The Wealth Report 2019

p knightFrankGlobal propoerty consultant Knight Frank published the 13th edition their Wealth Report, an annual analysis of prime property and wealth this week. This document contains all sorts of interesting articles and statistics. It also reports that the number of South African millionaires increased by 4% between 2017 and 2018. This is no mean achievement considering that over the same time period the Rand strengthened by 9% in 2017. To read more, click here.

The hidden secret of human failure and how it turns to success

p technologyThomas Edison is often described as America's greatest inventor. His successes include electric power generation, sound recording, and the electric lightbulb. But he was tenacious; he famously tested 1,000 different designs before settling on the carbon filament that became the first commercially successful lightbulb. Data researchers featured in this article found that for startups, scientists, and terrorists alike, learning too little from experience spells doom. To read more, click here.

Where do the millionaires live?

p chapagneArticles about the lives and habits of millionaires seem to be perennially popular. This article ranks the world's millionaires per square mile in 50 different cities. The top five cities are Geneva, Monaco, San Francisco Bay area, Zurich and Paris. No surprises there. Johannesburg, the only South African city on the list comes in at position number 43, wedged between Moscow and Madrid. Take a look to see the top 50 cities for millionaire density. Every tile represents a square mile and every dot equals one millionaire. To read more, click here.

The 100-year life: Living and working in an age of longevity

Old eye2The 100 year life is a book about how individuals, families, societies and governments are emotionally and financially unprepared for the fact that many of us will live to be 100 years old. It was jointly authored by Andrew Scott, Professor of Economics at London Business School and Lynda Gratton, Professor of Management Practice at London Business School. The authors outline the challenges and intelligent choices that all of us, of any age should be making to ensure a happier longer life. To go to the website, click here.

Global Pensions Survey 2019

RetireIf you are interested in statistics on trends in global pensions, read on. This study on the global pensions industry covers 22 major pension markets, including South Africa. Total assets now total USD 40,173 billion in pension assets and account for 60% of the GDP of these economies. The study published by the Thinking Ahead Institute, includes an analysis of the seven largest markets (the P7) which includes Australia, Canada, Japan, Netherlands, Switzerland, UK and US and comprises 91% of total pension assets. To read more, click here.

A journal of activity and trends inSouthern African private equity and venture capital 2019

VentureCapitalThis document published by the Southern Africa Venture Capital and Private Equity Association records the trends in private equity and venture capital over the last year or so. The chairman of SAVCA writes that over the last year, the industry was a substantial driving force behind the nascent renewal of the Southern African economy. He notes that private equity has always found numerous ways to build sustainable businesses not only through funding but also via lending experience and expertise. As a result, businesses backed by private equity investment grow faster than comparable companies backed by other kinds of finance. To read more, click here.

Time to change strategy

JohnMauldin2 2We always like reading what columnist John Mauldin has to say, even if we don't agree with him. Here he writes that there is no plausible path to stopping the world's debt overload without a serious and painful purge. He predicts tough decade ahead. In his view, the first requirement is to understand what is happening and why, and then to develop a response. To read more, click here.

Four more things to know about investing in private equity and venture capital.

TrevorLee2We had such a good response to the first article on private equity posted on the Moneyweb site, we asked Rosebank Wealth Group Financial advisor Trevor Lee to write some more. This article looks at skills needed by private equity and venture capital firms, as well the way that these investments are taxed. To read more, click here.

When should you invest in a Section 12J venture capital project?

TrevorLee2Rosebank Wealth Group advisor Trevor Lee writes that as the end of the tax year approaches, investors may be seeking investments that offset a portion of current tax liability. Carefully selected Section 12 J venture capital investments have an important place for investors seeking tax efficient investments and returns uncorrelated with listed entities. To read more, click here.

Eight stories from Davos 2019

WorldEconomicForumDavos 2019 was declared a damp squib by some of the journalists who attended the annual meeting of world leaders. The news coverage of Davos 2019 was more about who was absent that who was present. Donald Trump,Theresa May, French president Emmanuel Macron, Indian prime minister Narendra Modi, Russian prime minister Dmitry Medvedev all gave the 2019 meeting a miss. Chinese president Xi Jinping sent his deputy. It seems like the best way to catch up on proceedings might be from the comfort of your own computer. To read a summary of the best presentations, click here.

How should we then invest?

JohnMauldin2 2In this article, US-based columnist and investor John Mauldin poses the question of how people should invest over the next decade, given what he calls 'The Great Reset',which includes resetting global debt and the transformation. He (along with others including Ray Dalio and Mark Yusko) thinks that there will be a US recession in the next two years or so, followed by a very slow recovery. He doesn't answer the question posed in the title. For more, read here.

Your investment options for 2019

TrevorLee2In this article published by Moneyweb, Rosebank Wealth Group'svTrevor Lee looks back at the woeful cross-sector performances in the South African markets, and looks forward to what 2019 might bring. He concludes that 2019 might be another year where investors will have to be alert to any niche investments in their efforts to preserve capital. For more click here.

Things fall apart (Part 3) Markets

bhunt2 2In the third in this series by columnist Ben Hunt, (See parts 1 and 2 below), he continues in his inimitable style pulling lesser known literary works, comics and movie quotes together to explain his view of the markets. In this, the final of three parts, he begins by noting that many investors are anticipating the arrival of a US recession and an emerging market depression caused by raising US interest rates and a shrinking balance sheet,the devaluation of the yuan in response to trade war threats from the US,sparking a global credit freeze, and further stress in Euroland, sparked by Italy. But, he writes, the shock may well come from a fourth possible threat, rising inflation.For more, click here.

The Pulse of Fintech 2018: A biannual global analysis from KPMG

KPMGKPMG, the authors of the report, noted that fintech market activity worldwide gained momentum during the first half of the year as the geographic diversity and reach of fintech investment continued to expand. Brazil, France, Switzerland,South Korea and Japan saw significant fintech deals, extending fintech investment beyond traditional leaders US, UK, China and India. KPMG estimate that in H1'18 global investment in fintech companies was $57.9 billion across 875 deals. To read more,click here.

Private equity survey shows increase in venture capital activity

VentureCapitalThe Southern African Venture Capital and Private Equity Association (SAVCA) 2018 private equity survey covering the 2017 calendar year showed that despite a tough economic and political climate in 2017, investment activity in the VC sector increased. For the first time the overall value of deals recorded in a year amounted to more than R1 billion. In SAVCA's view, this upward trend will continue. To read more, click here.

Could the 'Buffett indicator' help you find value in offshore markets?

WarrenBuffetBreaks in upward momentum of the MSCI North America in January 2018 and again at the end of October 2018 could be signs of further volatility to come. Should new money still be allocated to the US? And could the 'Buffet indicator' help with the allocation of assets? Trevor Lee of Rosebank Wealth Group writes that investors should be constantly mindful of valuation and market risk and should diversify portfolios across countries, risk strategies, investment managers and asset types. To read more click here.

Things Fall Apart (Part 2)

bhunt2 2In Things Fall Apart (Part 1), Ben Hunt noted that the US no longer has either winning centrist politicians or centrist policies. In this article he suggests that just as US voters are pulling apart, so are so are portfolios are falling apart. His chief gripe is with central bankers who intervened post 2008 to keep capital markets from collapsing, and as a result, 'turned capital markets into political utilities'. He is alarmed that the three wealth bubbles over the last 20 years have enabled US citizens to grow richer at a faster rate than the underlying economy. He is also alarmed that a minority of the population are getting richer at the expense of the greater population. To read more, click here.

Pay less tax and be patriotic? Yes it can be done

TaxUSThe attraction of the upfront income tax relief, via Section 12J, is that it effectively reduces the cost of the investment, thereby boosting overall returns. Trevor Lee of Rosebank Wealth Group explains more about the regulations and rationale of this option. This article was first published by Moneyweb. To read more, click here.

The real cost of low-fee funds

ActivePassiveIn this article John Mauldin urges investors to calculate the 'true cost of a buy-and-hold strategy, and the hidden cost of using low-fee funds'. He writes that most studies used by investment advisers to justify this strategy use long time frames (40 or 50 years), which, he argues, is a time frame that most investors do not have. He also reminds readers that bear cycles can last for 20 years before recovering. While returns may be good in bull market, he writes, in a bear market, you are simply diversifying your losses. To read more, click here.

Use tax efficiency to enhance your long-term returns

TrevorLeeSouth Africans can enhance their long-term investment returns by taking advantage of suitable exemptions permitted by Sars and by reducing their income tax via rebates. Trevor Lee of Rosebank Wealth Group explains how, in this article first published by Moneyweb. To read more, click here.

SA in technical recession

SAFlagAccording to data released by Statistics SA, South Africa is in an economic recession with a 0.7% contraction in the second quarter of 2018. This is despite expectations that there would be reported growth levels. The rand weakened sharply shortly after Statistics SA released the news. In other news, it was reported by National Treasury that as of the end of July 2018, the difference between government revenue and expenditure reached R95.9 billion, the most since 2004. To read more, click here.

The 2018 financial markets review

SAFlagThe 2018 Financial Markets Review, released by National Treasury in September 2018, is compiled with available information from departmental sources, the South African Reserve Bank (SARB) and Financial Sector Conduct Authority (FSCA). It is important as it is the first review that has been released since the first stage roll-out of the twin peaks regulatory system. The report is divided into seven chapters which address governance, market conduct, market structure, trading venues and technology, regulatory framework, and the finalisation of the 2015 FX Review. To read more, click here.

The growing economic sand pile

John MauldinOne of our favourite writers, John Mauldin, says that investment portfolios have two functions; they have to simultaneously participate in growth and protect investors from possible loss. Mauldin connects this thought the art of building piles of sand and investigating at what point the pile will topple and collapse. He says that like a pile of sand reaching its tipping point, the more comfortable we get with a given condition or trend, the longer it will persist, and then when the trend fails, the more dramatic the correction. In the financial context, he writes, the collapse of the pile of sand could take years. To read more, click here.

Global health and aging

OldAgeThis document published by the World Health Organisation states that the world is facing an unprecedented situation; there are increasing numbers of older people and less children. Key questions arise. Will population aging be accompanied by a longer period of good health, a sustained sense of well-being, and extended periods of social engagement and productivity, or will it be associated with more illness, disability, and dependency? How will population aging play out differently for low-income countries that will age faster than their counterparts have, but before they become industrialised and wealthy? To read more click here.

Why land expropriation without compensation is a bad idea

TractorOn 27 February 2018, the National Assembly made a landmark decision to review Section 25 of the Constitution in order to cater for the principle of land expropriation without compensation. This article, published by the Centre for Development and Enterprise and written by Wandile Sihlobo and Tinashe Kapuya argues that land reform (through both the state and the market) has made more progress than experts admit,that expropriation without compensation is a catastrophically bad idea, and that trust between government and private sector is essential for the success and sustainability of effective land reform. To read more, click here.

South Africans differ on land reform. But there needs to be a meeting of minds

TractorThis article, first published by 'The Conversation', and written by Roger Southall, Professor of Sociology at the University of the Witwatersrand says that South Africans can't afford to let the land debate be reduced to a shouting match. He writes that President Cyril Ramaphosa's announcement on July 31st 2018 that the government was going to push ahead with implementing a decision taken by the ANC at its national conference last year to expropriate land without compensation has set the cat among the pigeons. To read more, click here.

A 'dating service' that is helping young people in South Africa find work

unemploymentGlobally, South Africa has one of the highest unemployment rates at 26%, a figure that has steadily increased over much of the last decade. Among young people, things are worse. One in three aged 15 to 24 are either unemployed, studying or in any kind of training, according to StatsSA. Reasons include a public education system with high drop-out rates, slow economic growth and BEE schemes that have benefitted only a few, as well as the legacy of apartheid. To read more, click here.

Things Fall Apart. (First in a series of three articles)

Ben HuntIn this article, Ben Hunt, one of our favourite writers, comments on the widening gulf between Democrat and Republican voters in the United States. As usual, he begins with a series of literary cameos, not all of which are familiar to South African audiences. But it is worth persevering to read what he has to say about what could happen when 'things fall apart', the end of mediation and cooperation between political parties. To read more, click here.

How should I use a lump sum for monthly income?

Peter smallerA Moneyweb reader posed a question to RWG Director Peter Nurcombe-Thorne. '...I am a single, 55-year old woman. I have R500 000 and I need a monthly income from this amount. Should I invest or buy a small flat to rent out?' Read his answer by clicking here.

Global Financial Development Report 2017/2018: Bankers without Borders

International MapThis report from the World Economic Forum highlights the benefits and costs of international banking. It shows that countries that are open to international banking can benefit from global flows of funds, knowledge, and opportunity but that the regulatory challenges are complex and, at times, daunting.

It reports that post-global financial crisis the globalisation trend has been partially reversed, as multinational banks from developed countries scaled back their international operations, coinciding with a general backlash against globalisation. At the same time, developing country banks continued their international expansion, accounting for the bulk of new entry into foreign markets. Greater South–South activity has also coincided with regionalisation, both in the roster of foreign banks in many host countries and in cross-border flows. To read more, click here.

How to dodge the debt train

John MauldinIn this article, John Mauldin gives investors some tips on 'how to dodge the debt train' from the perspective of investors in the United States. But his advice holds true in any volatile and uncertain investing environment. He writes that investors should be active, mindful investor, take tax breaks where they are offered and mix both investment strategies and investment managers. All pretty much what we recommend at Rosebank Wealth Group.To read more, click here.

The world's 500 largest asset managers

AssetManThis document, with joint research by Pensions & Investments and Willis Towers Watson, published in October 2017 offers a wonderful decade-long analysis of the changing face of asset management around the world. With data to the end of 2016, the report notes that independent asset managers comprised 10 of the top 20 asset managers, followed by seven banks and three insurer-owned managers. It also noted that 78.4% of all assets are actively managed (down by 2.3% since the previous report) while passive AUM increased 5.9% during the same period. To read more, click here.

Some good news from the Stats SA Living Conditions Survey

StatsSA logoThis Stats SA survey somehow escaped coverage by main news channels. It reports on the subjective poverty levels based on data collected by Stats SA in 2009 and 2015. Over the years,Stats SA has produced a number of reports based on various definitions and measures of poverty. These include objective measures, relative measures, multi-dimensional measures as well as subjective poverty measures. Subjective poverty, the main focus of this report is defined as the self-assessed economic status of people relative to others. The results indicate that nationally, the percentage of people who lived in a household perceived as poor has declined from 39,2% in 2009 to 35,0% in 2015. For more, click here.

The Debt Train Will Crash

JohnMauldin2This article by John Mauldin is a summary of the series on debt, pensions and retirement. He writes that in his view, excessive debt is dragging the world economy toward an epic crash. The tracks ahead are clear for now but will not remain so. This article underlines just how big the problem is. To read more, click here

Rising corporate debt; peril or promise?

McKinseyThis recent publication from the McKinsey Global Institute (MGI) notes that since the 2008 financial crisis, global debt has continued to rise. Much of this increase is due to a surge in government borrowing, but corporate debt has risen over this period by nearly as much. Corporate bond issuance has increased 2.5 times over the past decade, creating a broader and deeper market in many countries. This document examines the fact that total debt (including household, nonfinancial corporate, and government debt) has grown by three-quarters since the financial crisis, from $97 trillion in 2007 to $169 trillion in the first half of 2017 in constant exchange rate terms and the consequences of this.To read more, click  here.

Global Competitiveness Report 2017-2018

WorldEconomicForumThe World Economic Forum Global Competitiveness Report 2017-2018 ranked South Africa (SA) 44th out of 137 countries in terms of its financial market development, a drastic fall since 2016, when SA was ranked 12th out of 140 countries. This rating is made up of eight metrics each of which has separate rankings. In 2016 SA was ranked first for 'financing through local equity markets' and second for 'regulation of securities exchanges'. In the latest rankings SA's score for these two metrics was 25th and 46th respectively. To read more click here

Europe has train wrecks too

John MauldinOne of our favourite writers, US-base John Mauldin uses the results of a study from the World Economic Forum study on retirement shortfalls in eight countries as the starting point for his remarks in this article. The WEF report states that if the  retirees were to be funded at 70% of their last income, there would be a $400 trillion retirement savings shortfall by 2050. Unless the countries concern find the cash, he writes, they will break their promises to workers. To read more, click here.

Dealing with portfolio headwinds. When do you panic?

Peter smallerScary investment returns over the last ten years? Peter Nurcombe-Thorne advises retirement savers when they should panic. Tip: the answer is that tweaking your portfolio is OK, but panicking is not. But this assumes that your retirement portfolio has been designed to withstand the storms. To read more, click here .

Which should you choose; to top up your RA or invest in a tax-free account?

Peter smallerFrom time to time Rosebank Wealth Group is asked to answer Moneyweb readers' questions. Recently Peter Nurcombe-Thorne answered this question:

I am currently 54 years old and contributing to a pension fund and RA. I am also contributing towards a tax-free fund of R33 000 per year. I am however not using the full 27.5% contribution towards the pension/RA funds on my total remuneration as per Sars. My question: Would it be better to first use the tax benefit as allowed by Sars before investing into a tax-free fund? Financially I am not able to contribute the full 27.5% plus the R33 000.

To read his answer click here.

A wonderful analysis of long term returns

CredSuisseThe Credit Suisse Global Investment Returns Yearbook 2018 offers investors a wonderful bird's eye view of the performances of different asset types in 23 countries from 1900 to 2017. It shows that equities have been the best long-run investment and that globally, the returns and risks from housing have come second, followed by bonds. Over the time period, gold has given poor returns, high volatility, and been a poor inflation hedge and collectibles such as art, wine and musical instruments have beaten cash and government bonds. To read more, click here.

Are my financial advisor's fees justified?

Peter smallerRWG's Peter Nurcombe-Thorne was asked to answer a question posed to Moneyweb on whether or not a 1% ongoing fee (over and above other administration fees) was justified. To read his answer, click here.

Five tips for the ideal long-term retirement portfolio

Wild SeaIn a recent article published by Moneyweb, RWG Director Peter Nurcombe-Thorne wrote that it might be useful to think of saving for your retirement like planning a forty-year journey on a yacht, across wild and unpredictable oceans. To read more, click here.

South African expanded unemployment rate up to record high of 36.7%

StatsSA logoIn mid-May Statistics South Africa released the Quarterly Labour Force Survey. It showed that the SA unemployment rate remained unchanged at 26.7% in the first quarter of 2018, helped by an increase in formal sector employment. However, it reported that the number of discouraged workers had risen to an all-time record high. The number of unemployed people and discouraged work seekers (the expanded unemployment rate) is now 36.7%. To read more, click here.

Weird and wonderful offshore shares

Peter smallerLet's assume you have made the decision to invest offshore, because you know that the JSE's market cap is less than 1% of listed companies in the world and you should diversify your portfolio. You also know that now is a good time to invest offshore because we are reaping the 'Ramaphoria' dividend and the rand is relatively strong. So what next? The main requirements for your new investments would be that the underlying holdings add diversity to your existing portfolio while offering good value. Click here to read more.

Notes from the field: Good job

Ben HuntIn this article Ben Hunt writes that the words 'Good job', whether said from a parent to a child, or a teacher to a pupil or a coach to an athlete are overused and sometimes dishonest. He says that this extends to investment advisors who unthinkingly support different products. The alternative to this dishonesty is convexity, which he says is a philosophy about identifying what you are particularly good at, and then executing on it. For more click here.

Outrageous predictions for 2018

Peter smallerAt Rosebank Wealth Group we keep a sceptical eye on a wide range of predictions, forecasts and scenarios published by analysts across the world. One of the more interesting is an annual list of ten outrageous predictions published by Saxo Bank, a Danish bank. Saxo's purpose in creating the list is to ensure that they remain alert to unlikely possibilities, forcing them to broaden their thinking. We like this approach. To read more, click here.

Interview with Davie Krige, founder of Cederberg Capital

DawieKrige 3Dawie Krige, founder of London based Cederberg Capital was recently interviewed by well-known South African Alec Hogg, founder of Moneyweb and Biznews.com. In 2017 Krige's fund enjoyed a performance of 75% putting it in the league of the top 1% of all funds in the world. The fund focusses exclusively on investing in companies based in Greater China. RWG clients who are invested in the GAAF funds have exposure to this fund. The interview below is a shortened version of the interview and is reproduced courtesy of Biznews.com. To read a shortened version, please click here, to read the whole interview please click here. Photo courtesy of Biznews.

Five things to watch at Davos 2018

WorldEconomicForumThe World Economic Forum's (WEF) annual meeting is scheduled to take place from January 23-26, 2018 with the theme 'creating a shared future in a fractured world'. The 48th meeting is set to host 3 000 participants including presidents, prime ministers and business leaders. Records of attendees released for the first time report that 58 South Africans have been confirmed as attending the meeting (down from 61 in 2017). This article, published by Time magazine, highlights five things to watch out for. To read more, click here.