The resilience factor

Any seasoned financial advisor worth their morning cup of coffee can attest to the shifting tides in South Africa’s investment landscape. It’s not merely about chasing returns these days; clients are desperately looking for stability. This industry trend is tangible, resonating with the feelings of investors in search of a more dependable path.

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As the new financial year dawns, bringing with it the unknown, financial advisors across South Africa are waking up to a new reality – one where everyone is talking about stability.

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Fixed and low-risk deposits have shot out the lights with a 16.44% surge from January 2022 to June 2023 and this trajectory continued upward through 2023, registering another 6.52% growth. That’s not just a blip on the radar; it’s a full-blown stability-seeking change in strategy.  

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In line with this trend, investments into Fedgroup Secured Investment has surged by a whopping 33.3% between January 2022 and June 2023, proving that the need for stability is not just pie in the sky but an actual requirement amidst market volatility, all while delivering noteworthy returns. This is why, after numerous requests from our trusted advisor network, we introduced Fedgroup Fixed Endowment – a competitive fixed return packaged in a tax-efficient vehicle to satisfy this need, with the promise of yet another fixed income product on the horizon.

Given that it is an election year, investors are exercising caution and steering clear of roller-coaster investments. Inflation has long haunted investors, chipping away at the purchasing power of returns and sparking tough conversations about portfolios drowning in a sea of red numbers.

Well, to answer this question, one must address the elephant in the room which is the financial industry with its blinkers on, staring at the same old investment options. 

Amid global market shake-ups and investors side-eyeing local sentiment, the once-unquestioned strategy of diversifying across the same group of equities is now finally facing scrutiny. There seems to be a definite shift towards alternative asset classes, not only serving as a refuge from market volatility and underperforming portfolios, but also providing a more stable pathway for genuine diversification.

Imagine a portfolio that seamlessly blends risk management with stable, yet competitive returns – bold like your morning cup of coffee, but with the subtle hint of the unexpected, like adding a teaspoon of honey. 

This leads to an even more important question:

Why settle for unnecessary risks when you can opt for stability with competitive returns? The thing is, more people are catching on to the idea that, in the complex world of investments, choosing resilience in the realm of alternative investments isn't just a fad—it's a smart move for those trying to navigate today's unpredictable economic environment.

So, maybe it’s time to wake up and smell the coffee, because the world is changing and so should our strategies. 

Fedgroup Financial Holdings (Pty) Ltd is a licensed controlling company and companies within the Group are authorised FSPs.