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Investing is a patience game

John Campbell

Chief Executive Officer
Chartered Wealth Solutions

I find it hard to believe that it was only a month ago when I shared with clients around the country the positive 2019 market returns. Jeremy Gardiner spoke about the global economic and political arena. He touched on the Coronavirus and the chaos it was causing in China. This virus to us was foreign, probably not dissimilar to Ebola and SARS. In the space of weeks this disease spread across the world, we were the 79th country to have our first case, and now we are one of 168 countries around the globe who are dealing with this pandemic.

With this genuine scare and rapid infection rate comes panic; not only is it a deadly virus, but it is on our doorsteps and a very real threat to us all. Every three days, the figure of those infected doubles, which has seen SA go from 1 case on the 5th March to 927 cases 3 weeks later. These figures alone justify the extreme lockdown which our President has imposed. Fellow South Africans have justifiably applauded him, and he stands out above many of the leaders of the largest economies in the world, including the US and UK, who have not moved as swiftly.

Our lives are all impacted in many ways, and for most of us, fear and uncertainty prevail. Many employees have lost their jobs, and most South Africans have lost their job security. Calling our team in, and sharing what this potentially means for Chartered, was the hardest day of my 26-year career.

I must commend our clients on how they have handled the news over the past three weeks. Personally, as an avid reader of current affairs, it has been challenging to keep one’s wits about one’s self. The panic and extreme uncertainty have created a very volatile market, every week, new records are broken both in upward and downward swings.

So, where does this leave us all today? We have seen our JSE come off 31% from a high to a low this past month, as of today, 25th March, the market has recovered almost 17% from the low, all in the last three days. This rebound could be a great example of the initial panic selling. Then slowly, sense has prevailed, supported by quantitative easing by the government. I don’t think we are out of the woods yet, but let’s bank this week as a good week. The rand has weakened by approximately 14% over the last month. This depreciation has helped cushion the blow from international markets, which have not been as impacted as our local market.

In Summary, no one knows whether our market will be up or down today, tomorrow, or the next. Our investment consultants, Portfoliometrix and Old Mutual Multi Managers, decide on your asset allocations. They then choose fund managers to manage the various asset classes, being bonds, property and equities. These investment managers are doing all the work in which we feel so eager to meddle. When stock markets go down, they always go back up. Investing is a patience game, sit tight, we will get through this.

Wishing you good health as you spend the next 21 days in your homes. All the staff at Chartered are working from home, and we are here to assist you wherever possible.

All the best