Don’t delay, be prepared

Last summer, Cape Town narrowly avoided a “Day Zero” scenario. The prospects of taps running dry (together with the measures taken), can teach us important financial lessons.

The JSE is currently caught up in an economic “drought”. The FTSE/JSE All Share Index was down 8% over 12 months and down 9% year to date (to end October). Everyone’s asking: How long still, before it starts raining?

‘Drought’ realities

As an emerging market, SA is prone to extreme market “weather”. Poor economic performance from poor political leadership has severely compromised its credibility and stability as a foreign investment destination.

Prepare for financial droughts

Market returns come in unpredictable cycles.

Understanding that financial returns are often intermittent, will help you prepare a more holistic long-term plan for all seasons.

Moneyweb

SA may no longer be a global mining force, but you wouldn’t know it looking at the JSE Resources Index (Resi) – up 100% in US dollar terms over three years.

The performance was even better among diversified mining stocks like Glencore, African Rainbow Minerals, BHP Billiton and Anglo American, up 200% to 300% since late 2015.

But the gains were less impressive for gold and platinum single-commodity