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After the events of mid-December last year (now euphemistically termed #Nenegate), many investors – both within the country and those from foreign ranks – are justifiably concerned about the fate of South Africa. The most prominent question seems to be on whether we will lose our sovereign bonds’ investment-grade credit rating and downgraded to so-called junk debt.
“It’s all cyclical; there are moments when the markets will react adversely to global economic shocks and this will affect returns. However, potential investors or those already invested in stock markets would be better off if they stay put. It also requires a long-term view; in the short term markets fluctuate but if one stays the course there are rewards at the end,” says Carin Meyer, CEO of FNB Share Investing.
Government’s tax-free savings (TFS) dispensation has added further impetus to the growth of db X-trackers, the range of JSE-listed exchange traded funds that track the performance of leading offshore indices.
When making investments, there are four key risks – irrespective of an investor’s age – to understand and be aware of which if managed correctly should help you to avoid permanent loss of capital.
The strongest deterrent against FSP compliance missteps is or should be: