In turbulent times, it is important to step away from the noise and to consider how various asset classes will perform in the future.
Graham Tucker, portfolio manager of the Old Mutual Balanced Fund in Old Mutual Investment Group’s MacroSolutions boutique, pointed me recently to the latest edition of Long Term Perspectives, a study compiled annually by him and several of his high-powered market analysts.
A superb product, it scrutinises the performance and behaviour of select asset classes over the past 87 years or more.
In no particular order, these are some of the analysts’ main insights:
INFLATION IS YOUR ENEMY: If you hold R10 000 cash today at a 6% inflation rate, the sum will be worth only R5 584 in 10 years, and R3 118 in 20 years.
TIME NEEDED TO DOUBLE YOUR MONEY: Using each asset class’s long-term average return, it will take you 10 years to double your equities’ real investment value; 41 years to double your SA bonds’ real value; and 90 years to double the real value of your cash holdings.
EQUITIES ARE NEEDED TO GROW LONG-TERM WEALTH: The main reason many investors prefer cash to equities is the fear of losing money. The reality, however, is that during the past 87 years nominal returns of equities grew an average 14% a year, South African bonds 7.8% and local cash 6.9%.
Esta historia es de la edición 8 June 2017 de Finweek English.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición 8 June 2017 de Finweek English.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
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.
