Investing 2017: Building an investing strategy from picturesAdministrator
Picture 1 (below): China Debt …. as a country who are the main buyer of SA resources, the sharp growth of China debt (black dotted line) are alarming. It is a bubble waiting to burst. Strategy to adopt: conservative long-term investing. Resist the temptation to opt out of the markets. The old saying remains true: It is time in the market that matters, not timing the market.
Picture 2 (below): SA Sovereign Credit Default Risk … This is a picture depicting SA risk not paying its debt. This will correlate with investors likelihood to invest. Since the middle of 2015 the risk levels are declining meaning that the investment outlook for 2017 also improves. Strategy to adopt: invest, invest, invest… 2017 could be a good year. Resist the temptation to go too aggressive in your investing. You may, however, use a small percentage of your capital to seek out small pockets of opportunity.
Picture 3 (below): Asset class performances 2016 … Looking at the two far right bars your growth on your investments in SA would have been relative low in 2016. It would have been better to be invested in bonds (orange bar), cash (purple bar) or listed property (blue bar). Strategy to adopt: investing from a low base means that your investment could be far better off in 2017. The old saying still holds. Buy low and sell high. Resist the temptation to opt out of the markets because of a weak 2016. This would be an emotional reaction to market conditions. Weak current conditions give a good buying opportunity.