Recovery Time Where should you put your money?

With american investor sentiment at its highest in 30 years, and an appetite for risk back on the table, some analysts say it is time to “make money”. What is the optimal investment vehicle with which to grow your money?

- Mariam Isa

Battle-scarred investors are buoyed by prospects that global stock markets will deliver better returns this year despite continued political and policy uncertainty in the US, Europe and Britain and lingering doubts over China’s economic slowdown.

The breathtaking rally in US equities following the unexpected election of President Donald Trump in November has had ripple effects around the world and the prevailing view is that prospects are good for improved economic growth in many developed and emerging markets.

US investor sentiment has not been this positive since 1987, and global stocks measured by the MSCI World Index have hit a 19-month peak, while emerging markets are expected to put in a strong performance despite successive hikes in US interest rates.

Appetite for risk is firmly back on the table, and South African stocks are included on the menu – at least for upbeat fund managers willing to look through jitters past the ANC leadership election in December and focus instead on expectations for faster growth, lower inflation, and interest rate cuts in the second half of the year. The JSE closed 0.8% lower last year.

“We are more optimistic on risk asset returns in 2017 […] The political backdrop in SA is still very murky, but it seems like things will be less volatile than last year,” says Rhynhardt Roodt, a fund manager at Investec Asset Management.

“What is clear is that there is a broad-based cyclical recovery underway, not just in the US. There’s quite a change in market leadership – industrial companies tied to the real economy are taking over. It’s time to make money rather than preserve money.”