local institutions and fund manager’s high-profile advice. Yet asset management companies cannot, by law, render investment advice. Only registered financial advisors can. But –and this applies to almost all asset managers—they often cross the line between generally communicating and giving financial advice. And it’s also true that most investors—by and large— either trust their financial companies or suffer from inertia which prevents them from doing something about the poor returns they have been achieving.
It was a case of having the courage of our convictions and, if we were wrong, our clients would fire us as their advisors- not a small concern! Thing is, that was the differentiator, we work for our clients while about 95% of the financial industry consists of corporates with the media in tow dictating their views to their staff, agents and the public. It was unique and gratifying to be outsiders on the inside for a complete and granular perspective of how the financial system works daily- you either work for the industry or you serve your clients as an independent advisor, oil and water don’t mix…
As our clients, you know that in 2017 I made the move to full independent advisor status with TurnPoint Investments which allowed us to significantly change our portfolios to better serve our client’s needs, while Darryn followed last year.
Looking back at the last three years, it’s striking what a difference it makes when you’re able to focus, laser-like, only on what’s best for your clients; I can’t tell you how many times we’ve had to push back against the local industry as we follow what we believe, and what’s become obvious, is the best for our clients. We strongly believe that global assets are the way forward for SA investors- without foreign capital the JSE is doomed to move sideways or drift further downward. While there was a welcome jump of foreign capital into the JSE in December last year (and possibly also January 2021) is it small compared to the outflow of almost R350bn in the three years since Cyril Ramaphosa became president of SA in 2018.
Since 2015 more than R500bn has flowed out the JSE equity market by foreign investors. What probably saved the rand and the balance of payments was the high yields on SA bonds attracting sufficient inflows to counteract these outflows.
The world is changing in ways we all haven’t experienced before- it’s ever more important that we understand these changes and apply strategies to protect and grow our capital to sustain our futures- that’s the mission you’ve entrusted us to help you with.
Thank you for trusting us, we will always work hard for and with you to keep earning that privilege.
In the News this Week:
- The rand see-sawed throughout the week as markets remained jittery.
- Producer prices were unchanged at 3% y-o-y in December, averaging 2.5% for the year.
- Broad money supply accelerated in December, while private sector credit extension increased slightly.
- The annual trade surplus hit a record high of R270.6 billion in 2020.
- US Federal Open Market Committee left monetary policy unchanged.
- The IMF upwardly revised its growth forecast for most economies on a better-than-expected rebound in second half of 2020.
Please give us a call or email if you need any assistance. Have great weekend!
Kind regards,
Your TurnPoint Team
Vic Hodoul CFP®
Certified Financial Planner®
Cell +27 (0) 79 353 1076 Email vic
Office/Admin Manager: Arlene Schoeman: +27 (0)21 555 1010 Email arlene
TurnPoint Investments
Website: https://turnpoint.co.za
Milnerton Office: 5 Royal Atlantic, Sunset Beach 7441
Cape town Office: Suite 824, The Onyx, 57 Heerengracht Street, Foreshore 8005
Tel +27 (0)21 555 1010 Fax +27 (0)86 589 2738
Individual and Corporate Investment, Retirement, Estate, Risk and Tax Planning Solutions
TurnPoint Investments (Pty) Ltd. Registration Number 2003/020010/07 | Financial Service Provider (FSP licence number 12820) Directors VD Hodoul DL Hodoul