Financial Topics for Review, Discussion & Comment in the Blog

Beyond the Point of No Return

  11/25/12 11:06, by Len, Categories: Announcements, Debt Management, Money Markets, Change Management, Economics Commentary, Financial Markets

Source - Article by Cees Bruggemans - 18th November 2012

Profile: Cees Bruggemans is Chief Economist of First National Bank.

Summary:

The European crisis isn’t some distant thing passing us by. Our senior policymakers continue to consider it with great suspicion, fearful of a sudden turn for the worse, with the resulting financial market turbulence and the region shifting much deeper into recession reverberating also loudly in our markets and economy (Rand, inflation, growth, jobs, interest rates, stock and bond markets). Such caution is understandable, given deep global market skepticism about the entire European project, the many euro-skeptics everywhere and the often only slim electoral majorities in crucial countries sticking with the chosen course of action. It may be, however, that the Eurozone this year has passed a critical point of no return in its existential crisis, with no easy way back and the only sane alternative a matter of carrying on and bringing things to (some kind of) successful ending.

This crucial point of no return concerns the costs of breaking up (even if “only” jettisoning Greece) as compared with going on. For apparently we are talking of a cost equivalent to a very large percentage of German GDP in the event of failure, in which case continuation is seen as the lesser evil by far (even if it will still costs “some” money). There was always a sense these past three years that especially the Germanic countries were inclined to hide from their electorates the full extent of losses already incurred and the cost of loans and guarantees granted while wanting to prevent their weakly placed banks, insurers and pension funds from being abruptly confronted by the massive cost of country (and even bank) default (in turn activating the taxpayer bills).

For long it seemed that the preferred choice was to delay the moment of truth when these things needed addressing, buying crucial time, allowing the weakest institutions time to take remedial action and gradually adjust their portfolios or absorb write-offs after which presumably some kind of “orderly” workout, including exiting, might be conceivable.

 

Read the full article here

Your Guide to Debt Management

  06/24/12 12:58, by Len, Categories: Announcements, Personal Financial Management, Debt Management, Stress

Source - Debt Management Guide by by justmoney.co.za

Many South Africans [read "People"] are falling deeper into debt especially with the economic decline, interest rate hikes and increases in petrol, electricity and food costs. Such increases have outpaced salary increases and are increasing the pressure.
No individual should be paying no more than 35% of their monthly income on repayments. However on average, the figure for repayments is sitting at 48% of one's monthly income. If you spend more than 50% per month you are in serious trouble.
Financial stress not only affects your financial well-being but also reduces productivity and may be a cause of serious stress related health problems. Creditors and debtors who pursue relentlessly can be extremely stressful not to mention harsh, and people are dealing with them directly.
We all make mistakes, and financial mistakes are definitely not exempt from human error. Main mistakes include the option of taking out a loan to pay back debt as this only increase the amount owed in the long run.
People have three to five credit cards, are only paying back the minimum and are therefore accumulating large debts. Most people do not have a budget and financial hardships are not being monitored.
There is, however, help to be found. You might have heard about debt management but you have no idea where to start or whether this is the option for you. If your monthly debt repayments exceeds your monthly income or you are left with very little monthly income after you have repaid all your debts, debt management might be for you.

Here are the ten steps to debt management:

Full story »

Budgeting When You are Broke

  06/24/12 12:50, by Len, Categories: Personal Financial Management, Budgeting, Cash Flow Management, Debt Management, Stress

Source - News Item by justmoney.co.za

If you find yourself cash-strapped and struggling to make ends meet, it’s likely that your budget (or lack thereof) doesn’t reflect your earnings. Budgeting can prevent getting kicked out of your house, increased debt as well as ruining your credit profile.

It’s never too late to start working towards your financial goals, so why not start with these Budget Tips for the Broke to make life a little bit less stressful?

Full story »

Five Top Tax Return Tips

  06/24/12 12:40, by Len, Categories: Announcements, Personal Financial Management, Tax Optimisation, Risk Management, Stress

Source - News Item by justmoney.co.za

Next month will see the start of the new tax season, which runs from the 1 July till the 30th November, covering 1 March 2011 to 29 February 2012. Filing your tax return is a cumbersome exercise but there are a few strategies you can adopt to reduce the stress of this chore:

Full story »

The Misnomer Called Crisis Fighting

  06/24/12 12:29, by Len, Categories: Announcements, Money Markets, Risk Management, Economics Commentary

Source - Article by Cees Bruggemans - 19th June 2012

Profile: Cees Bruggemans is Chief Economist of First National Bank.

Summary:

As yet another hysterical headline swam into view (“European leaders heading to G20 summit face mounting pressures to resolve sovereign debt crisis”), it suddenly struck me that what masquerades as ‘crisis fighting’ isn’t really crisis fighting at all. Stonewall Jackson got his name for a reason. The delightful blighter didn’t fight, he stonewalled. So tell me differently about Europe. I spoke to a citizen of Athens on Monday. Wanted to know how he was feeling on the day after The Weekend. No, he was feeling wonderful. Now the country was finally pointed in the right direction. But someone had to tell the Germans that a country that has so far lost 20% of its GDP, and where ordinary folk previously earning the equivalent of R15000 a month now had to frequent soup kitchens, was clearly doing everything to please its creditors. And yet the creditors didn’t want to see reason. It could always be better. Which, granted, was true enough.

But why expect something that should take 40 years to take four years or less? Certain things can’t be done overnight. The Germans themselves took 20 years recovering from WW2 (physically that is) and took another 20 years recovering from the collapse of communism and the re-unification with East Germany. How could they possibly expect an easy-going enterprise like Greece to suddenly reinvent itself?

It is a question that has bothered me for some time.

Read the full article here

The League of the Willing Like-Minded

  06/24/12 11:59, by Len, Categories: Economics Commentary, Financial Markets, Financial Articles

Source - Article by Cees Bruggemans - 17th June 2012

Profile: Cees Bruggemans is Chief Economist of First National Bank.

Summary:

It has been a fantastic tale, the getting together, the eventual blow-up and the post-crisis world everyone is working towards. Not unlike everyday romances, divorces and post-everything bliss. It may sound like a Greek wedding, but it is more like a Germanic Opera, with a lot of yodeling drowning out all secondary noise, though one can faintly hear groans from the slave quarters and Greek tableware being thrashed. This odd romance called modern Europe has been thoroughly facebooked by now (Kohl and Mitterrand publicly holding hands and everything that followed). The wedding was also much covered (the announcement of Union, creation of the ECB and introduction of the Euro) and the post-nuptial happiness has been very intensely reported (a decade-long boom for some). How every bank and capital market participant suddenly thought peripherals to be the equivalent of German-quality risk overnight, pouring in money by the trill (not only figuratively), with easy money funding property, banking and welfare bubbles aplenty even as societal composition (the peripheral genes), higher inflation and less ability to generate productivity ensured a steady loss of trade competitiveness. With national and/or private debts out of control, all it needed was a big shock to have reality intrude. This the Anglo-Saxons did via a banking crisis and the Greatest Recession since the Depression. We also know by now what happened after this shock had detonated peripheral public debts beyond the pale.

There was no easy way back.

Read the full article here

Grahan le Sar - Life & Personal Coach

  06/24/12 11:34, by Len, Categories: Announcements, Health, Happiness, Change Management

Profile: Graham Le Sar

You will find his Bolg Articles  here and his Journal Entries here.

Graham Le Sar is a Change Facilitator, Speaker, Author, and Life & Business Coach. He has a collective span of 25 years in the Life-Solutions field. He has successfully made a difference in the lives of hundreds of people through teaching, workshops, seminars and personal & group Coaching interventions by applying his groundbreaking work helping people to work through their issues of helplessness, hopelessness and powerlessness.  Featured on SAFM’s Design for Life with Douglas Kruger, 702 with Tim Modise, David O’Sullivan and Leigh Bennie, SAFM with Tracy Going and Nancy Richardson, Entrepreneur and Channel Islam, as well as and appearing in YOU Magazine; Odyssey; Essentials; Fair Lady; Rooi Rose and the Star Workplace, Readers Digest, Get-It Magazine.

He is distinguished by over 20 years experience in diverse fields including banking, life assurance, training and development, training management, sales, sales management, franchising, recruitment and various entrepreneurial enterprises focusing primarily on empowering people.  Promoted to National Training Manager with a major Life Assurance company, aged just 26, Graham has been involved in intensive ongoing research in the field of Human potential and behavior exploring what makes successful people successful. He has consulted with experts in the fields of Clinical Psychology, Education, Quantum Physics, Hypnotherapy, NLP, Neuro Semantics and Alternative Healing as well as experts in Dynamic Asymmetry of the Brain.

Five Tests [On Economics]

  09/22/10 09:58, by Len, Categories: Financial Markets, Financial Articles

Source - Article by Cees Bruggemans - 21st September 2010

Profile: Cees Bruggemans is Chief Economist of First National Bank.

Summary:
Gordon Brown, remember him?
Tony’s biography “Tony Blair – A Journey” brought Gordon also briefly back to life, but unlikely for long. Still, Gordon sticks in the mind for his ‘Five Tests’, also mentioned in the probably unauthorized and terrible repetitive biography by Tom Bower “Gordon Brown – Prime minister”. Gordon in the end did not want Britain to join the Euro, at least not under Tony’s leadership, and in short order invented ‘Five Tests’ that the Euro had to satisfy in order for Great Britain to join the lowly continent.

These were:

• are business cycles and economic structures compatible so that the UK and others could live comfortably with Euro interest rates on a permanent basis?

• If problems emerge is there sufficient flexibility to deal with them?

• Would joining EMU create better conditions for firms making long-term decisions to invest in Britain?

• What impact would entry into EMU have on the competitive position of the UK’s financial services industry, particularly the City’s wholesale markets?

• In summary, will joining EMU promote higher growth, stability and a lasting increase in jobs?

By 2006 Gordon triumphantly claimed that four tests had been met, yet there was no joining yet (good thing, too, knowing what came next). One imagines General De Gaulle turning in his grave, another forgettable minor historic detail. Even so, by not joining EMU and be subjected to its rigour, Britain opted to be subjected to Gordon. Whereas Europe has discovered the joys of Euro stress, Britain has of late discovered the full cost of having had Gordon during a very sensitive period in its national life. Anyway, one recent sunny Sunday morning Tony’s blurb reminded me of Gordon and his Five Tests. In short order I could think of my own Five Tests, but on a slightly larger canvas than Gordon’s.

The Question begging to be satisfied: Is the world about to descent into a depression-cum-deflationary hell? Not on your Nellie, but how to prove that?

This is where the Five Tests come in. Not particularly scientific, but neither were Gordon’s and everyone religiously believed him, so why not mine, too?

Read the full Article here.

RSA: The Consumer Comeback Accelerates

  09/15/10 03:48, by Len, Categories: Financial Management, Financial Markets, Financial Articles

Source - Article by Cees Bruggemans

Profile: Cees Bruggemans is Chief Economist of First National Bank.

Summary:
During the Asian Contagion crisis of 1998, the SARB got ambushed and with it our financial system. We literally would take years recovering from the experience. South African consumers took five years, from mid-1999 to mid-2004, to recover from the shocks, going by subdued consumer confidence and modest real spending data. It was the shock of 1998’s prime interest rate of 25.5%, followed shortly in 2001 by a halving of the Rand (by now the feared harbinger of a prime 25% shock), and then the aftershock of another 4% interest rate tightening during 2002, that left South African consumers bomb shocked and feeling out of their skulls.

Throughout these five years the FNB/BER consumer confidence index lingered below breakeven (the 50/50 nil line), meaning a small majority of consumers expressed lack of confidence. For long there lingered a general moroseness and fear of new shocks. Understandably so. Anybody having experienced prime 25% or halving of the Rand and the fears this engenders won’t easily forget it. GDP growth during this five year period averaged only just over 3%. Consumers also advanced but not at an exceptional pace. It remained for long a time to be cautious and timid. Business investment also dragged.

Read the full Article here.

RSA: The Anomalous Business Upswing

  09/15/10 03:22, by Len, Categories: Announcements, Personal Financial Management, Economics Commentary, Financial Markets, Financial Articles

Source - Article by Cees Bruggemans

Profile: Cees Bruggemans is Chief Economist of First National Bank.

Summary:
We are told things are ‘unusually uncertain’. That certainly applies to some countries, and to some sectors. But how unusually uncertain is South Africa’s new business upswing really? Is there reason for worry? And what policy action may we still expect, if any? No two business cycles are ever quite the same. Their upswings, peaks, downswings and troughs all differ, mostly minutely but sometimes more than average, in length, amplitude and rate of change. Any deviations from the known ‘norm’ are mostly nothing major. But given all this talk about our recent recession, its abruptness and depth, and an upswing that feels fragile and mediocre, is there reason for concern that times remain unusually unsettled?

I detect at least six anomalies in the current upswing, not all of which may be recognized as such. It leads to conflicting implications. The overall impression is one of ‘normalcy’ (itself apparently a surprise), with some sector upside bias and some sector downside bias, with if anything the downside bias risking being overwhelmed by upside events.

Anomaly One: Overall RSA business cycle remains ‘normal’
Anomaly Two: Manufacturing is having a normal cycle.
Anomaly Three: Motor Trade off the charts
Anomaly Four: Prolonged building slump
Anomaly Five: Credit gone crazy and now shaking out
Anomaly Six: Retail surprises with its vitality

Read the full Article here.

How Scary Are Municipal Finances?

  08/23/10 09:31, by Len, Categories: Investment Management, Risk Management

Articles by Miriam Sjoblom in Morningstar Fund Spy

About the Author:
Miriam Sjoblom is an associate director of fund analysis at Morningstar.

Summary:
"Not as scary as you think, but scary enough to be picky. There's more to muni-credit research than scanning the morning paper. The argument for keeping your muni exposure broadly diversified and outsourcing the bond-specific research has never been stronger. And when it comes to choosing funds, it still pays to do your homework."

You don't have to look hard to find a reason to worry about municipal finances these days. Reports of a looming day of reckoning in the municipal-bond market from a wide array of commentators are ubiquitous. Former Los Angeles mayor Richard Riordan took to the Wall Street Journal's editorial pages to predict that the country's second-largest city would declare bankruptcy before 2014. Testifying before the Financial Crisis Inquiry Commission in June, Warren Buffett sounded alarms about the "terrible" financial distress facing many state and local governments in coming years. Buffett's muni insurer, Berkshire Hathaway Assurance Corp., has scaled back its activity substantially, guaranteeing only $40 million worth of muni bonds in 2009 compared with nearly $600 million the year before.

Given the severity of the Great Recession compared with prior downturns and the tenuous nature of the recovery, there's little comfort in the argument that muni defaults will remain rare just because they always have. But even though state and local governments continue to struggle through the worst economic climate in decades, many of the specific concerns getting attention in the media appear overblown. Some of the worst news stories involve isolated municipalities that made reckless moves well before the downturn, and many muni researchers can and did anticipate their troubles in advance.

Read the whole article here.

How Expense Ratios and Star Ratings Predict Success

  08/23/10 08:26, by Len, Categories: Personal Financial Management, Investment Management, Retirement Planning, Money Markets, Risk Management, Property Investment

Articles by Russel Kinnel in Morningstar Fund Spy

About the Author:
Russel Kinnel is Morningstar's director of mutual fund research. He is also the editor of Morningstar FundInvestor, a monthly newsletter dedicated to helping investors pick great mutual funds, build winning portfolios, and monitor their funds for greater gains.

Summary:
We test the ability of expense ratios and star ratings to predict funds that will survive and beat their peers. We've run some fresh data on expense ratios and the Morningstar Rating for funds.

I'll share the details on who, what, and when, but first a few grabbers. How often did it pay to heed expense ratios? Every time. How often did it pay to heed the star rating? Most of the time, with a few exceptions. How often did the star rating beat expenses as a predictor? Slightly less than half the time, taking into account funds that expired during the time period.

In examining the expense ratios and star ratings, I settled on three key measures that, to me, are closest to investors' bottom lines and help cut through all of the clutter.

Success Ratio:
While total returns are nice, they are not the whole story. Mutual fund companies kill off their funds at a rapid rate--thus, sweeping mistakes under the rug. However, your losses are just as real if your fund is liquidated. If there's a destruction bias for a data point, then you want to factor that in. The success ratio tells you what percentage of funds in a given group survived and outperformed their peers. After all, that's what success really is. Anything short is a failure; yet too often, investors and the press act as though total returns are the same thing as the success ratio. This is the strongest of the three measures because it is not affected by survivorship bias.

Total Returns:
Everyone wants to know how any measure works at predicting total returns. Because equal proportions of each category are given 5 stars and 1 star, one can safely sum up returns across categories to see how the measure has done for an asset class as a whole.

Subsequent Star Ratings:
The star rating is a measure of risk- and load-adjusted returns, so naturally I want to know whether the star rating is able to predict future risk- and load-adjusted returns. Investors have long handled lower-risk funds better than higher-risk funds because lower-risk funds don't trigger strong feelings of fear or greed. Thus, lower-risk funds with slightly lower official returns actually led to better results for investors than high-risk, high-return funds.

How Expense Ratios Performed:
If there's anything in the whole world of mutual funds that you can take to the bank, it's that expense ratios help you make a better decision. In every single time period and data point tested, low-cost funds beat high-cost funds. To see the results, click here.

Expense ratios are strong predictors of performance. In every asset class over every time period, the cheapest quintile produced higher total returns than the most expensive quintile.

Read the whole article here.

Read the RSA take on this research by Mike Brown, Managing Director, etfSA.co.za

Save Now for a Secure Future

  08/23/10 07:32, by Len, Categories: Budgeting, Retirement Planning, Saving

Source: Article by Gareth Stokes writing in the Mail & Guardian-online

Summary:
There are three contributors to national savings: households, companies and the government, but each saves for different reasons. Households save to meet future expenses and for retirement, companies save after-tax profit for future expansion and the government needs surplus funds to meet its social and infrastructure commitments.

If we save too little as a nation we seriously undermine our ability to invest in infrastructure, such as roads, bridges, ports and power stations -- the assets essential for long-term gross domestic product (GDP) growth. Right now South Africa Inc is struggling to maintain a gross savings-to-GDP ratio of just 15,4% and households, which are included in that figure, are guilty of not saving.

If South Africa hopes to return to the savings and investment boom of the late 1960s and early 1970s, it has to encourage individuals to save. To this end, several organisations and companies in the domestic financial services industry dedicated last month to instilling a savings culture. The aim of National Savings Month was to educate individuals about the importance of saving and to encourage households to provide adequately for both short-term emergencies and long-term ­retirement needs.

Read the whole article here.

Another article written by Evan Pickworth in iafrica.com on the same matter can be found here.

Why More Women are in Debt Counselling

  08/10/10 08:41, by Len, Categories: Budgeting, Debt Management

Source: Article by Maya Fisher-French writing in the Mail & Guardian's Smart Blogs

Debt counseling figures show that more women are in debt counseling than men.

Summary:
Many would use this statistic to "prove", that women spend too much on handbags and shoes and that women are "not good" with money. However, what the debt counselors tell us is that women come for financial help far sooner than men. So if a man and woman were both in the same financial situation, the woman would be more likely to be in debt counseling. This also means that she is more likely to be financially rehabilitated than the man.
This raises the far more important issue that women remain financially more vulnerable than men, with 65% of men earning more than women, according to the 2009 Careers24 Salary Survey.

It is the role of women as mothers that makes us so financially vulnerable.

While figures are not available at this stage, anecdotally it would seem that many women in debt counseling are single mothers. Not only do they have the financial responsibility of raising their children, but they usually opt for lower paid jobs that provide more flexibility in order to raise their children. Women are left significantly worse off after a divorce, mostly due to the fact that her future income is far more limited than her ex-husband's, either because was limited when she took time off work to have children or simply because women do not earn as much as men.

Read the full article here

Managing Client Greed

  08/03/10 14:50, by Len, Categories: Announcements, Financial Management, Risk Management

Source: Articles by Graham Earle of BDO Spencer Steward

Client Greed:
Something that cannot be regulated or controlled, but rather has to be strategically and proactively managed on an ongoing basis. Graham Earle, tax director: BDO Spencer Steward (KZN) Inc. maintains that client expectations need to be kept realistic and focused from the outset. If financial advisers fail to take this approach they stand the risk of eroding a client's capital base – and losing all professional credibility…

As South Africa's market becomes more bearish we're seeing a marked increase in client interest when it comes to investments being made on their behalf. Improved availability of information regarding investment options – ranging from “advice” to direct product selling– has resulted in consumers becoming more aware of their options and the likely returns on their investments.

Full story »

Buy-to-let market hits all-time low in South Africa

  07/20/10 08:35, by Len, Categories: Property Investment

News Item by justmoney.co.za

The buy-to-let market took another huge dip in the second quarter (Q2) of 2010 but, according to property experts at FNB, it's not all bad news.

FNB's latest Buy-to-Let Survey, only seven percent of buyers are buying to let - down from the nine percent in the previous quarter.

Full story »

The secret behind why the rich get richer... and how YOU can too? Part 3

  07/06/10 10:22, by Len, Categories: Financial Management, Personal Financial Management, Investment Management, Retirement Planning, Risk Management, Saving, Happiness

Article by Gary Wilde: CEO Wilde Insights™ in Credit Health

This is the last in a 3-part article written by Gary Wilde - behavioural specialist and turnaround expert. Enjoy.

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About the Author: Gary is renowned for his ability to get to the root of problems and produce exceptional results through his unorthodox approach to business and personal challenges. He is a Corporate Turnaround Specialist and Behavioural Adaptation Strategist. Gary is also a certified NLP Coach, a practitioner in Timeline™ Paradigm Techniques and Ericksonian Hypnotherapy as well as a Demartini Method Facilitator. More of his articles can be found here.

The purpose of this series of articles is to reveal the secrets behind why the rich get richer and in doing so, reveal how anybody can achieve a status of financial independence or wealth, by adopting appropriate and empowering thinking and behavioural habits.

In today's article, I will reveal the single most powerful secret behind why the rich get richer, the poor get poorer and the middle class get deeper into debt! However, before I do that, let me summarise some of the powerful and life changing insights that were shared in Parts 1 & 2 of this article:

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The secret behind why the rich get richer... and how YOU can too? Part 2

  07/06/10 10:17, by Len, Categories: Announcements, Financial Management, Personal Financial Management, Investment Management, Retirement Planning, Risk Management, Saving, Happiness

Article by Gary Wilde: CEO Wilde Insights™ in Credit Health

This month’s newsletter is the second in a 3-part article written by Gary Wilde - behavioural specialist and turnaround expert. Enjoy.

>

About the Author: Gary is renowned for his ability to get to the root of problems and produce exceptional results through his unorthodox approach to business and personal challenges. He is a Corporate Turnaround Specialist and Behavioural Adaptation Strategist. Gary is also a certified NLP Coach, a practitioner in Timeline™ Paradigm Techniques and Ericksonian Hypnotherapy as well as a Demartini Method Facilitator. More of his articles can be found here.

"In Part 1 of this article, I shared one of the key reasons as to why the rich get richer, the poor get poorer and the middle class get deeper into debt; Wherever you are in life at this very moment... however much wealth or debt you have accumulated, is a direct result of the thoughts and actions you’ve chosen throughout your life! The key here of course is choice and when we TRULY take responsibility for the fact that it is our choices and actions that have led to our successes and disappointments, we begin to realise just how much power we have to shape our future.

To many this may sound bizarre, but being rich, poor or middle class isn’t a blessing or curse, each is in fact a skill that is mastered over time. A rich person that hasn’t experienced poverty will not have developed the skills to survive in the world of the poor. All they know is how to be rich and how to survive and thrive in the world of the rich. For this reason, it is quite common for the rich who have lost all their wealth, to soon find themselves back in the money. Donald Trump is a great example of this, as are the many millionaires who have been bankrupt once or many times and quickly bounced back.

By the same token, someone that is poor or middle class has not developed the skills to survive and thrive in the world of the rich, which is why 75% of lottery winners loose all their winnings within three years... ending up back where they started or slightly better off, at best. Once again this gives credence to Aristotle’s assertion that success [or failure, or mediocrity] is a habit. So where does this leave the poor or middle class people that really want to improve their financial status? Are they doomed to their respective prisons of scarcity or debt, or is there a way to defy the trend and become the exception to the rule? Yes, of course there is, but... and this is a big, hairy and audacious BUT... are they willing to do what it takes?

The rich think, make decisions and act very differently to the middle class, as do the middle class when compared to the poor. Anyone that wants to elevate their financial status to the next tier can only do so if they are willing to make these critical changes. Below are a few examples of the differences identified between the habitual thoughts, decisions and actions of the rich and middle class:

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The secret behind why the rich get richer... and how YOU can too? Part 1

  07/06/10 10:09, by Len, Categories: Announcements, Financial Management, Personal Financial Management, Investment Management, Retirement Planning, Happiness

Article by Gary Wilde: CEO Wilde Insights™ in Credit Health

This month’s newsletter is the first in a 3-part article written by Gary Wilde - behavioural specialist and turnaround expert. Enjoy.

>

About the Author: Gary is renowned for his ability to get to the root of problems and produce exceptional results through his unorthodox approach to business and personal challenges. He is a Corporate Turnaround Specialist and Behavioural Adaptation Strategist. Gary is also a certified NLP Coach, a practitioner in Timeline™ Paradigm Techniques and Ericksonian Hypnotherapy as well as a Demartini Method Facilitator. More of his articles can be found here.

“The rich get richer and the poor get poorer” is a proverb that is frequently at the centre of debates regarding economic inequality. It remains as relevant today as it did hundreds of years ago, because as far as verifiable social trends go, the statement is fairly accurate! However, since the proverb predates the emergence of the ‘middle class’, I believe a slight revision is in order. Therefore, I’ve taken the liberty to tag on a small 21st century adjustment to make it more relevant to today’s socio-economic trends... “The rich get richer, the poor get poorer and the middle class get deeper into debt.”

Whether you go with the original proverb or my revised version, for those people that are not already in the ‘rich’ category, the message is a rather bleak one that carries a foreboding prophecy of inevitability about their future financial status. The bad news is that for the vast majority of poor and middle class individuals, this shall be their fate... because people have a tendency to perpetuate their patterns, not break them! Will this be your fate, or is there an alternative? Fortunately, there is.

I’ve been observing and researching the mysterious and fascinating field of human behaviour relentlessly since the age of 15. My quest started with three questions:
1. Why do people do the things they do?
2. Can people change their negative patterns of behaviour?
3. If people can change, how exactly do they do that?
It didn’t take long to get an answer to the second question, which of course is, ‘Yes, people can change their negative patterns of behaviour.’ It was the first and third questions that turned into what is and shall always be my lifelong passion. This in turn gave rise to my life’s mission, which is to share all the wonderful insights and secrets discovered on the way, with as many people as will listen. While I shall never profess to have all the answers, after two and a half decades of observation, personal experience and learning from some of the greatest minds in the field, I have accumulated quite a few secrets to share that I think you’ll like... because they can change the course of your life if you apply them!

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The World Is Changing

  07/06/10 09:44, by Len, Categories: Risk Management, Change Management

The World Is Changing

I believe that the globally co-ordinate efforts of central banks have prevented the global economy from sliding into a depression but we are now certainly in a recession.
What has astounded me the most was not how fast this crisis spread around the world but how it has reached every corner of the globe and literally affected every single person on the planet from the world’s wealthiest to the homeless?
I am sure we agree that Change is the only constant in our universe and it has been speeding up as time goes on. In recent years this has largely been driven by innovation in technology and communication. We have experienced greater change in the last ten years that in the last fifty years before that and it is unlikely to slow down any time soon.
If your business is going to survive you will have to regularly challenge your thinking. There is not going to be anywhere near as much credit available in the next five years that we have seen in the last five years. New business models and new ways of generating revenue are constantly being developed in all business sectors.
How would you compete with a competitor who can offer the same or better product or service you do for free and they can still making money? Your competitor can do this because he has found alternative sources of revenue and simply uses a particular service or product to draw clients in.
I would like to share some ideas with you regarding risk management and some of the risks we face going forward. I will also attempt to introduce you to a scenario planning model that will hopefully help you with decision making in your business.

Just Fired? What To Do Next?

  06/22/10 08:46, by Len, Categories: Personal Financial Management, Budgeting, Risk Management, Stress

Source: Article written by Sarah Stebbins of Womens Health

Summary:
Being told to pack up your desk is one of life’s harshest blows. These take-control strategies from some of the country’s top career experts will ensure that the road ahead is a smooth one.

Dealing with it on D-Day
* Don’t Burn Bridges
* Shut Down The Water Works
* Ask If There’s Some Other Option
* Find Out What They’ll Give You To Go Away
* Take Your Time

The Days After
* File For Unemployment
* Seek Coverage
* Protect Your Retirement Funds
* Take Care Of Yourself
* Craft Your Story
* Hit The Classifieds
* Spread The Word

Set Goals
Your number-one goal is to get a job, but setting smaller targets will help keep you on track. Business consultant Keith Ferrazzi, author of Who’s Got Your Back?, suggests setting weekly objectives, such as “I will meet with four contacts this week” or “I will sign up for a class.” This reinforces your sense of accomplishment, even if you haven’t found a job. “And most of all, keep reminding yourself what a tremendous opportunity this is to redefine what’s next for you,” he says.

Warning about Foreign Currency Payments - RSA

  06/21/10 10:52, by Len, Categories: Risk Management, Banking

Source: Article by Neesa Moodley-isaacs

You should be wary of accepting payment for goods and services in foreign currencies. Not accepting such payments will ensure that you avoid fraud and the risk of contravening the laws that govern the exchange of currency, the South African Banking Risk Information Centre (Sabric) says.

Apart from not knowing whether or not the foreign currency is counterfeit, you may find it difficult to exchange it at local banks if you are not legally entitled to accept and exchange foreign currency, Kalyani Pillay, the chief executive of Sabric, says.

"The best thing ordinary members of the public and small businesses can do is to request that all payments for goods and services be made in rands, if cash is the medium of payment," she says.

Full story »

SAICA Bulletin - 2010 Tax Related Budget Proposals

  02/23/10 10:43, by Len, Categories: Budgeting, Tax Optimisation

Source: Article by SAICA - the South African Institute of Chartered Accountants

The SAICA Bulletin can be downloaded in pdf format here

Summary:
The following is a summary of the tax related budget proposals announced by the Minister of
Finance on 17 February 2010.

BUDGET HIGHLIGHTS
The main tax proposals include:
• Personal income tax relief for individuals amounting to R6.5bn. This partially compensates for inflation.
• Limited voluntary disclosure option for taxpayers in default
• Exchange control reforms proposed
• Interest-income exemption increased to R22 300 per year and to R32 000 for those over 65
• Standard Income Tax on Employees (SITE) system to be discontinued
• Congestion, pollution and landfill taxes considered
• Niggles remain for proposed dividend tax
• National Health Insurance scheme delayed for about five years
• "Tips for Pravin" to continue, using Facebook and other new forms of media
• Gambling winnings being exempt from personal income tax to be reviewed - impacts on casino, online gambling and lotto winners
• Wage subsidy for young people
• Clamp down on company car fringe benefits

Retirement Planning 101

  02/15/10 11:03, by Len, Categories: Personal Financial Management, Retirement Planning

Source: Article by Shirley Passanah — spice4life.com

'Retirement planning 101' first appeared on iafrica.com on 5 August 2008. It is the most read 'Personal Finance/Retirement' article of the past year.

What reasons could there possibly be why you're not saving for retirement?

1. I am too young to start saving for retirement and still have many years to go.
2. I cannot afford to save for retirement and would rather pay more into my bond or invest in another property.
3. My partner says I should not waste my money. He/She will take care of me and we should invest in other assets.
4. Retirement annuities are not what they seem to be.

Why these reasons fall flat:

Full story »

SARS May Close Down Dividend Unit Trusts

  02/11/10 06:56, by Len, Categories: Personal Financial Management, Retirement Planning, Tax Optimisation, Risk Management

Source: Article by Leani Wessels - Fin24.com

Johannesburg - The South African Revenue Service (Sars) may force some dividend income unit trusts to shut down.

This is according to Investec Asset Management deputy MD Thabo Khojane, who told journalists on Wednesday that Sars could act soon on the issue.
The Financial Services Board [FSB] issued a circular in January, informing asset management groups of the investigation and warning portfolio managers to prepare exit strategies should some funds be closed down.

"There are structures using covert instruments to convert interest income into dividend income," said Patrick Ward, the FSB's head of collective investments. Unlike interest income, dividend income is not taxed by Sars. Dividend income unit trusts hold about R54bn in assets. According to Ward, the investigation is in the hands of Sars. The underlying holdings of most dividend income unit trusts consist of preference shares and cash. However, Sars will be investigating those suspected of using underhanded instruments to avoid tax.

The FSB circular stated that "adverse tax consequences" could result from the outcome of the probe.

Sars was not immediately available to comment on the issue.

PROPERTY - Painful Purge

  02/07/10 16:48, by Len, Categories: Financial Management, Investment Management, Property Investment

Source: Article by Ian Fife of the Financial Mail

The property market slump is over. Developers and owners are distressed, banks are worried and impatient, and investors are sitting on the sidelines. Now comes the property cleanout, before the slow, fragile recovery.

Ian Fife tracks the winners, losers and opportunities in this new upswing.

First came the property bust. Now comes the sequel:

Property crashes, the exposure of dodgy deals and banks searching for a way to limit their losses. This real estate Little Armageddon is a normal punctuation mark at the end of one cycle and the beginning of another.

Banks have already provisionally written off (impaired) R132bn of the money they have lent. At least R25bn of that is against their property lending, according to an FM industry source. Much of this R25bn will show up as deeply discounted prices as the banks sell their bad properties to cash-rich developers and investors. Says one banker: "At the end of the day anything more than zero is good."

Full story »

THE WINNERS - Smart Money Cleans Up !

  02/07/10 16:37, by Len, Categories: Investment Management, Property Investment

Source: Article by Ian Fife of the Financial Mail

It's feeding time for investors phase of the property cycle. They are the experienced ones who saw the slump coming, put their cash reserves aside and waited. Despite high-profile distressed projects, such as Pinnacle Point, now emerging it's been a disappointing time, particularly for big commercial property investors. "There have been few good properties coming onto the market," says developer Mike Crawford, who has been waiting for bargains since late 2007. This is partly because most investors and lenders have been prudent in their exposure to property. The number of forced sales reflects the enormous growth in the property market over the past decade.

Despite its volatility, the property market is recovering from nearly 40 years of under-development. The recent slump in house prices was me rely an interruption in this recovery, which could continue for the next decade.

Full story »

Smart Money Tips for Working Women

  02/07/10 16:18, by Len, Categories: Financial Management, Personal Financial Management, Budgeting, Debt Management, Investment Management, Retirement Planning, Saving

Source: Article by Zenoyise Madikwa of the Sowetan

WOMEN have come a long way, but the odds are stacked against them when it comes to finances. Worse, many women view money and money-related tasks as necessary evils, not opportunities to even the odds. According to Liberty Life consumer economist Tendani Mantshimuli, while neither gender has an exclusive claim to better money management skills, women are not getting the same deal as men. They earn about three-quarters of what men make. In a divorce, they tend to get less of the assets and more of the children.

Mantshimuli offers the following advice for women:

Full story »

Can you Really Afford the High Price of Sitting in Cash?

  02/07/10 15:58, by Len, Categories: Personal Financial Management, Investment Management

Source: Article by Lucienne Fild of itinews

Seek the help of a qualified financial adviser before committing your money to an investment vehicle

Five years ago around 19% of inflows into unit trust funds came directly from individual investors. During 2009 close to 28% of investments were made by individuals without the involvement of a financial adviser. Peter Dempsey, deputy CEO of the Association for Savings and Investment South Africa [ASISA], says the fact that more investors are willing to take investment decisions without the help of a financial adviser does not mean that these investors are taking chances.On the contrary, the majority of direct investors are simply investing their spare cash into money market funds.He says unfortunately this has resulted in many investors missing out on the good run in equity funds. General equity funds returned an average of 16.2% a year for the five years ended December 31, 2009. The average five year return for money market funds was 8.8% a year.

Full story »

Lack of Budgeting may be your Biggest Financial Mistake in 2010

  01/22/10 11:30, by Len, Categories: Personal Financial Management, Budgeting

Article by Andy Gilder - GM of justmoney.co.za

57% do not plan a budget!

The latest results of the Justmoney.co.za poll indicate that some 57% of the site's users don't plan a monthly budget. This, according to the site's General Manager Andy Gilder, could be the biggest financial mistake that South African's make at the beginning of every year.

"Speak to any personal finance expert and they'll tell you that putting together a budget is the cornerstone of managing household and personal expenses - this is why the results of our latest poll are so concerning."

Full story »

What the 2009 Recession Did Right

  01/22/10 11:25, by Len, Categories: Personal Financial Management, Budgeting, Cash Flow Management, Debt Management, Saving

Article by Carl Fischer, Capitec Bank Executive: Marketing and Corporate Affairs

Positive side-effects of 2009's financial crisis

Cape Town, January 13, 2010: There is no doubt that the global credit crunch and recession has impacted our lives. From widespread retrenchments to lower year-end bonuses (or none at all) and the ballooning cost of living, the 2009 financial crisis hit consumers and businesses hard. Yet, despite South Africa's R1,14 trillion debt bill and the 150 000 people expected to be applying for debt counselling by year-end, the recession has done something right because it made us rethink our financial priorities and encouraged us to clean up our spending habits.

In fact, its effect was so pronounced that 79% of South Africans surveyed in a recent global money and finance study (Synovate, August 2009) said they will do their best not to go back to spending as much as they used to before the economic downturn.

Full story »

The worst day of the year, mathematically - 19th Januar 2010

  01/22/10 11:18, by Len, Categories: Personal Financial Management, Saving, Stress, Happiness

Article by Andy Gilder - GM of justmoney.co.za

The 3rd Monday of the year is Blue Monday: Mathematically the worst day of the year
Worst day. If you are feeling a little more depressed than usual this Monday and not sure why, a British psychologist has the answer for you.

In 2005, Dr Cliff Arnall, a former Cardiff University professor, drew up a pseudo mathematical equation taking into account factors like Christmas Time debt, the time since your last pay cheque, your post holiday blues and the standard Monday morning blues to prove that today is the most depressing day of the year.

Full story »

5 Things You Can Stop Worrying About

  01/14/10 06:35, by Len, Categories: Personal Financial Management, Retirement Planning, Health, Stress, Happiness

Source: Article in Men'sHealth by Steve Calechman

And five others that should trouble you deeply

1. You’ll never find someone
Why you shouldn’t worry: There are more women than men in the world, so chill out. And as you add birthdays, you add women to your dating range. Stop trying to hit bullseyes every night. Dating is unavoidable trial and error.

What you should worry about: Hooking up with a crazy person. “If you think she’s surrounded by off-the-wall people and she’s the only one who’s stable, think again,” says psychiatrist Dr Scott Haltzman, author of The Secrets of Happily Married Men.

Full story »

Seven Money Secrets Experts Swear By

  01/12/10 08:54, by Len, Categories: Personal Financial Management, Budgeting, Debt Management, Saving

Source: Article by My Debt

1. Compound interest
These two words are extremely powerful. They refer to interest earned on interest over time, a passive way to growing money exponentially. The way it works is simple. If you start with R100 in an investment, which offers 10 percent interest, you’ll earn R10 interest and the base amount will increase to R110. The next time interest is earned, it will be calculated as 10 percent of R110, so a further R11 will be added to the base amount, and so forth. Imagine the kind of growth your investment can achieve over the long term if you don’t take money out prematurely. So take advantage of the power of compound interest! This is a powerful reason not to put your money under a mattress or in a low interest account.

Full story »

Investment Strategy 2010: If All is Chaos, What Then?

  01/12/10 08:21, by Len, Categories: Personal Financial Management, Investment Management

Source: Article by Felicity Duncan*

Twenty-ten won't be an easy year, but if you're sensible, it could still be a lucrative one. The trick, in so far as there is a trick, is to spot opportunities before the crowd does and to take advantage of them, all the while making sure that you aren't taking on more risk than you are comfortable with. Now, most people tend to focus on the first part of that instruction and spend their time looking for sexy opportunities, but the second part - controlling your risk - is probably more important, because the level of risk you are willing to take should be what ultimately drives your investment strategy. So let's take a moment to determine what you want to accomplish with your money this year, and how much can you afford to lose?

Full story »

Property: Make Picket Fences Part of your Portfolio

  01/12/10 08:12, by Len, Categories: Investment Management, Retirement Planning, Risk Management, Saving, Property Investment

Source: Article by Di Seccombe, senior tax consultant at BDO Spencer Steward

As a woman your investment portfolio plays a vital role in establishing your financial independence and creating financial freedom in your later years. With everyone from your personal trainer to your mother in-law giving you advice about how best to spend your money, Di Seccombe suggests that picket fences not only make good neighbours, but also very shrewd investments – and should definitely be a part of your portfolio…

Owning your own property is both daunting and liberating. Probably the biggest – and potentially most valuable – investment you will ever make, it's important that your decision to buy a property is one that you won't regret two months later or in twenty years' time. Whether you're buying a home for your children to grow old in or a second property for rental income, this type of investment requires you to do your homework both financially and from a personal point of view.

Full story »

Following the Golden Goose or Creating a Golden Egg?

  01/12/10 08:06, by Len, Categories: Retirement Planning, Tax Optimisation

Source: Article by Allan Heynen, Director: BDO Spencer Steward

With a plethora of retirement products and options to choose from, perhaps the most challenging aspect of planning for these critical years is recognising that your retirement package cannot and should not resemble everyone else's. By taking your unique set of needs and goals into account when planning for retirement and selecting your basket of products accordingly, you will ensure that you're building a golden nest egg – as opposed to chasing everyone else's golden goose…

Full story »

Identity Management: Collaborative and Continuous

  01/11/10 07:31, by Len, Categories: Personal Financial Management, Risk Management

Source: Article by Mark Dunn, Director of Risk Management

We all like to think of ourselves as individuals – unique, one of a kind. With identity fraud on the increase, however, unless you safeguard your company's financial information religiously, you're bound to discover a whole new team of invisible employees who love using the company credit card. Worse still, give an identity fraudster access to company information and you might suddenly find competitors benefiting from highly “confidential” data. Putting a comprehensive identity and access management strategy in place is thus critical for any business…

Full story »

Risky and yet so Very Rewarding

  01/11/10 07:24, by Len, Categories: Personal Financial Management, Investment Management

Source: Article by Thembisa Mapukata - an Old Mutual marketing manager

How and where to invest will be one of the most important decisions you can make this year. LET’S take a look at one of the key-building blocks of a healthy investment portfolio – equities.

Companies need money to grow. Instead of borrowing all their capital from lenders, companies can raise finance by issuing shares to investors. When you buy shares, you become eligible to receive part of the company’s profits in the form of dividends, which are often paid at six-monthly intervals, as cash or in the form of more shares.

Full story »

Avert Retirement Panic: Plan

  01/08/10 11:47, by Len, Categories: Personal Financial Management, Investment Management, Retirement Planning

Source: Article by Allan Heynen, director at BDO Spencer Steward Financial Services

When you eventually walk out of your office or business at the age of 60 or 65, will you be financially ready for what lies ahead? Whether you're just starting your working career or coming to the end of it, the best way to avert retirement finance panic is to plan - no matter the state of the economy or markets.

You or your finances – which will outlast or outlive which? With extremely negative market sentiment currently pervading all aspects of our lives, increasing oil prices and interest rate hikes on the horizon, South Africans of all ages are finding themselves walking a financial tightrope each month. Less disposable income means cutbacks; reducing spending on non-essentials. While non-essentials may be holidays and luxury cars for some, and hair dye and chocolates for others, saving towards your retirement – no matter how young you are or the volatility of the market – is an essential.

Full story »

The 6 things you should Teach your Children (or Spouse, Friends, Yourself) about Wealth

  01/08/10 11:05, by Len, Categories: Financial Management, Budgeting, Cash Flow Management, Debt Management, Investment Management

Source: Feature by Nicholas van der Meer - December 2009

1. Save
‘A penny here, and a dollar there, placed at interest, goes on accumulating, and in this way the desired result is attained. It requires some training, perhaps, to accomplish this economy, but once used to it, you will find there is more satisfaction in rational saving than in irrational spending.’ P.T. Barnum
Learning to save is probably the most important thing you can teach your child about wealth. It is not only prudent to put something away for a ‘rainy day’, but it also encourages children to save for a large costly item instead of buying it on credit.

Full story »

The Seven Habits of Highly Effective Investors

  01/08/10 10:50, by Len, Categories: Personal Financial Management, Investment Management

Source: Article by AJ Cilliers - December 2009

Warren Buffett has often pointed out that to invest in a particular share is to buy a small piece of an underlying company. If this seems glaringly obvious, we could be excused for wondering why so many individuals buy shares with scant regard to the actual company they are buying into. Investment writer Glen Arnold has two words to describe such people: “uninformed speculators.”

How, then, can we ensure that we swell the ranks of the investors and avoid the dreaded “speculator” category? We have identified seven key actions that responsible and effective investors should consider before parting with their cash:

Full story »

Money Market Investment Risks

  01/08/10 07:14, by Len, Categories: Financial Management, Investment Management, Money Markets

Source: Article by Ian Liddle and Andrew Lapping of Allan Gray

Your money is perfectly safe in a money market fund, right? Wrong!

Risk: The possibility that something unpleasant will happen / the possibility of meeting danger or suffering harm or loss (Oxford English Dictionary).

We expect that all readers of this article have come to accept by now that Santa did not squeeze down our chimneys this festive season and that the Easter Bunny will not be knocking on our doors in April. But many of us are still struggling to wean ourselves from a belief in the most fantastical and mythical creature of all: a risk-free investment. So we will say it now: there is no such thing as a risk-free investment.

Full story »

Equinox - The Current Market View - No more easy money, on to the difficult phase of rising share prices and falling earnings

  12/30/09 15:16, by Len, Categories: Financial Management, Personal Financial Management, Investment Management

Source: Equinox Market View

Matt Brenzel, portfolio manager and investment strategist at Cadiz Asset Management writes in the latest Cadiz Market View that: ‘…. equity investors currently find themselves in one of the more interesting phases of a share market’s cycle. It’s the one that immediately follows the misnamed “easy money” stage. (It’s only easy if you get the timing spot on and that only happens once in a lifetime). The latter is usually missed by a lot of investors who – a short while previously - suffered at the hands (or claws!) of a vicious bear. The macro picture is generally at its bleakest, with the economy showing little signs of growth. The news flow is overwhelmingly bearish and the consensus is for further downside to equity prices’.

Full story »

Selected Articles from Equinox.co.za

  12/30/09 14:50, by Len, Categories: Financial Management, Personal Financial Management, Investment Management

Source: Equinox Articles - Edited by Liz Still

29 Dec 09 - The economy: Kevin Lings
Kevin Lings, Chief Economist at Stanlib writes that over a year has already gone by since the global financial crisis began in September 2008. Although most economies remain fragile, there are..

29 Dec 09 - A Paradigm shift: Post crisis opportunities (or why economists are not very good at economics)
Eric Lonergan, Director, Asset Allocation, M&G London writes that as humans, whether we admit it or not, we all defer to and like to have structures, paradigms, checklists or frameworks for..

29 Dec 09 - A place for property: Two different views
Keillen Ndlovu and Evan Jankelowitz, Co-Portfolio Managers of the Stanlib Property Income Fund write that many would be surprised to hear that listed property has been the best performing asset..

29 Dec 09 - A place for property: Two different views
Neels van Schaik of Alphen Asset Management writes that the property investors are divided into two very firm camps, the believers and the non-believers. We see ourselves as the 'middle camp',..

22 Dec 09 - Review of 2009: Seed Investments
2009 is fast coming to a close and this is Seed Investment's final newsletter for the year. The year started off where 2008 had ended; reeling from the final quarter of 2008, but then turned..

22 Dec 09 - Ten retirement tips for 2010: Coronation
Pieter Koekemoer , Head of Personal Investments at Coronation Asset Management writes that 2009 started with global financial markets in freefall and the entire financial system in crisis. In an..

22 Dec 09 - Three new macro-economic trends to note: Sanlam Investment Managers
Arthur Kamp, Investment Economist from Sanlam Investment Management writes that we should take note of three new macro economic trends: The SA economy is emerges from recession, local inflation..

22 Dec 09 - The growing fiscal deficit shows business remains under stress
Mike Ronald, Head: Investment Team at Marriott Asset Management, looks at the latest figures from Treasury and concludes that the business sector remains under pressure. In addition, long bond..

18 Dec 09 - Outlook for 2010: Plexus
Dr Prieur du Plessis, chairman of the Plexus Group, sheds some light on his investment team's thinking regarding prospects for the global economy and financial..

18 Dec 09 - Dubai 101: Embracing volatility as a friend
Armien Tyer, Managing Director of Sanlam Investment Managers writes that just when investors thought the worst was over and financial markets were headed for calmer waters, Dubai's shock debt..

18 Dec 09 - It’s only over when the fat turkey flies home to roost
Arno Lawrenz of Atlantic Asset Management writes that when comparing current market levels to those of the previous week (bonds remain within kicking distance of its average for the past 31..

15 Dec 09 - Our views on the investment landscape: Analytics
Lance Vogel, Chief Investment Officer of Analytics, writes that as we head into the holiday season, it is instructive to reflect on some relevant events over the last few months that will have..

14 Dec 09 - Local-Foreign vs. Foreign-Foreign
Greg Flash of Alphen Asset Management writes that it would seem that investing in a local, rand denominated global flexible or global equity fund would on average provide more consistent, less..

14 Dec 09 - The risk/risk trade-off: Allan Gray
Delphine Govender, Portfolio Manager & Director, Allan Gray Limited, writes that Allan Gray's mission is to provide clients with the highest investment returns at no- greater-than-average risk...

14 Dec 09 - How has the buy and hold strategy worked? asks Prieur du Plessis
Prieur du Plessis of Plexus Asset Mangement writes that equity investors who have followed the buy-and-hold strategy in the US market have lost big money over the last ten years in both nominal..

14 Dec 09 - Prospects for 2010: Not fixed, but better
Jeremy Gardiner, director at Investec Asset Management, looks back on a turbulent eighteen months and sets out what we can expect from..

14 Dec 09 - Prospects for 2010: Adrian Clayton
Adrian Clayton, Alphen Asset Management reviews how the company has managed money over the last two years, and notes some concerns for..

14 Dec 09 - A classy set of book recommendations for Christmas reading
There are few things more satisfying than a good book. We asked a selection of fund managers to recommend books that they have recently enjoyed, specifically encouraging the inclusion of..

09 Dec 09 - What is in store for the markets, 2010 and beyond?
Shaun le Roux of Alphen Asset Management writes that it is almost not worth trying to guess what is in store for the markets next..

08 Dec 09 - The year we side-stepped depression: Sanlam Investment Managers
Arthur Kamp, investment economist at Sanlam Investment Managers (SIM) writes that the real world is always more surprising than we can ever imagine. And 2009 proved to be no exception. Markets,..

07 Dec 09 - Global economy has bottomed: Prieur du Plessis
Dr Prieur du Plessis, chairman of the Plexus Group, writes that in his view, the global economy has bottomed. There is definite evidence of expansion in both the manufacturing and..

07 Dec 09 - An interesting year is coming to an end: Alphen
Neels van Schaik reminds us that calendar year 2008 ended with a brave rally of almost 20% between late November and December, after the market crashed during the second half of..

07 Dec 09 - Can active managers consistently outperform an index?
Ian de Lange of Seed investments writes that an ongoing question that many investors pose is one which asks whether fund managers can consistently outperform an..

07 Dec 09 - Dubai or not to buy? asks Arno Lawrenz
Arno Lawrenz, Chief Investment Officer at Atlantic Asset Management, poses the question: Dubai or not to buy... that is the question... or maybe..

07 Dec 09 - Economic and market outlook for 2010: Absa Asset Management
Craig Pheiffer, General Manager: Investments at Absa Asset Management Private Clients writes that in the Absa January 2009 newsletter (in the middle of the recession and before Q4 2008 GDP had..

02 Dec 09 - Earnings season - not shooting green!
Philipp Wörz of Alphen Asset Management writes on the recent earnings season, noting that the All-Share Index continued with its good form in November delivering 2.1% on a total return basis..

02 Dec 09 - China: Worth all the fuss?
Kwabena Twumasi, Trainee Portfolio Manager at Absa Asset Management Private Clients writes that Economists, analysts, chief executives and any other person who has an audience to listen, seem to..

01 Dec 09 - Young South Africans must be considered in retirement and healthcare reforms
In an effort to improve the lives of ordinary South Africans, the country is o­n the brink of reforming both the retirement and health sectors. The issue of youth unemployment is the elephant in..

01 Dec 09 - A bubble: Trade in high volumes at prices significantly above intrinsic value
Arthur Karras of Hermes Asset Management writes that since the global financial crisis hit a year ago, investors have been concerned about further fall-out impacting their depleted portfolios...

01 Dec 09 - What should we make of our currency volatility?
Ian de Lange of Seed Investments writes that markets around the world gained ground on the first day in December. Asian markets closed up strongly, with the Japanese Nikkei up 2,2% on news that..

01 Dec 09 - Investing offshore: Its all about price
Mark Cliff of Alphen Asset Management writes that a cursory glance at the fund fact sheets of the majority of the better asset allocation funds out there shows one call common to most: all the..

01 Dec 09 - Will emerging market outperformance last?
The MSCI Emerging Markets Index has notched up a massive 72,3% gain for the year to date, and an even more impressive 101,4% since the March 9 lows. According to Dr Prieur du Plessis, chairman..

26 Nov 09 - Finding value in an uneven recovery, emerging markets versus developed markets
Michael Hasenstab, Co-Director of International Bonds at the Franklin Templeton Fixed Income Group (pictured) writes that he believes that there is likely to be differentiation in how various..

25 Nov 09 - Myth Busters: Best and worst months for stock markets
Greg Flash of Alphen Asset Management, writes that the quote from Mark Twain, does seem not that profound because three of the worst stock market crashes happened roughly in October - 1929,..

25 Nov 09 - Has the recession ended? [1]
Ian de Lange of Seed Investments notes that South Africa released official quarter 3 GDP statistics yesterday. These tend to be a lagging indicator, but encouragingly reflected growth for the..

25 Nov 09 - Has the recession ended? [2]
Adenaan Hardien, Chief Economist at Cadiz Asset Management writes that Stats SA figures showed that South Africa’s first recession since 1992 was relatively short-lived and ended in the second..

17 Nov 09 - Investing in the post-crisis era: Cannon Asset Management
Adrian Saville, CIO of Cannon Asset Managers, says the global fabric has changed. He assesses the post-crisis investment landscape and suggests the best investment..

17 Nov 09 - Interesting breakdown of collective investment market share
Mark Seymour of Alphen Asset Management writes that South African retail investors in unit trusts are spoilt for choice. At present there are 601 funds which house R666bn worth of assets to..

17 Nov 09 - The risk/reward ratio of the stock market is much higher today than it was on 9th March 2009
According to the Stanlib Executive Summary, yesterday the JSE rose to a new 2009 high of over 27,000. The last time it was at this level was in early September 2008, before the Lehman Bros..

13 Nov 09 - Shape doesn't matter - emerging markets do
Arthur Kamp, Investment Economist at Sanlam Investment Managers (pictured right) says that current attempts to predict the likely shape of the global recovery are focusing attention too narrowly..

13 Nov 09 - Update on emerging markets, including a closer look at the Russian market
Dr. Mark Mobius, Executive Chairman, Templeton Asset Management Ltd (pictured right) writes that emerging markets recorded mixed results in October. This led the MSCI Emerging Markets index to..

13 Nov 09 - Show me the money: A bird in the hand is worth two in the bush
Chris Boehmke, investment analyst at Regarding Capital Management writes that for some time now, dividends have been considered passé and just plain boring. A cursory glance through history..

12 Nov 09 - Economic performance no guarantee of investment returns: Allan Gray
Research conducted by Orbis, Allan Gray’s global asset management partner, shows very little correlation between growth in real dividends per share over the 20th century and economic growth in..

12 Nov 09 - Which is best? A single manager or a multi-manager?
One of the the age-old debates in the investment and retirement fund industry is whether it is better to put all your eggs in one basket, or to spread your hard- earned savings between a number..

12 Nov 09 - ASISA: Rand strength drives institutional investors into foreign equity funds
Association for Savings and Investment South Africa (ASISA) report on one of the highest ever net quarterly inflows into foreign currency unit trust funds registered with the Financial Services..

10 Nov 09 - Building capital: The cornerstone of any investment portfolio
According to Johan Pyper, head of research at Plexus Asset Management, it is a well-known fact that South African investors do not make adequate provision for retirement. He believes the reason..

09 Nov 09 - Australia eyes South African unit trust trading model
South Africa is the only country in the world to have successfully launched an industry-wide electronic bureau for the trading of unit trust funds. The business, called FinSwitch, is now 10..

09 Nov 09 - Does Tactical Asset Allocation Work?
Tactical Asset Allocation in conjunction with Strategic Asset Allocation are both strategies that are used by many asset management houses both in South Africa and abroad. Greg Flash of Alphen..

09 Nov 09 - Analytics: No lurch to the left
Lance Vogel of Analytics writes that the most important recent event for market- watchers was Finance Minister Pravin Gordhan's presentation of the Medium Term budget framework. 'In our view', he..

04 Nov 09 - Why the extrapolation of investment trends is not such a hot idea
Ian de Lange of Seed Investments writes that Robert Prechter is a technical market specialist who has been analysing the markets since 1975. In a report titled, "What really moves the market" he..

29 Oct 09 - Active versus passive debate: Not so simple anymore
Johan Pyper, head of research at Plexus Asset Management, writes that with the increasing number 'more clever' index trackers such as fundamental indexation, the traditional arguments for and..

29 Oct 09 - Lower inflation ... for now
Ian de Lange of Seed Investments writes that inflation came in slightly lower than expected, which helped government bond yields down - i.e. prices up. This despite the fact that government is..

29 Oct 09 - ASISA stats reveal investors have largely missed the equity market recover
Jeremy Gardiner, director at Investec Asset Management, says the third quarter collective investment scheme statistics, released by ASISA this week, suggest that many retail investors have..

29 Oct 09 - The seven myths of investing: Sanlam Investment Management
Ricco Friedrich, head of value-managed shares at Sanlam Investment Management writes that myths are widely held beliefs that are mistaken as truths. For example, for long periods of time people..

29 Oct 09 - Time horizon determines appropriate asset allocation decisions
Mark Cliff of Alphen Asset Managers looks at the risk/return trade-off and how critical an investor's time horizon is in determining an appropriate asset..

20 Oct 09 - Global and South African economic update from Stanlib
Kevin Lings and Melissa Dyer of Stanlib Economics and Group Advisory Services write that during September US retail sales declined by 1.5%m/m, which was still better than expected. Overall..

20 Oct 09 - The key to correct asset allocation
Ian de Lange of Seed Investments (pictured) writes that a critical detail when deciding on the composition of your portfolio is your investment time horizon. Many studies have shown that your..

20 Oct 09 - To index or not to index?
Arthur Karas , the Chief Investment Officer of Hermes Asset Management writes that benchmarking has encouraged conservatism amongst fund managers. The issue of benchmarking in investment has..

20 Oct 09 - SA likely to escape recession in third quarter 2009: Old Mutual
Recent economic data are pointing to the likelihood that South Africa came out of recession during the third quarter of 2009, with third quarter GDP data likely to show economic growth of around..

15 Oct 09 - Active management delivers in emerging markets: Coronation
Following the events of 2008, emerging markets sustained their excellent performance in the past quarter, with most African markets following suit. Through smart stock selection and asset..

15 Oct 09 - The never ending question: Do you switch to the top performer?
Mark Seymour writes that we are all aware that there has been a proliferation of funds and many investment professionals and retail investors make a habit of switching between managers to attain..

13 Oct 09 - The rise of China: An eyewitness account
Dr. Mark Mobius, Executive Chairman, Templeton Asset Management Ltd writes that on October 1, 2009, China celebrated the 60th anniversary of the founding of the People's Republic of..

13 Oct 09 - Market set to move sideways for many years: Allan Gray
Mahesh Cooper, head of Orbis Servicing in South Africa and a director of Allan Gray says that the significant rise in global stock markets over the last 12 months has resulted in many questions..

13 Oct 09 - The case for investing in Global Real Estate Funds: Plexus
Real estate equities and funds have re-bounded strongly from their lows in February this year. According to Dr Prieur du Plessis, chairman of the Plexus Group, the Plexus Global REIT Index - an..

13 Oct 09 - Diversification of Equity Funds - Is this Really Possible?
Greg Flash of Alphen Asset Management notes that in South Africa on the JSE All Index there are 163 stocks that can be invested in. For the local equity unit trust managers this is not a large..

08 Oct 09 - Is a 2009-style gold rush upon us?
Shaun le Roux of Alphen Asset Management writes that investing in gold shares is not for the faint-hearted. They have a life of their own and are unlike any other shares on the stock exchange...

08 Oct 09 - Watch and wait for further market direction: Analytics
Lance Vogel, Chief Investment Officer of Analytics writes that other than the derailed MTN/Bharti merger causing a minor blip in the strong nature of the rand, our local investment landscape is..

08 Oct 09 - Equity market on track but showing signs of exhaustion: Investec
Jeremy Gardiner, director of Investec Asset Management writes that despite predictions of doom and gloom from several of the world's leading economic commentators, the equity market recovery..

06 Oct 09 - Markets have gone up too much, too soon, too fast: Nouriel Roubini
Ian de Lange of Seed Investment writes that during rising markets, asset prices climb a wall of worry and the last seven months have been no..

06 Oct 09 - 'Is it a good time to invest offshore?', asks Prieur du Plessis.
With the South African rand proving to be one of the world's strongest currencies for the year to date (gaining almost 29% against the US dollar, 22% against the euro and 17% against the pound..

06 Oct 09 - Good news out there, but don't lose sight of the problems in a 'less bad' environment: Flagship
Winston Floquet, Chief Investment Officer of boutique asset management company Flagship Asset Management writes that while the much-celebrated green shoots have, until recently, generally..

How to get Started in Personal Financial Management

  09/22/09 14:46, by Len, Categories: Announcements

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