Compliments of the season to you all.
So those who thought that the end of 2020 would see everything going back to “NORMAL”, welcome to the clearly abnormal 2021. The year has started on an interesting note, we have had Bison Bear Man and his mates storming the “bastion of democracy”, we have had stock markets doing extremely well despite the tsunami sized second wave that has hit our shores, we have had our President waxing lyrical about 20 million vaccines with no details of how government will manage to implement this mammoth task and finally we have seen emerging market currencies weakening due to the “risk off” trade caused by problems in the world’s largest developed market ?? This was all in the first two weeks!
The start of this year has highlighted the importance of having a plan which has been well thought out and which is supported by a diversified base of assets. The “noise” in the media has been incredible, from Trumps social media ban (I do find it scary that the “powers that be” have decided that the man with the codes to the US’s nuclear arsenal is not fit to have a Facebook, Twitter or Instagram account), to the total swings and roundabouts regarding vaccines, virus strains, the origins of these strains and how sea sand seems to be the root cause of South Africa’s COVID-19 outbreak, have played havoc with our psyche and attitude. The fact is, that despite all of the noise, if you remained invested in the markets over the last crazy year you would have done fairly well. One area of concern however has been those people who have stayed away from the market and stayed in short term banking products, the dramatic fall in interest rates has made these products extremely unattractive over the medium and long term.
So, what is our takeaway looking forward to 2021? Firstly you need a plan, secondly you need to ignore the noise and stick to the plan and lastly you need to stay away from anybody who tells you what is going to happen next (it is amazing how many people with great sources inside government have got how lockdown will be implemented wrong), let alone trying to predict where the Rand, the markets (yes even Bitcoin) is going to be in the next month, six months or year.
Stay safe, stay off the beaches (unless you have a fishing rod with you, somehow Covid seems to be dissipated by the presence of fishing rods) and stay focused on the things that you can control in 2021.
CFP® CA (SA)