Financially Speaking February 2009

“On windy or wet days, the first adjustment you should make is a mental one.” – Gary Player

Dear Client,

[NB: any client still wishing to make an additional contribution to their retirement annuity for this tax year, the deposit has to reflect in Allan Gray’s account on Friday this week. Not Saturday. This means transfers or deposits must happen tonight or tomorrow morning.]

Investment issues:

I noted with interest how the JSE went below 19 000 yesterday. My thoughts to myself were that I hoped it stayed down for the next couple of days while my own personal additional contribution to my retirement annuity was invested by Allan Gray.

The thing is that I am still battling to help some clients understand that the markets are at very attractive prices for going into, or investing into, at the moment. Somehow I have not utilized my teaching skills well enough. Or they have got rusty. Too many clients are wanting to stop their investing processes to wait until things improve. I actually re-started some of my debit orders after the big drops of last year.

I read an article earlier this week where the writer suggested that we were experiencing the buying opportunities of the generation. Maybe he’s right, time will tell. Too many clients are wanting to see markets, and their resultant unit trust values, go up before investing again. This is the first really big drop in markets that I have experienced since being in this industry. I have now seen what people have often said; ‘investors want to sell at the bottom and buy at the top.’ It’s like a house: you should want to buy when they’re cheap and sell when they’re expensive.

Things might get worse before they get better, analysts agree on that. But get better it will and most bull markets start in a recession.

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.