Good time to invest – at long last

SIX years. For six years our economy has been on a one-way trip to nowhere.

The euphoria of the 2010 World Cup overshadowed the initial damage a President Jacob Zuma “economic” – or lack of economic – policy was doing to South Africa.

The cracks were certainly visible afterward. What followed were six solid years of indecision, stalemate, an economy going nowhere.

People often ask me, as a financial adviser and fund manager, what data they should research when they want to invest.

And time after time I tell people that in South Africa, psychology, politics and technology are just as important as economic and market data.

Because of that personal philosophy of mine I generally tend to monitor social and political trends as much as I monitor numbers and economic data.

It is also key to monitor trends and to know one’s history. While taking these factors into account, for the following reasons, this is how I see 2017 shaping up:

ý Psychology: for the past six years we have had a different “gate” at the end of every year – from Guptagate and Nkandlagate to Nenegate, each tiring year has ended on a major low, with all citizens and business owners feeling at a loss and dreading the beginning of the following year.

Last year, was the first in six years that South Africans had a genuinely stable yearend, followed by a peaceful, energising Christmas holiday.

ý Social: two years of every “Something Must Fall” protest and we are losing our patience and sympathy.

Protests are part of life in sunny SA . . . once things turn violent, we move on quickly once we lose sympathy.

There will be protests this year, but I believe they will be different. Desperate even.

ý Political: Zuma is not gone. However, his power is certainly waning. But he is a streetfighter who fights best when in a corner. He has had several damaging judgments against him, his friends and favours are diminishing and he will no longer be ANC president in less than 12 months’ time. He is yet not a spent force, he can do some damage, but there is light at the end of the tunnel.

ý Economics: so far the JSE is at the same level it was two years ago.

It was overvalued . . . now, with a more stable economic climate, stable electricity supply, higher rainfall, lower food inflation forecast and a potentially stronger rand, I believe the JSE is at fair to below value.

As far as global markets go and as an entrance into Africa, I believe our domestic markets have fair value. For now, the climate and outlook seem fair.

These are excellent economic conditions to start a year, for companies to dust off their Capex plans and for business and the economy to grow.

As with all cycles, you need to know when to invest. I believe this is the best time in six years for investors to make that decision.

In the spirit of the great Buzz Lightyear, please excuse me if I shout out: “To infinity and beyond!”

It’s about time we all started looking on the bright side.

Have a very happy 2017 and beyond.