So far, this week has been a tough one for South Africa, with uncertainty perhaps now the only certainty. Around us, the unrest in Tshwane is a major cause of concern for everyone. For investors, there is even more to digest, including the pending referendum in Britain (Brexit), and the impact of the Federal Reserve’s interest rate decisions or the oil price on our pockets and investment strategies. On this week’s Groot Ontbyt, Floris Slabbert, National Sales Manager of Ecsponent Financial Services, explained how Brexit, the Fed and Ecsponent’s news affect you and how you can invest with certainty.
The world is awaiting the outcome of the Brexit referendum on Thursday, although in our opinion it is most likely that they will remain a member of the European Union. This pending decision contributed to the rand strengthening and closing at R14.79 against the dollar, bringing some relief to consumers. Brent crude oil continues to trade at around $50 per barrel, offering good news to consumers as the expected 27cent per litre fuel price increase is now unlikely.
Looking at other African currencies, the rand closed lower against the pula, at R1.36 per pula and Nigeria experienced a 22% currency depreciation in one day.
Moving on the JSE, the bourse showed an upward movement and closed higher at 53 032 – this also gave momentum to South African companies listed on the London FTSE.
Gold consistently traded between $1200 and $1300 per fine ounce in the last month – this is mainly due to uncertainty in the markets, fuelled by America’s decision to leave their prime lending rate unchanged. The hope here is that the South African government will take full advantage of this and leave local rates unchanged too.
However, looking at interest rate predictions for the rest of the year, we still advise consumers to prepare and make provision in their budgets for another interest rate hike of at least 50 basis points. For a consumer with a bond of R1million, he or she would have been subject to an overall interest rate hike of 2% in the last two years, which roughly translates to an extra R1000 in one’s budget.
Big news at Ecsponent
Ecsponent Limited, listed on the JSE, is now officially trading on the exchange’s main board. This is a great milestone for the group and proves that although we are a relatively young company, we achieve great success with a strong focus on cost management and sound investment policies, which allows our investors to invest with certainty. Therefore, it is business as usual for our preference shareholders who will continue to share in our successful story of growth.
Financial Planning- how to flourish financially in your 50’s
Last week we spoke about the steps people should take to invest when they are in their forties. For those in their fifties, the advice remains very similar, with specific focus areas.
The first step would be to reduce your debt. Consider getting a smaller house to free up some capital and reduce monthly bod payments and then concentrate on paying off unnecessary debt and accounts.
At this stage in your life, some major expenses will start to fall way, e.g. children’s school or university fees. Our advice is that you don’t replace these with other expenses, but rather put the same amounts of money into savings.
Studies have shown that 68% of consumers see a savings plan as secondary expense, however to flourish financially, paying yourself first should be a priority. To find out more about investing in your fifties, or to speak to a qualified investment advisor, contact us.