Hi Everyone, You may all be wondering what the deal is with the - TopicsExpress



          

Hi Everyone, You may all be wondering what the deal is with the markets at the moment as there seems to be a bit of volatility which can be a little unsettling. International markets had an extraordinary year last year, all off the back of loose monetary policy and stronger economic data coming from developed markets. The American Federal Reserve, who have been injecting boat loads of money into their financial system for a few years, have started to tighten the taps due to positive signs that the economy is recovering. Employment and the housing market have been steadily improving over time, signalling a recovery in the U.S economy. The downside of the retraction of some of this liquidity is that emerging markets, like us here in South Africa have been relying on this excess cash pouring into our country by investors looking to get a higher rate than they can get elsewhere. With the improving fundamentals in developed markets, they have started to invest less here and more back into the U.S where they feel a bit safer and that they will be compensated sufficiently. This, as a result has caused our currency to weaken. (in addition to other bad fundamentals affecting our countrys economy) There is good news here, and there is no need to panic! Portfolios are positioned in such a way that we have chosen assets at a discount to their fair value, meaning that the chance of loss over the longer term is limited. In our flexible portfolios, we have a higher exposure to offshore assets and a lower exposure to local assets. The current exposure to equities in general is low and we would feel more comfortable holding onto cash in the shorter term to wait for more opportunities to present themselves before engaging the market at lower levels. There is an unquestionable commitment to remain invested with quality managers who position themselves to achieve the best risk adjusted returns for our clients. Please dont hesitate to contact us for further information.
Posted on: Mon, 03 Feb 2014 10:30:11 +0000

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