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  • Most investors understand that diversification is important. Research has shown that investors can produce better risk-adjusted returns by diversifying between, and often even within, different asset classes. Someone who uses traditional financial instruments to save for retirement will typically invest in a balanced portfolio. Depending on many factors, they will have around 40% to 60% equity exposure (local and global), 15% to 30% fixed-income exposure (mostly local but also global), and then some listed property, commodity, and cash exposure.

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  • Nobel Prize winner Harry Markowitz famously said that diversification is the only free lunch in investing. In simple terms, this means that you can quite easily keep your expected level of return constant, or even increase your expected return, without taking on additional risk. Diversification is one of the most important principles in investing: It involves spreading your money across a variety of assets or even across asset classes.

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  • American stockbroker, Peter Schiff, delivered a timeless reminder: “The stock market is not the economy, and the economy is not the stock market”. What Schiff was trying to say is that the stock market, often referred to as Wall Street, is not always an accurate reflection of what occurs on Main Street, that is, the real economy. Schiff’s statement has never rung truer than in the ever-fluctuating landscape of today’s financial world.

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  • Shortly after the turn of the century, following the Asian financial crisis in 1997-1998 and the dot-com bubble burst in 2000-2002, investor sentiment swung increasingly in favour of emerging markets. China was the main driving force, growing at an average rate of about 10% annually between 1990 and 2000, and almost reaching an 11% annual growth rate between 2001 and 2007-2008.

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  • Like most passionate South Africans, we thoroughly enjoy watching the Rugby World Cup. Setting aside the tragic events that have unfolded in Ukraine and Israel, this sporting event often resembles strategic warfare between nations. Just as governments play crucial roles in ensuring success within their respective domains, referees are vital to maintaining order on the rugby field.

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  • In the immediate term (three to five years), things can get much worse in South Africa (SA). Each South African must, therefore, decide if they will sit back and blame others or if they will act and make the most of it. In the end, there is one of two decisions: Blaming or changing, which stems from being passive or active, which, ultimately, stems from your worldview (whether you are, generally, pessimistic or optimistic).

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  • Taking a hiatus from checking your investment portfolio for a month can be akin to stepping back from the canvas of daily market fluctuations. It is a deliberate act of patience, allowing the market’s ebb and flow to paint its own picture before returning to assess the masterpiece.

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  • In his address to the public last week, Lesetja Kganyago, the Governor of the South African Reserve Bank (SARB), announced that the Monetary Policy Committee will keep the repurchase rate unchanged at 8.25%. This came shortly after Statistics South Africa showed that consumer prices were contained well within the SARB’s target range of 3% to 6%. After a decrease to 4.7% in July, prices only marginally increased to 4.8% in August, driven mostly by higher food, household, and utility prices. Interestingly, the cost of transport, which includes fuel prices, was lower compared with a year ago.

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  • The investment industry, like most other professions, has evolved over time with various approaches and strategies coming to the fore, each with its own inherent characteristics. When investing in listed shares, two dominant approaches stand out: Fundamental bottom-up and top-down investment strategies. These approaches represent distinct methodologies for selecting and managing investment portfolios, each rooted in a unique perspective and analysis framework.

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  • Last week, prices of both grades of petrol went up by R1.71 per litre while diesel increased by close to R3 per litre. The recent jump in fuel prices is driven by a twofold weakening of the exchange rate and a substantially higher oil price. Having started at around R17 to the United States (US) dollar at the start of the year, the rand has now depreciated by more than 11% year-to-date. The oil price, in turn, has increased by more than 10% already this year, reaching its latest level just above $90 a barrel. A higher oil price will likely add to inflationary pressure, although the impact of higher fuel prices is usually overstated.

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  • The term “economics” has its roots in ancient Greece. It is derived from two Greek words, namely “oikos”, which means “house”, and “nomos”, which means “law” or “custom”. When combined, “oikonomia” roughly translates to “household management” and concerns itself with the efficient allocation of resources within a household.

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  • Central banks in many countries around the world keep on talking a big game, and rightfully so. If consumers start believing that above-trend inflation is over, they might push inflation higher into unwanted territories again. But for now, it seems as though central banks have succeeded in containing inflation. Amidst the sea of short-term noise, it is difficult to determine how the global economy will make it out in one piece. But, fundamentally, we should see stronger emerging markets on the other end.

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