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Although South African government bonds are less expensive than they were a few months ago, they remain overpriced and continue to offer little value to investors. This is according to value based asset manager, RECM, which says that despite the recent sell-off following concerns over the US tapering its Quantitative Easing (QE) programme, local government bond yields are currently still depressed.
Africa’s population is growing fast and the United Nations (UN) has forecast that 22% of the world’s inhabitants will be living on the continent by 2050. Being nearly as urbanised as China, Africa has 52 cities with in excess of one million inhabitants (as at 2010).
South Africa’s listed property sector finished the week ended 11 October 2013 largely unchanged despite a stronger Rand and lower bond yields. Investors appeared reluctant to invest in risky assets while US politicians squabbled over a new budget in Washington. South African equities finished 0.5% lower, while the bond market gained 1.2%.
When building a financial plan, it is important for investors to consider the return required to achieve specific investment goals. These goals are however seldom achieved without a certain amount of investment ‘risk’, and risk must therefore be considered as a crucial element when developing and implementing a financial plan.
The strongest deterrent against FSP compliance missteps is or should be: