Uncertain Markets And Your Pension Money
Finweek English|22 October 2020
With lacklustre local stock returns, questions about the creditworthiness of government debt and record-high offshore markets, those close to retirement may be left with daunting choices. Amanda Visser spoke to retirement specialists about the options.
Amanda Visser
Uncertain Markets And Your Pension Money

Investors globally and locally are finding themselves in an ‘investment yield drought’, which started in 2008 with the financial crisis in developed markets and rippled through to the rest of the world.

Then came Covid-19, which wreaked havoc on the markets. Retirees and those planning for retirement have justifiably panicked. But the constant refrain from the financial planning industry remains: Do not take short-term decisions for longterm plans.

In South Africa there is a unique combination between the Covid-19 market crash and the SA sovereign risk downgrade by rating agencies that caused long-term interest rates on bonds to increase, says Deane Moore, CEO of retirement income specialist Just.

“Higher long-term interest rates are good news for pensioners because life annuity rates improved significantly. This means those in or close to retirement have an opportunity to purchase guaranteed income for life at some of the cheapest levels in decades.”

Alexander Babich, managing director at Alexander Babich & Associates and deputy chair of the SA Independent Financial Advisors Association (SAIFAA) says SA has an incredible tendency to bounce back from the brink of disaster.

Internationally, interest rates are at either 0% or close to it. In SA investors can get a fixed rate on a three-year SA retail savings bond of 6% and a fixed rate of 8% on five years.

“We do not believe SA is going bankrupt just yet. Although there are credit risks, we think it is still a calculated risk. We believe fixed income funds with short-duration government bonds are still a safe space.”

Diese Geschichte stammt aus der 22 October 2020-Ausgabe von Finweek English.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

Diese Geschichte stammt aus der 22 October 2020-Ausgabe von Finweek English.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

WEITERE ARTIKEL AUS FINWEEK ENGLISHAlle anzeigen
THE HEALTH OF SA'S MEDICAL SCHEMES
Finweek English

THE HEALTH OF SA'S MEDICAL SCHEMES

As the Covid-19 pandemic abates, finweek takes a look at the financial performance of some of the largest players.

time-read
7 Minuten  |
5 November 2021
The effect of Gilbertson's departure
Finweek English

The effect of Gilbertson's departure

With Ntsimbintle Holdings now the major shareholder of Jupiter Mines, it could change SA’s manganese industry.

time-read
3 Minuten  |
5 November 2021
Making money from music
Finweek English

Making money from music

Why investors are increasingly drawn to the music industry.

time-read
3 Minuten  |
5 November 2021
Conviction is key
Finweek English

Conviction is key

Sandy Rheeder plays a critical role in Mukuru’s mission to open up financial services to the emerging consumer market in Africa through tailor-made technology solutions and platforms.

time-read
5 Minuten  |
5 November 2021
The post-pandemic toolkit
Finweek English

The post-pandemic toolkit

How CFOs can use technology to support growth.

time-read
4 Minuten  |
5 November 2021
Big city living exodus
Finweek English

Big city living exodus

Mini cities like Waterfall City and Steyn City are redefining city-style apartment living.

time-read
3 Minuten  |
5 November 2021
Big compact, big value
Finweek English

Big compact, big value

Handsome, with a hefty level of standard specification, the roomy Haval Jolion compact crossover is a great value proposition.

time-read
3 Minuten  |
5 November 2021
On barriers to entry
Finweek English

On barriers to entry

There are various ways in which a company or sector can achieve competitive dominance. They usually make for good investments.

time-read
2 Minuten  |
5 November 2021
Fear and greed in one index
Finweek English

Fear and greed in one index

To buck the trend, when markets are hot or cold, is a tough thing to do. However, it can deliver solid returns.

time-read
3 Minuten  |
5 November 2021
Africa's largest data centre facility coming soon
Finweek English

Africa's largest data centre facility coming soon

Vantage Data Centers plans to invest over R15bn for its first African data centre facility in Attacq’s Waterfall City.

time-read
3 Minuten  |
5 November 2021