Tuesday, 19 February 2019

Run for Cover: My Budget Predictions

Our future hinges on tomorrow. The world will end if the Minister Mboweni's budget does not meet expectations of experts at Investec, Deutsche Bank, Goldman Sachs and [Insert big bank name here]. What will we do? Oh, how will we survive?

Got ya...  moving on. I can only write so much drivel.

While some may worry about how big the bailout is for SAA or how much funding Eskom needs, I prefer to focus on what I believe matters. Sure, Eskom imploding will be catastrophic but if your entire investment portfolio is destroyed because Eskom implodes, it is not Eskom that is the problem.

You see, we invest for multiple futures. We don't know which future will happen ahead of time. The trick is not to bet on any one future. Yes, you will look like a rock-star if you put everything you own into one possible future but you'll end up the street in all other futures. Personally, I'd like to put my odds in favour of avoiding the street.

So when the bad news comes tomorrow, sit back and repeat after me "Is my investment portfolio positioned correctly?". This means:

  • Exposure to majority real (or growth) assets (think shares, property)
  • A small cash buffer to get you through hard times
  • An appropriate exposure to offshore assets to protect yourself from all that state capture and land expropriation noise
Have a plan and then the noise remains just noise.

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