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Markets may be rational in the long run, but they often don’t seem to behave logically in the short run! Basing your decisions on volatile short-term market movements, which you have no control over, is a recipe for disaster. Afterall, the market is not going to recover tomorrow because you lay awake last night worrying about it, or postpone its recovery to when you have reinvested your cash!
In today’s high visibility age many of us tend to be so concerned with trying to keep up with the Joneses, that we lose sight of our own unique needs and goals. The same can be said for our investment habits where a focus is often placed on short-term, peer investment returns instead of our own long-term goals. While chasing returns can satisfy our immediate urge to “keep up” with our friends and investment peers – it may in fact be compromising whether you can actually achieve your longer term goals.
The United Kingdom’s vote in June 2016 to exit the European Union has done the country’s economy considerable harm and will continue do so for years, even after a resolution has been finalised. Since the majority of UK citizens voted for the UK to exit the European Union, Brexit has cost the UK economy roughly 2%-3% of gross domestic product (GDP) growth over this period, notes Chris Potgieter, Head of Private Client Securities at Old Mutual Wealth.
Generally, equity is expected to perform significantly better than cash but over the last five years, SA cash has outperformed SA equities. “This begs the question: ‘is cash a better investment option in South Africa right now?’” says David Crosoer, Executive: Research & Investments at PPS Investments.
Do you think short-term insurance broking will survive the AI plus humanoid robotics age?