2018 proved to be a difficult year for investors. Most asset classes finished the year in negative territory and the misguided impression for long term investors to capitulate and move into cash has become greater. We urge you to resist for many reasons.
South Africa continues to struggle through a low growth environment. We are slowly realising and adjusting to the fact that there is much more needed than a change of leadership before we see some traction in our economy. In saying that, President Ramaphosa has made moves in the right direction to turn things around. The big question is how the severe structural damage caused by the Zuma era has affected the ability to turn things around. The presidential elections later this year as well as the land debate will no doubt create a lot of political noise and market volatility as investors find their feet. Read more
Your ability to earn an income is arguably your most important asset.
Injury, Illness or disability can occur suddenly and affect your ability to earn an income. As a result, you may be unable to pay for your living expenses to maintain your desired lifestyle. Your savings and investment contributions will also potentially cease and as a result will negatively impact the success of your retirement plan.
Tax Free Savings Accounts became available to South African investors in 2015. In the long-term a tax-free savings account provides a significant benefit as income earned from the underlying investments is tax free and any capital gains when selling units will not trigger a capital gains tax event. So, if you are already paying income or capital gains tax or looking to save towards retirement a Tax-Free Savings Account may be a suitable investment vehicle to utilise.