Crisis = Opportunity = Forward Looking
Market crisis over the last 25 years
Click on image to enlarge.
Source: Nedgroup Investments
Expected Asset Class Returns
Source: Coronation Fund Managers
Taking a Brief Look Back at 2022….
QUARTER 1 (Q1)
Importantly, Central Banks started to raise interest rates to curb global inflation.
The War in Ukraine triggered a negative supply shock to a global economy already struggling with supply-side shortages due to the pandemic … thereby reducing growth and further increasing inflation.
Notably, the MSCI World Index fell 5.2% in USD terms.
The Importance of Doing Nothing
As mentioned before on this blog see “Staying Invested Vs Timing Markets” in times of market volatility it can be tempting to deviate from one’s investment plan but knee-jerk reactions are not the best ways to navigate the uncertainty as illustrated in the graphs below by Ninety-One.
Source: Ninety-One
Taking a Closer Look at SA Interest Rates and Inflation – What Are the Drivers?
- In May, the South African Reserve Bank (SARB) raised the Repo rate (Repurchase Rate) by a further 50bps to 4.75%. The SARB last adjusted interest rates on 24 March. Notably, since November 2021, the Repo rate has increased by a total of 125bps. South Africa’s prime interest rate should now increase to 8.25%.
