The Personal Finance series with Warren Ingram

How to plan for the inevitable political uncertainty of the next 24 months

FILE: President Jacob Zuma with Deputy President Cyril Ramaphosa and former AU Chair Nkosaza Dlamini-Zuma during the 60th Anniversary of the National Women's Day celebrations at the Union Buildings, Pretoria. Picture: GCIS.

Investing in anticipation of political events is always very tricky.

The outcomes are uncertain and binary (i.e. a winner and a loser).

If you want to profit from investing in an election you have to:

  • Predict the outcome correctly.

  • Anticipate what other people would have predicted – most people might be wrong.

  • Predict how investment markets will react.

This is nearly impossible, as we saw with Brexit and the US election of Donald Trump.

Most people did not anticipate Trump would win, yet markets reacted positively.

It’s advisable to rather do scenario planning, said Galileo Capital Personal Financial Advisor Warren Ingram on Bruce Whitfield’s The Money Show.

Ingram explained…

What are the three or four most likely outcomes to an election?

For example - December's ANC elective conference:

  • Nkosazana Dlamini Zuma wins: Markets will be negative, ratings agencies will be negative, politics divided. Long-term markets might anticipate a new governing coalition in 2019 which could be positive.

  • Cyril Ramaphosa wins: Markets positive, sentiment is positive. Long term questions will be asked about compromises made to win the election.

  • A neutral candidate wins: Markets will need to understand the candidate, will wait to see his new Cabinet and watch speeches very carefully for signs of things to come.

Currently, South Africa might be in a better position than 12 months ago.

Much of the rot is being exposed and, hopefully, stalled.

International firms (e.g. KPMG, McKinsey, Bell Pottinger) are being held accountable.

Should we be doing anything to “prepare ourselves”?

Should we send money offshore as a balancing factor to some negative scenarios?

Watch the exchange rate carefully at R13.50, said Ingram.

For more detail; listen to the interview in the audio below (and/or scroll down for quotes from it).

The JSE will jump very quickly if the good guys win.

Warren Ingram, Galileo Capital Financial Advisor

South African property companies… there’s been so much bad news… they’re offering attractive yields… it would be silly to avoid that…

Warren Ingram, Galileo Capital Financial Advisor

Click here (then “like” the page) to follow Bruce on Facebook.

Enter your email address in the form below to receive a newsletter containing the most-read articles of the week from Bruce Whitfield’s The Money Show every Friday morning in your inbox.

Subscribe to our Business Wrap Newsletter


This article first appeared on 702 : How to plan for the inevitable political uncertainty of the next 24 months


Recommended

by THE NEWSROOM

CapeTalk welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the CapeTalk community a safe and welcoming space for all.

CapeTalk reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

CapeTalk is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
Strategies for reducing your exposure to Naspers

Strategies for reducing your exposure to Naspers

Naspers constitutes a whopping 20% of the Top 40 index. Bruce Whitfield interviews Personal Financial Advisor Warren Ingram.

Love cars? Here’s how to have fun, and keep your finances intact nonetheless

Love cars? Here’s how to have fun, and keep your finances intact nonetheless

Warren Ingram helps a listener who loves her cars, and asks how to combine a good lifestyle with proper financial planning.

What Cyril Ramaphosa means for your retirement fund and/or other investments

What Cyril Ramaphosa means for your retirement fund and/or other investments

The Money Show’s Bruce Whitfield interviews Galileo Capital Personal Financial Advisor Warren Ingram.

What you must learn from the Steinhoff and EOH share price collapses

What you must learn from the Steinhoff and EOH share price collapses

The Money Show’s Bruce Whitfield interviews Galileo Capital Personal Financial Advisor Warren Ingram.

Few retirement funds unaffected by Steinhoff implosion (i.e. you just got had)

Few retirement funds unaffected by Steinhoff implosion (i.e. you just got had)

Your money, and Steinhoff… Bruce Whitfield interviews Certified Financial Planner Peter Calitz.

Are you missing out? Bitcoin (‘Zimbabwean dollar in reverse’) revisited…

Are you missing out? Bitcoin (‘Zimbabwean dollar in reverse’) revisited…

The Money Show’s Bruce Whitfield interviews Personal Financial Advisor Warren Ingram.

Popular articles
[WATCH] Grootes's take on why EFF silent on Dlamini's SABC interview

[WATCH] Grootes's take on why EFF silent on Dlamini's SABC interview

702 Afternoon Drive host Stephen Grootes's comment involves past dealings that involve EFF national chair, Advocate Dali Mpofu.

Punitive tariff hike for water guzzlers to hit CT households where it hurts

Punitive tariff hike for water guzzlers to hit CT households where it hurts

Harsher punitive tariffs on the cards as 'Day Zero' becomes a reality as the result of 60% of Capetonians who ignore water limits.

Madiba’s private secretary Zelda la Grange opens up about money (hers and his)

Madiba’s private secretary Zelda la Grange opens up about money (hers and his)

Bruce Whitfield interviews La Grange about her and Madiba's attitude to money (hopes and fears, successes and failures, etc.)

WATCH: Innovative spray limits toilet flushes and saves water

WATCH: Innovative spray limits toilet flushes and saves water

Loo Me is a simple yet effective scented foam that takes the yuck out of "mellowing" toilets preventing multiple flushes.

I was not introduced to Ajay Gupta - Grootes

I was not introduced to Ajay Gupta - Grootes

Stephen Grootes says he believes former Eskom CEO Brian Dames when said he was not formally introduced to the Gupta family.

It's not the end of the road... Top tips to improve your matric

It's not the end of the road... Top tips to improve your matric

"Recognise that it’s not the end, it’s the beginning." Expert advise for school-leavers who want to improve their results.