The Navigator is Anchor’s quarterly review of the major themes affecting markets and gives an overview of our current Strategy and Asset Allocation. Click here for the full document.
The purpose of The Navigator is to provide our clients with insight into Anchor’s thoughts on various asset classes and our near-term market outlook.
“The numbers are turning into names, and those names are people we know.”
Such was a poignant meme that appeared on my phone, pleading with people to mask up and not to drop their guard against health standards that are designed to slow the spread of the virus. Sadly, for me, as for many South Africans, this is true. The names are people we know.
As we write this report, there is discussions around increasing the lockdown restrictions in South Africa. In reality, the lockdown discussion is moot. As this virus is getting closer to those we know, South Africans are responding of their own accord. Shopping centres are emptier than a month ago, and the streets were eerily quiet this morning. Social distancing is becoming a way of life once again. In the short term, this will hopefully slow the virus, though it certainly is going to slow the economy.
Early January also marked the announcement that the first 1.5mn doses of the vaccine are on the way to SA, with more to follow. We are starting the recovery process. This year promises to have its share of surprises, however, overall, we expect that both the domestic and the global economy will end the year stronger than when we started. 2021 is the year of recovery.
A base message from Anchor has been that investors should externalise a significant portion of their assets. This remains our view and we espouse increasing global assets when conditions warrant such a change. By most measures, global equity markets are expensive and have priced in a relatively rosy scenario regarding the recovery. There is certainly some possible upside to holding global equities, however, one must be cognisant of the risks, which have been growing.
Our investment view therefore is that investors who have inadequate global exposure should seek to top this up sooner rather than later even though they may need to stomach more near-term volatility. For those investors that have adequate global exposure our view is that they should continue to look for opportunities to top up their global exposure. Perhaps for such investors, patience is advisable right now. We are watching for opportunities to externalise wealth and we will continue to communicate these. Each individual situation is unique, and we implore you to work with your advisor to identify the plan that is most suitable for yourself.
We start 2021 with optimism for a better outcome in the end. We know, however, that the year will have some surprises in store for us. These will throw out opportunities for your investments and for implementation of your long-term plans. We look forward to working with you to achieve your investment goals.
The key to successful management of your wealth is an ability to understand the changes to the world in which we live and to adjust (when necessary) your investment portfolios accordingly. As a boutique asset manager, we can navigate these twists and turns of global developments more readily and our team of experienced investment professionals are ideally suited to understand and react to a rapidly changing environment as we pursue exceptional investment outcomes for our clients.
For the full report and our views on each asset class, click here.
