We will remember 2016 as the year that even the bookies could not have called right. From Brexit to Trump, the world as we know it was not only challenged, but turned on its head. Even here in South Africa, having started the year in shock after the surprise removal of Finance Minister Nhlanhla Nene, few would have predicted that we would end 2016 having avoided – albeit narrowly – two credit rating downgrades.
Even if you knew with 100% certainty that Donald Trump would win the US election, you would not have expected markets to rally. Ironically, those who positioned their portfolios for a Clinton win would have fared better in the aftermath!
Local markets also delivered their share of surprises, with massive sector rotation taking place:
This year brings the Dutch, French and German elections, the Brexit deadline, Donald Trump’s first G20 meeting and the ANC conference. With a news line-up like this, we expect politics to continue weighing heavily on markets. However, we anticipate 2017 to be a year in which economics finally plays a more meaningful role in driving returns.
While we don’t expect seismic political shifts of the order of 2016, we would urge investors to separate fact from opinion. When you make a decision, make sure you have the evidence to back it up. Our Taking Stock event, planned for the end of February with Jeremy Gardiner and Rob Forsyth, aims to provide you with as much information as possible to assist with decision-making.
We have all witnessed how quickly things can change and how difficult it is to get market, asset allocation and currency calls right. Once again, I would like to reiterate a key message: constructing portfolios for the long term remains critical in securing your clients’ financial future.
We trust you enjoy the read and, as always, wish to thank you for your continued support.
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