This locally little known fund is ranked 1st out of all unit trust funds over 7 years.
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Our lives have changed so dramatically since the end of March that it’s hard to remember a time when hand washing, mask wearing, and social distancing weren’t top of mind. These important science-proven behaviours will help keep you and your loved ones safe, so we need to keep doing them. Even if we’re feeling corona fatigue. Here’s how we can fight the spread of COVID-19 together. By now we all know how COVID-19 is spread – through droplets in the air from infected people (whether they show symptoms or not) or from touching your face, eyes or mouth after coming into contact with a contaminated surface. With the COVID-19 infection rate on the rise and South Africa ranking high on the list of most confirmed cases globally, the need to prioritise non-pharmaceutical interventions to fight the pandemic is becoming more and more important – every day. DID YOU KNOW that by simply talking out loud for 1 minute, you create over 1 000 droplets that stay airborne for up to 14 minutes? While we wait for a vaccine for this virus, the World Health Organization recommends avoiding the 3 Cs and continuing to practise healthy habits: Crowded places Spaces with a large number of people where social distancing is not possible Example: At a funeral Close-contact settings Places or situations where people have close-range conversations Example: Inside a restaurant Confined spaces Spaces with poor ventilation, regardless of the size of the area Example: In an elevator Practising healthy habits Building these simple, yet powerful healthy habits is key to protecting yourself, your loved ones and even your fellow South Africans: • Practise social distancing Deliberately maintain a distance of at least 1.5 metres away from others to protect against liquid droplets that may contain the virus if someone coughs, sneezes, or speaks near you. Here is everything you need to know about social distancing. TOP TIP: Teach your children about social distancing. Need something fun to remember to social distance yourself? Picture a distance of 2 hadeda birds OR 3 penguins OR 1 small shark or 1 cow between you and the next person. • Keep washing those hands Wash your hands throughout the day for at least 20 seconds with soap and water or use an alcohol-based hand sanitiser. This helps reduce the chance of the virus being transmitted. Read these tips on how to wash your hands the right way. TOP TIP: Hum the ‘Happy birthday’ song (with the tap turned off!) while you are washing your hands to time the 20 seconds right. • Never leave home without your face mask Treat your face mask as you do your favourite underwear. You want them clean, without holes and fitting you snugly without the need to constantly readjust them. Find out the dos and don’ts of wearing a face mask. TOP TIP: Keep your masks right by the entrance to your home so that you cannot open the door to leave without seeing them. Keep reminding yourself that we have the power to prevent COVID-19 through healthy and responsible behaviours. Your family, friends, community, colleagues, and country is counting on you. Stay home, stay healthy and help save lives. Source: Discovery South African Market Update The South African equity market also moved higher in the month, however, local equities lagged other emerging markets, which rallied significantly during July. The local market was weighed down by weak performance from some large industrial index constituents. There was divergent performance from a sector perspective, with resources (particularly gold and platinum counters) being the most significant driver of positive performance. Local bonds ended the month higher, supported by the attractive yields on offer relative to the declining yields on cash, subsequent to the interest rate cuts by the South African Reserve Bank (SARB) of 3% since the start of the year. Local listed property had a poor month, with disappointing company earnings updates and concerns around the prospects of physical property as an asset class acting as headwinds for the sector. Broad US dollar weakness was supportive of the prospects of the rand against the greenback, while the local currency gave up some ground against both the euro and the pound sterling. South African Economic Update The SARB cut the repo rate by another 0.25% at the July Monetary Policy Committee (MPC) meeting, revising down its inflation and growth forecasts at the same time. This brings the policy rate to a level of 3.5%, its lowest in close to 50 years. SA headline CPI rose to a year-on-year figure of 2.2% to the end of June (from 2.1% in May), well below the midpoint of the target range of 4.5%. SA’s terms of trade continued to improve in June, with the trade balance widening further to a surplus of R47 billion (the largest since January 1990), as exports jumped 10% to R116 billion and imports fell 19% to R70 billion. Chart of the month: The performance of the US equity market year-to-date has been largely driven by those companies with the biggest market. See below for a summary of the key market movements for the month of July:
Source: Morningstar Markets continued to climb higher in July, as investors shrugged off poor economic data releases and company earnings announcements, preferring to focus on the substantial liquidity injected by major central banks and governments across the globe. In a continuation of the recent trend, it was the large American listed technology companies that drove equity markets higher, with Facebook, Apple, Amazon and Alphabet (Google) all beating Q2 2020 earnings expectations. Economic data released in July was far less impressive, with US GDP contracting by around 33% on an annualised basis for Q2 2020, the largest contraction in close to 80 years. Source: Morningstar Did you Know! That when you leave a medical aid as a member on Medical aid savings plan, as a member you have the following options • To request the refund which normally gets refunded back in 4 to 5 month • Members can request early payment on their Medical Aid Savings if they have financial problems, but they need to guarantee the scheme that should any claims arise after that they will be held accountable. • To request a transfer of Medical aid savings if they will be joining another medical aid that has the same component, Medical aid savings The other thing that members should know about their Medical aid savings - is that it works like a bank account, What you do not spend you carry over to the next year. But members needs to make sure they are on the New Generation scheme , options that offer Medical Aid savings not the Traditional scheme. Member can refer to their scheme website as the is different terms and conditions. If you have any queries regarding your medical aid, please contact Namhla in our Health Department, email health@daberistic.com , tel (011)658-1333 As we emerge from the stringent lockdown restrictions of the past 100 plus days, many of us are now facing a world that looks quite different from what we were used to merely months ago. For many of us, things have changed drastically, especially financially. Countless individuals have been faced with and/or might still face retrenchment, having to take unpaid leave, drastic salary cuts or the possibility of losing their business. This reality hits home hard. Due to the unforeseen and devastating aftermath of the Covid-19 pandemic, many individuals have been forced to tap into their savings. The current circumstances have made people acutely aware of how important it is to have an emergency fund and/or contingency plan. With this in mind, let’s unpack the famous words of the well-known investor, Howard Marks: “you can’t predict but you can prepare”. Prediction is a fool’s game The first point to highlight is that trying to predict the market is fool’s game, however, it is human nature to try to find comfort in some sort of prediction of an outcome. This is because humans like to think they know what is going to happen next. Using a very simple mathematical example, the below equation illustrates how the odds are against you when trying to predict an outcome. Firstly, you have to predict the event correctly, and secondly, you have to predict how the market will react as a result of the event. If you don’t get both right you won’t be able to capitalize on the opportunity. Let’s say you are exceptionally good at predicting and you get it right 70% of the time, the odds are still the same as flipping a coin. Probability of predicting the event correctly x Probability of predicting the market’s reaction correctly = 70% * 70% = 49% (same odds as flipping a coin) The table below details two examples of recent events that an investor could have predicted accurately, but most people got the second prediction - how the markets will react – wrong. As we reflect on the events of the past couple of months, one thing is certain: it was impossible
to predict the events that have unfolded this year and the resulted reaction of markets, governments and economies. The only thing we can do is to do our best to prepare for times like these. Preparing for the unknown In a world filled with randomness and uncertainty a far better strategy than to prepare for the unknown is to focus on the known. What is known is that there are three primary drivers of results in life: 1) Your luck (randomness). 2) Your strategy (choices). 3) Your actions (habits). Only two of these three drivers are within your control – your strategy and your actions. By focusing your efforts on your choices and habits, you take ownership of your finances, instead of leaving it up to chance. The best way to prepare for these unknown and unprecedented times is to build up a nest egg. The most obvious way of doing this is by saving and taking advantage of the power of compounding. In the words of Warren Buffett – “Do not save what is left after spending but spend what is left after saving”. Unfortunately, many investors tend to spend first and save what is left. Often these investors also make the mistake of not saving the little that is left, as they believe it won’t make a difference. In January 2020, Victoria Reuvers, managing director of Morningstar Investment Management South Africa wrote an article in which she shows that anyone has the ability to become a millionaire. What it requires are two simple, but not easy, habits – firstly, start and stick to the habit of saving and secondly, be patient. Most investors’ path to becoming a millionaire is not by investing in the next big thing and making a quick buck overnight. For most of us, it is about building good habits and being disciplined when it comes to saving - even if it is just R200 a month. We encourage investors to use July as an opportunity to re-think their budget, savings and spending habits and encourage their children to practice good habits from a young age. Think about a good savings habit like brushing your teeth. Twice a day for two minutes is all it takes, and although it may not feel like a big action at the time, the long-term positive effects are enormous. The problem when you don’t do it is that you only see the damage your poor habits have caused after a long period of time. Some practical ideas to start saving In South Africa, you can save R36,000 per annum in a tax-free savings account, and a maximum of R500,000 over a lifetime. This is probably the easiest vehicle to ensure you get the benefit of investment returns without the concern of a tax bill at the end of the financial year. Another effortless way to save is to set up a monthly debit order to an investment account. Not only do you then save first and spend after saving, but you also have the option to increase this amount annually and/or make lump sum contributions as well. Other tips to start saving money every month:
month. Don’t ever think that it is too little to have an impact. There is a lot of power in compounding value. Conclusion In unusual times like these, investors might feel vulnerable and powerless. But it is often during times like these that we should try to form new healthy habits and leave behind bad habits. Let’s try to kick the practice of trying to predict everything and kickstart the habit of saving, even if only in small increments. To set up an appointment with a Financial Planners, please contact Kevin, email: invest@daberistic.com tel no: (011 658-1333) Written by: Debra Slabber Source: Morningstar Client's question: By adding a specific item to be insured, e.g. a R60K projector, does it mean a higher insurance premium? VS insured as a general contents lump sum? Answer: Electronic equipment ALWAYS have to be insured on a specified basis under the Electronic Equipment section. This section has extension suitable for data processing equipment. For items like Projector and Microphone, they can either be insured under Electronic Equipment or All Risk, but All Risk can be recommended as these items do not require the extensions offered under the Electronic Equipment. Secondly, Santam now offers various options under the All Risk section (e.g. Portable items that only stay on the premise), which attracts a lower rate. (These are the options we also discussed in our meeting) General contents under the Fire section is just for everything else such as furniture, fittings, stock etc. Additional fitting such as Aircon, Signage, Generators should be specified under the Fire section. If you would like to get a quote to cover your Equipment, please contact Edmond or Marizka in our Short-Term department, email shortterm@daberistic.com, tel (011)658-1333 Source: Santam |
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