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Equity markets ended the month of October strongly. It is unclear why exactly. Macroeconomic data has not given many new clues over the past month. Corporate earnings reports have been mixed but slightly better than expected. Perhaps equities were just oversold in August and September. The intentions of central banks, stated and inferred, have also played a role.
Local equity markets have experienced much volatility over the last year, veering between sharp corrections and record highs. As the market continues to react to concern over growth in China, weaker commodity prices and the issue of when the US Federal Reserve will finally raise US interest rates, active local asset managers should be changing their asset allocation calls to offer a measure of protection against this market volatility.
The decision to invest a lump sum is generally the product of an extended period of saving, and investors take pride in their nest egg. Being human, investors tend to keep a close eye on their new investments in the first year, hoping that the promise of growth delivers sooner than expected, but more importantly, they dread seeing their savings decline!
Retail investors in South Africa will soon be able to invest in hedge funds, some of which out-performed the JSE by almost four times in the year ending 30 June 2015.
The strongest deterrent against FSP compliance missteps is or should be: