Financially Speaking December 2008 #1

Be kinder than necessary, for everyone you meet is fighting some kind of battle.

Dear Client,

How important decisions are made!!!!!!!!!!!!!!!! :


What should investors be doing?

These are extraordinary times to say the least. Probably (and hopefully) more extraordinary times than investors will see again in their lifetime. During times such as these, there is an extremely high risk of ‘investment whiplash’, and investors need to be very wary of making extreme portfolio adjustments during current conditions, as the chance of selling/buying at the wrong time is significantly heightened. It is worth remembering that losses on a portfolio are paper losses until the moment investors sell and these losses are actually realised. With time, these losses will be erased.

Similarly, if tempted to buy, there are significant opportunities out there. However, investors should look to have at least a five year investment horizon. There is a lot of money sitting on the sidelines trying to time the bottom to signal their buy-in. Similarly, there is a lot of money terrified of further losses and which simply cannot afford to lose more, hence the volatility. The bottom, when it comes, may be with us for a while – so there should be plenty of opportunity to phase funds into the market when it eventually stabilises.

– Jeremy Gardiner. Director Investec Asset Management

Until next time

Please note that all the views expressed in this publication are based on my opinion and no action or advice is implied or intended.