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
How to best invest a financial windfall (e.g. an inheritance)

How to best invest a financial windfall (e.g. an inheritance)

Personal Financial Advisor Warren Ingram advises a listener who inherited some money, and wants to work well with it.

Robots are already replacing financial advisors right here in South Africa

Robots are already replacing financial advisors right here in South Africa

But can they be trusted? Are they independent? Bruce Whitfield interviews Personal Financial Advisor Warren Ingram.

The good that can come from the carnage that is Steinhoff

The good that can come from the carnage that is Steinhoff

Bruce Whitfield interviews Personal Financial Advisor Warren Ingram. He also read a question sent by Nick, a regular listener.

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.

Popular articles
[LISTEN] Biomimicry could be the answer to Cape Town’s water crises

[LISTEN] Biomimicry could be the answer to Cape Town’s water crises

Certified biomimicry professional & founder of Biomimicry SA Claire Janisch chats about how biomimicry can help humans adapt.

Hawks video shows fugitive Ajay Gupta leaving SA

Hawks video shows fugitive Ajay Gupta leaving SA

The Hawks are in possession of video footage showing Gupta, wanted in connection with Vrede dairy farm scandal, leaving SA.

JoJo - struggling to keep up with demand - now has a turnover of R600 million

JoJo - struggling to keep up with demand - now has a turnover of R600 million

The JoJo brand has entrenched itself in the psyche of South Africans. Bruce Whitfield interviews its MD, Grant Neser.

'Today, Zuma declared war on the ANC'

'Today, Zuma declared war on the ANC'

Political analyst Richard Calland says there was a sinister and threatening tone to President Zuma's interview with the SABC.

Hope Ramaphosa: Cyril never lifted a finger to me, he wouldn't beat a woman

Hope Ramaphosa: Cyril never lifted a finger to me, he wouldn't beat a woman

Cyril Ramaphosa's ex-wife says abuse allegations spread by EFF leader Julius Malema are an attempt to tarnish his reputation.

3 emergency numbers you should have on speed dial and how they work

3 emergency numbers you should have on speed dial and how they work

These are the emergency numbers you should have on your cellphone and this is what you must understand about how they work.

Clifton in Cape Town is the 2nd best beach in the world – National Geographic

Clifton in Cape Town is the 2nd best beach in the world – National Geographic

The magazine describes Cape Town as a city flanked by stunning beaches and calls it “The African Capital of Cool”.