CityPress - - Business -

In­vestors have con­tended with Brexit (the UK giv­ing for­mal no­tice to leave the EU), the elec­tion of Don­ald Trump in the US and, lo­cally, a Cabi­net reshuf­fle last week that was fol­lowed by S&P Global’s de­ci­sion to down­grade South Africa to “junk” sta­tus. How­ever, in the midst of all this po­lit­i­cal tur­moil, the key is not to panic and switch in­vest­ments if they are per­form­ing poorly be­cause of these shocks. Switch­ing when you are emo­tional could lose you money.

Dave Mohr, a chief in­vest­ment strate­gist, and Izak Oden­daal, an in­vest­ment strate­gist for Old Mu­tual Multi-Man­agers, said: “Such events al­ways evoke strong emo­tions, even among sea­soned in­vest­ment pro­fes­sion­als. But mak­ing in­vest­ment de­ci­sions based on emo­tions is al­most al­ways the wrong thing to do.”

They added: “The best de­fence is ap­pro­pri­ate di­ver­si­fi­ca­tion. It might feel safer flee­ing to cash or tak­ing all your as­sets off­shore, but such con­cen­trated, fear­ful port­fo­lios typ­i­cally do not de­liver the de­sired out­come over time.”

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