Why Cash Can Be the Riskiest Asset of All
I have mentioned on this blog before that timing the market can be costly “Why Timing the Market Can Be Very Costly” and why it is better to stay invested rather than trying to time the markets “Staying Invested Vs Timing the Markets”.
In this Moneyweb article, Patrick Cairns argues that cash can be the riskiest asset of all because one needs to be exposed to higher growth assets such as equities and listed property in order to produce inflation beating returns “Why Cash Can Be the Riskiest Asset of All”.
The Problem with Cryptocurrencies
Cryptocurrencies like Bitcoin and Etherium (see article “Demystifying Virtual Currencies”) have generated a great deal of interest because of their spectacular gains (and losses). Investors are trying to determine if cryptocurrencies are an investment opportunity, a bubble or the end of money as we know it. In his considered and detailed report Brandon Zietsman, CEO of PortfolioMetrix, argues that when investing in cryptocurrencies one needs to be clear-headed about the risks (a view with which I concur). Click here to read the article.
JSE All Share (ALSI) Performance Is Being Driven by a Handful of Shares
ALSI performance driven by a handful of shares.
Stripping out Naspers, British American Tobacco and SAB/Anheuser tells a different story. (click on the graph to enlarge)
Source: Coronation Fund Managers
Hurry up and Wait!
(An argument for sitting tight when the news is bad…)
While it is true that no one has a crystal ball for financial markets, there is some interesting research available that shows what has happened in the past during difficult times. Arguably, this research illustrates the point that often, the smartest thing to do is to wait! (click on the graph to enlarge)
Why stay invested?