Tariffs test investors' nerves

As Donald Trump reworks international trade agreements, many economic commentators are worried that US debt levels might become unsustainable. What does this mean for your investments?

- By Warren Ingram

Economic predictions are rarely accurate. Professional economists have a track record with predictions that would embarrass a coin-flipper. They consistently fail to predict recessions, market crashes or the direction of interest rates.

Even if you make an accurate economic prediction, you still have to consider how other investors will be positioned for the outcome. This adds a second layer of complexity, making successful investing based on predictions almost impossible. Investors who try to make money with economic forecasts tend to underperform simple buy-and-hold strategies.

Is a weak dollar bad for South African investors?

Investors with money overseas worry that a weak dollar will harm their investments. This concern is misplaced and oversimplified. The impact of a weak dollar on your investments will depend on the spread of your overseas investments. If you are only invested in US companies, you have a legitimate concern about currency exposure. This is why you should not be too concentrated in one country or currency.