Financial Planners | Private Wealth Managers
Financial Advisory Services
We design and implement First-rate Financial Strategies. The approach undertaken by our highly skilled and experienced Financial Planners includes the structuring of core risk and investment strategies in association with specialised legal and accounting professionals. Through the combination of risk, investment, legal and accounting expertise, we are well positioned to provide comprehensive, tax efficient and legally binding solutions to our clients.
Our financial solutions are underpinned by professional associates specialising in their areas of vocation and who are selected through strict due diligence criteria. Established in 2004, Financial Associates delivers bespoke financial advisory services to:
Individuals • Businesses • Legal Entities
- The Minister of Finance announced amendments to tax and other legislation that may affect investors.
- The recent news on Steinhoff and subsequent slump in share price, that some asset managers own in their unit trust funds...
- Investing offshore allows you to diversify and benefit from a broader universe of investment ideas...
- The recent political events in South Africa has had a profound impact on the market climate.
- A consensus view of the market over the next 12 months
- Returns from passive index funds in the medium term are unlikely to excite.
- PSG portfolio manager HANNES SMUTS advises how you can avoid the risk involved with investing in shares.
- Who the ratings agencies are, how they work and what their ratings mean.
- 1st Quarter 2016 - Currency weakness or weak governance?
- 4th Quarter 2015 - A year to forget or reality?
- 2nd Quarter 2015 - All matters considered - All considerations matter...
- 2nd Quarter 2014 - Interpreting and Filtering, Ratings Downgrade ...
- 1st Quarter 2014 - Taxation laws which will affect your planning...
- Wealth Management for Future Generations...
- 2nd Quarter 2013 - Budget Tax Proposals – Relating to Financial Planning...
- 3rd Quarter 2012 - Investment Performance – Financial Associates...
- 2nd Quarter 2012 - Government Pension Reform, management of assets purchased...
- 1st Quarter 2012 - Retirement Matters, will you have enough money to retire?
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Dear Client
Several investors have experienced uncertainty and anxiety since the equity market correction in late 2017. Some feel let down by growth investments and believe adjusting their investment portfolios may be the answer to finding peace of mind. This is understandable. The graph below reflects the surge in the JSE All Share Index (JSE ALSI) since the latter part of 2016, prior to the decline of about 10% from the ALSI’s recent high.
The major US indices reflect similar corrections following recurring record highs. Investors’ enthusiasm contributed towards equities being overvalued. When market participants realised this, a short-term sell-off was triggered including top shares.
Heavyweights such as Naspers, Sasol, Richemont and British American Tobacco also suffered substantial share price declines. Are drastic measures necessary, and if so, what is the appropriate way to address this? Calm reflection is essential, instead of being carried away by relatively short-term events triggering an emotional response.
Successful investors who have experienced and survived numerous investment cycles achieve investment success by following a disciplined process, including:
- exercising patience – i.e. not constantly moving in and out of the market and/or unit trust investments purely based on disappointing short-term performance
- taking a long-term view on investment performance, which will provide peace of mind
- following a well-thought-through investment plan based on meaningful risk diversification (i.e. the appropriate mix of asset classes and stock selections) and a clear understanding of needs, and consistent investment management in line with the plan
- sticking to your investment plan through down cycles in the market, if your circumstances don’t change drastically
- focusing on the shares of quality companies and unit trusts managed by quality asset managers
- acknowledging that market cycles exist and that quality companies may also feel the pinch when trading conditions and sentiment deteriorate; however, in most cases they do have top managers and sound business acumen and experience to keep long-term success and survival within their reach
- using reliable investment research and decision-making data
- consistently keeping in touch with your investment manager and trusting the quality of this relationship and the advice given
We would like to assure you that we do understand if you feel anxious about the uncertainties. Our professional expertise lies in the design and implementation of your investment plan. The advice we offer is underpinned by global investment insights and experience. We are always committed to your interests. So we would like to urge you to partner with us in taking a calm approach to your investment interests, to put your mind at rest.
Let us address the challenges of these uncertain times together.
Kind regardsHannes and team
PSG Hermanus Portfolio Management and Stockbroking
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Beste Kliënt
Daar heers onsekerheid en onrustigheid by etlike beleggers oor die korreksie op die aandelemark sedert laat 2017. Sommige meen dat eibeleggings hulle in die steek laat en dat gemoedsrus gesoek moet word deur beleggingsportefeuljes daadwerklik aan te pas. Dis verstaanbaar. Die onderstaande grafiek toon dat die JSE-indeks van alle aandele (JSE ALSI) sedert laat 2016 skerp gestyg het, voor die daling van ongeveer 10% sedert die ALSI se onlangse hoogtepunt.
Die VSA se belangrikste aandeelprysindekse toon soortgelyke korreksies nadat rekordhoogtepunte herhaaldelik bereik is. Beleggers se geesdrif het daartoe bygedra dat aandelewaardasies te hoog gedryf is. Toe markdeelnemers dit besef, het dit gelei tot sterk verkoopaksie oor die kort termyn, ook van topklas aandele.Toonaangewende aandele soos Naspers, Sasol, Richemont en British American Tobacco het oor hierdie termyn wesenlike prysdalings getoon. Is drastiese optrede nodig en, indien wel, wat is die aangewese benadering? Dis noodsaaklik om rustig te besin eerder as om toe te laat dat betreklik kortstondige gebeure gemoedsrus versteur en emosionele aksie veroorsaak.
Suksesvolle beleggers wat talle beleggingsiklusse beleef en oorleef het, behaal beleggingsukses deur harde dissipline toe te pas. Dit sluit die volgende in:
- toon geduld, d.w.s. moenie kort-kort in en uit die mark en/of effektetrustbeleggings skuif suiwer op grond van teleurstellende korttermynprestasie nie
- beoordeel beleggingsprestasie oor die lang termyn; dit verskaf beleggingsgemoedsrus
- volg ’n deeglik voorbereide beleggingsplan, gegrond op sinvolle risikodiversifikasie (d.w.s. die gepaste mengsel van bateklasse en aandelekeuses), met duidelikheid oor behoeftes en bestendige beleggingsbestuur in ooreenstemming met die plan
- hou by u beleggingsplan indien u situasie nie drasties verander nie, al betree die beleggingsiklus daalfases
- fokus op gehaltemaatskappye se aandele en kwaliteitbatebestuurders se effektetrusts
- erken en aanvaar dat marksiklusse bestaan en dat gehaltemaatskappye se benadering ook negatief geraak kan word wanneer saketoestande knyp en sentiment verswak; hulle beskik egter meestal oor topgehalte bestuur, sterk balansstate en goeie sakevernuf en - ondervinding wat langtermynsukses en -oorlewing binne hulle bereik hou
- gebruik betroubare beleggingsnavorsing en besluitnemingsinligting
- behou noue, deurlopende kontak met u beleggingsbestuurder en volle vertroue in die gehalte van hierdie verhouding en die advies wat gegee word
Ons verseker u graag van ons begrip wanneer onsekerhede u pla. Ons grootste professionele vernuf is vervat in die opstel en implementering van u beleggingsplan. Die advies wat ons aanbied, word deur globale beleggingsinsigte en - ondervinding onderskryf. Ons is deurgaans toegewy aan u belange. Ons moedig u aan om rustig saam met ons oor u beleggingsbelange te besin en daardeur gemoedsrus te kry.
Laat ons die uitdagings van hierdie onsekere tye saam aanpak.
Vriendelike groeteHannes en span
PSG Hermanus Portefeuljebestuur en Aandelemakelary
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Common Factors which influence our investment behaviour determines your wealth over the long term.
Last year the JSE returned 21%. The first quarter ending 31 March of this year saw a downward market movement of -6%. Since the end of March to now the market has regained the 6% and is at the levels of the beginning of the year. However, after the first quarterly statements were sent out there were numerous investors very concerned about the movement on their portfolios.
As humans we tend to react either to fear or greed. Fear would have been the obvious emotion at the end of the quarter, with many people wanting to move into more cautious investments. By doing this your portfolio moves from volatility to an actual paper loss. Similarly, taking long term investments and trying to make up, that which is only volatility, on getting quick rich schemes is by all extensions no different than going to the casino. There is no certainty.
Market history does however provide us with a degree of certainty. The underlying Graph provides clarity on several certain factors.
GRAPH EXPLANATION
Point 1 on the X axis indicates the best return achieved over a one-year period in blue and the worst return over a one-year period in Grey.
Point 2 on the X axis indicates the best average return achieved over any two-year rolling period in blue and the worst average return over any two-year rolling period in Grey.
Point 3 on the X axis indicates the best average return achieved over any three-year rolling period in blue and the worst average return over any three-year rolling period in Grey.
And so forth…
The orange line depicts the actual annual return per annum in each specific year over the last 20 years.
WHAT DO WE UNDERSTAND FROM THE THIS GRAPH
- Over the past 20 years you can over any 1 year have an upside of 60% or a downside of -25%
- Over the past 20 years in any 2-year rolling period you can have an average upside of 55% or an average downside of -15%
- Extrapolate this further and over the past 20 years in any 5-year rolling period you can have an average upside of 42% or an average downside of -8%
- Extrapolate this further and over the past 20 years in any 10-year rolling period you can have an average upside of 32% or average return of 0%
- Extrapolate this further and over the past 20 years in any 15-year rolling period you can have an average upside of 26% or a lower average return of 7%
- And over the past 20 years the JSE has delivered an average upside of 15.83%
WHAT IS THE MORAL OF THE GRAPH?
- Over the past 20 years in any rolling 10-year period the market has never lost any money.
- In fact, if you take the last 40 years no one has ever lost money over any 7 year rolling period.
- The JSE has always delivered between 13% and 17% over any 20 Year rolling period.
INVESTMENT INSIGHT
- Investments are long term in nature.
- Short term volatility is just that, it is the very nature of long term investing.
- Capitalising volatility losses based on fear creates real losses.
- 1 quarters performance is very insignificant over a long period.
- Markets always revert to fair value.
- There is no way of getting rich quickly in the markets or schemes unless you speculate with high risk assets whereby you could also lose all your money.
- Know the risks that you are able to tolerate and allow for experts to diversify your portfolio accordingly. This will allow you to manage the amount of uncertainty you are willing accept. Then stick to your chosen strategy.
- Lastly, it has been proven by many statisticians and actuaries that time in the markets is more important than timing the markets.
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