Dear Readers,

Welcome to the April issue of the Views newsletter.

The end of March saw two much-awaited decisions being made in South Africa’s favour and providing more certainty to markets. The first was Moody’s decision not to downgrade SA’s credit ratings but change the negative outlook to stable, which boosted sentiment. The second decision came from the SARB, whose Monetary Policy Committee voted to cut rates by 25 bps (as anticipated) due to lower inflation forecasts, expectations and perceived inflation risks. However, it is unclear at this point whether the SARB will cut rates again this year, as the country’s inflation levels, though low, are still not close to the 4.5% expected by the bank. Nevertheless, the positive sentiment initiated by the inauguration of President Cyril Ramaphosa continues to gain momentum.

This momentum is beginning to reveal itself in the data. In a short but punchy post, Dwaine van Vuuren shows that foreign net purchases of SA equities and government bonds have finally entered positive territory, indicating that the JSE is in a new bull market and setting the stage for economic recovery. This indicator has proven itself extremely useful to Dwaine in predicting good or bad times for local shares - find out why below:

The Ramaphosa Bull Market

28 February 2018 | Dwaine van Vuuren Net purchases of JSE equities and SA government bonds by foreigners are signalling a new JSE bull market. Read more >

Turning to personal finance, if you’re not satisfied with the results of your trading strategy despite the improving economic environment, perhaps it’s time to take a closer look at how you are making your investment decisions. In his article below, Stephan Maritz shares five of the most frequent (and often surprising) mistakes made by investors - avoiding them could make a significant difference to your success...

5 Biggest Trading Mistakes

5 March 2018 | Stephan Maritz Some of the most common mistakes made by traders - and how to avoid them. Read more >

Last but not least, we feature two of Ian Stiglingh’s recent posts on equity funds. In part 1, Ian takes a closer look at the debate on whether to invest in actively managed funds or passive index-tracking funds, and unpacks the statistics used to pick a winner. Factors such as performance, return, risk and investment horizon are not always clearly defined and directly comparable. In part 2, Ian digs deeper into risk-adjusted performance and compares active and passive equity funds within the ASISA South African Equity General category. The results may inspire you to adjust your portfolio away from exclusively favouring one type over the other.

Let’s Talk Equity Funds: Part 1

7 March 2018 | Ian Stiglingh When talking about active vs. passive, are we quoting the right numbers? Read more >

 

Let’s Talk Equity Funds: Part 2

28 March 2018 | Ian Stiglingh How to measure the performance of active vs. passive investments. Read more >

Wishing you a successful month on the markets.

Natalie Mayer

Editor

[email protected]

Source: Tafta.org.za, 2018

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