Experts have this week urged investors and wealth managers -local and international – to better understand South Africa’s current political changes in order to be able to make wise decisions about the economy.
Speaking in Cape Town (South Africa) this week, Carol Axten, CEO of WellsFaber, said it was absolutely critical that wealth managers and investors continually keep abreast of any developments and trends that take place in the local and international markets.
Recent local elections have brought the ruling ANC down to its knees in major cities across South Africa, where well-informed taxpayers have long been complaining of mounting corruption, abuse of power and poor service delivery.
The important learnings that can be taken out of this unexpected shift in balance of power can be applied to how people respond to market movements going forward, she said.
As the future of South Africa and its economy remains uncertain, Axten reiterated by understanding the various challenges and opportunities in South Africa and abroad, investors will be better positioned to navigate the complexity of the financial markets.
“Knowledge is not only power, but it’s also the foundation for intelligent, well considered decisions when it comes to financial planning and investing,” she said.
The ruling ANC’s defeat in areas it used to lead unchallenged is said to have generated ‘hidden’ factions and serious internal disputes, which many experts believe could further dent its performance in future elections.
Will the ANC suffer another major blow in 2019? Time will tell.
But with the geopolitical landscape changing rapidly, Axten believes that 2016 may well turn out to be a defining year in the history of global geopolitics.
“How this will impact financial markets remains to be seen, and we watch with great interest to see how events unfold and the impact they will have.”
Therefore, she warned investors and wealth managers against making short-term changes to an investment strategy when markets become choppy.
This, she said, could easily become a recipe for disaster.
“Selling investments after their value falls locks in losses and often means missing the early gains in any recovery, which can be significant,” she pointed out.
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