Are You On The Right Track With Shares?

It is a good time to look at your portfolio to determine whether there are still good prospects, advises Schalk Louw.

- Schalk Louw

In 2017, I discussed two expressions that applied so well to the stock market at the time. The first was that it does not help for you to only be on the right track, because if you stay there, you will still get hit by a train. During these last few months, we have experienced high tides on the stock exchange, which brings me to my second expression: a high tide lifts all boats. What these two expressions have in common, is that it is always great to be on the right track or in the proverbial boat when the tide is rising, but things tend to become a little more complicated when, like what happened in 2017, all boats do not float as well as they should.

In short, 2017 marked the last time the FTSE/JSE All Share Index (JSE) experienced 20% or more growth in a calendar year. The JSE grew by 21% in 2017, to be exact. But if you thought it was high tide all the way just by looking at these growth figures, you would have been on the wrong track. If you dug a little deeper, you would have discovered that Naspers* was responsible for 14 percentage points of the total 21% growth, and if you were invested in all JSE shares in 2017, 30% of your portfolio would have delivered negative returns.