Floris Slabbert’s market update on Groot FM, Wednesday 8 February 2017.

 

Market update

  • After a rollercoaster day, the JSE All Share Index gained 31 points, or 0.1%, since yesterday’s market update on Die Groot Ontbyt.
  • Similarly, the NASDAQ gained 0.4% overnight.
  • The investment star over the past week has been gold, gaining 7.7%. This performance is due in part to President Trump’s actions and an indication of market uncertainty.

Ecsponent’s investments offer stable, predictable returns

 

Market expectations

  • With the State of the Nation address taking place this week, market volatility is expected as the world watches another eventful gathering in parliament.
  • However, we are not alone and internationally bot Donald Trump and Theresa May will be in the spotlight.

 

How should an investor choose an investment advisor?

  • Investors should see this choice as a partnership agreement and not take it lightly.
  • Find an advisor that is registered and accredited by the Financial Services Board (FSB). Investors can find information about their advisors on the FSB’s website www.fsb.co.za. You can also inspect the advisor’s disclosure document. This document is compulsory and details the advisor’s experience and lists the products and services they are licenced to offer.
  • Together, the advisor and investor should agree on a strategy and follow these plans.
  • Additionally, agree on a remuneration structure in advance and reward good advice with performance fees rather than upfront costs.
  • As highlighted before, know what the net effect is, i.e.:
    • what their investment returns are after costs and taxes;
    • understand what the underlying investments of their portfolios include;
    • find the balance between risk and return according to your own risk appetite.

 

Budgeting for wealth creation 

If you haven’t updated your personal budget for 2017 yet, let the national Budget inspire you to review your plan for 2017. Do these three things to achieve success:

  • Make the most of your tax deductions in respect of retirement fund contributions.
  • Banish expensive debt, like credit card and clothing accounts.
  • Before you pay your bills or buy groceries, your budget should make provision for you to “pay yourself” in the form of contributions to your savings.

 

Traditional and linked retirement annuities – what is the difference?

  1. Costs – traditional products can cost up to 3.6 – 4% while new generation products, which cost around 2.4 to 2.6% can save you around 34% and are more transparent.
  2. Flexibility – traditional products have limited flexibility in terms of fund switching. Newer products make switching between funds easy and it is usually free.

Contact us for advice or information. Ecsponent Financial Services is a registered financial services provider.

 

Watch the full interview here: