I'm staying but should my money?

The South African economy represents only about 1% of the global economy, so it makes sense to put some of your cash to work in another country.

- SYLVIA WALKER

Investing offshore may sound complex, but all it really means is that you're investing in a country other than where you live. Because our economy is so tiny, there are literally thousands of investment opportunities in other countries and currencies, providing access to high-growth sectors not available locally. These include technology, like Facebook or Alphabet (which owns Google); e-commerce, like Amazon; and biotechnology, such as Gilead.

SPREAD YOUR RISK

A golden rule for successful investing is diversification - not putting all your eggs in one basket. It's like eating a healthy diet: just as different foodstuffs provide your body with different nutrients to stay healthy, spreading your money across various types of investments (called asset classes) creates a healthier portfolio by reducing your risk. This is because each asset class (bonds, property, shares and cash) performs differently each year. In fact, you may already be investing offshore without realising it.

◗ JSE-listed companies generate about 65% of their revenue from global markets, so even if you’re only investing locally, you may already be investing some money offshore.

◗ If you have a retirement annuity (RA) or a pension fund, as much as 45% of your money may be invested offshore in line with legislation.

PROTECT YOUR SHRINKING RAND

Over the past few decades, the value of the rand has tumbled compared with many other currencies. Looking back just 20 years is a real eye-opener: In May 2003, the exchange rate was US$1 = R7.50. Ten years later, it was US$1 = R9.30, and today it’s US$1 = about R18. Taking your money offshore gives you some protection against this decline and our beleaguered economy, as your investment growth is in a foreign currency.