Half year market update

Despite all the doom and gloom in 2017, the JSE ALSI returned 20.95% last year. Heading into 2018 there was a sense of excitement with every South African feeling a sense of “Ramaphoria”. Sadly the rally around this new found sense of optimism has seemed to run out of steam. As at the 31^st of May the JSE ALSI had declined by 4.4% giving back a large part of the gains from last year. Along with the drop in the market we have also seen the rather rapid decline in the value of the rand going from almost R12 to the dollar to now almost R14.

The South African market is heavily influenced by world events and all the uncertainty regarding Trade Wars has negatively affected the domestic market. Over the past three years we have been positioning our clients’ funds into more conservative portfolios. These more conservative funds have been far less volatile than that of the market and have given investors a return of between 7 – 10% over the last year. It is very hard to predict what the future; or Donald Trump has in store for us and so we remain of the view that investors should remain cautious in the current investment climate.

Please contact us should you wish to arrange a meeting to discuss your portfolio and its positioning. We will be happy to discuss this over a cup of coffee.

When should you consider Critical illness cover?

Critical illness cover offers you financial protection should you be diagnosed with or require treatment for an illness which is deemed ‘critical’. On average 80% of all claims are from the four major critical illnesses; heart attacks, strokes, coronary artery by-pass graft and cancer.

The benefits of having Critical illness cover in place are that it allows the insured to be able to fund one or more of the following:

Pay for the costs of medical care and treatment
Replace any lost income due to a decreasing ability to earn
Provide the insured with enough funds to cater for a change in lifestyle

Clients often forego Critical illness cover owing to the price of this cover compared with life insurance or disability insurance. However statistics show that a male under the age of 25 who is a non-smoker has a 24% chance of getting cancer, having a stroke or a heart attack before he reaches the age of 65. 34% of all critical illness claims made by males occur before the age of 55.

With the advancement of medical technology, more and more people are fully recovering from these critical illnesses, however the medical bills associated with these illnesses are not always covered by your medical aid. With this in mind it is important to consider how your life would be impacted should you or a loved one be diagnosed with a critical illness?

Fund of the month: Investec Diversified Income Fund

The Fund of this month is the Investec Diversified Income Fund. This is an income generating fund that is suitable for investors whose primary focus is on receiving an income but also looking to maximise capital. This Fund returned 9.5% over the last year and a return of 8.8% over the previous three years.

The link below provides a quick description and investment philosophy of the Fund.

Investec Diversified Income Fund Philosophy