Many South Africans have stuck their heads in the sand when it comes to their global assets – or lack thereof. What should you consider if you’re serious about investing offshore?
You’ve no doubt heard the statistic that South Africa’s gross domestic product (GDP) contributes less than 1% to that of the world. This implies there is a lot more growth, larger markets and a diversity of industries elsewhere. As a consequence, all South Africans need some global exposure in their portfolios. Maintaining all your assets locally disqualifies you from a plethora of good investment opportunities abroad and uncorrelated returns.
Knowing you need to invest globally, and implementing this in your portfolio, requires some application. First, you’ll need to understand your current portfolio positioning. Combining this with your unique financial requirements will help you decide how much and where to invest.
A good starting point is to look at your personal balance sheet. Collate all your assets (house, pension fund, investments, etc) and liabilities (home loans, car payments, school fees, etc). Detail is important. Construct your portfolio on a see-through basis to determine actual asset class exposures both locally and internationally, i.e. equities, cash, property etc.
The size of your debt should also be noted as this is a hindrance to building wealth anywhere.
How much is to be externalised necessitates answering questions like these:
How much time do you have to build this portfolio and let value unlock? Time and capital available must be balanced. The less time you have, the more important some of the other questions below become.
Is your retirement saving on track to meet your needs? This is your most important need in any investment strategy. If you can’t answer yes to this question, then focus only on this until the answer is yes. Remember that Regulation 28 allows for 30% of your pension fund to be invested offshore.
This story is from the 21 February 2019 edition of Finweek English.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the 21 February 2019 edition of Finweek English.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
THE HEALTH OF SA'S MEDICAL SCHEMES
As the Covid-19 pandemic abates, finweek takes a look at the financial performance of some of the largest players.
The effect of Gilbertson's departure
With Ntsimbintle Holdings now the major shareholder of Jupiter Mines, it could change SA’s manganese industry.
Making money from music
Why investors are increasingly drawn to the music industry.
Conviction is key
Sandy Rheeder plays a critical role in Mukuru’s mission to open up financial services to the emerging consumer market in Africa through tailor-made technology solutions and platforms.
The post-pandemic toolkit
How CFOs can use technology to support growth.
Big city living exodus
Mini cities like Waterfall City and Steyn City are redefining city-style apartment living.
Big compact, big value
Handsome, with a hefty level of standard specification, the roomy Haval Jolion compact crossover is a great value proposition.
On barriers to entry
There are various ways in which a company or sector can achieve competitive dominance. They usually make for good investments.
Fear and greed in one index
To buck the trend, when markets are hot or cold, is a tough thing to do. However, it can deliver solid returns.
Africa's largest data centre facility coming soon
Vantage Data Centers plans to invest over R15bn for its first African data centre facility in Attacq’s Waterfall City.
