5 offshore investment myths South African investors need to stop believing

THE process of offshore investing seems intimidating to many people, but the reality is far less complex than it seems.

- DEAN DE NYSSCHEN

In an increasingly globalised economy, South Africans are turning to offshore investments to increase their earning potential, while diversifying their portfolios and hedging against domestic economic risks.

However, many investors remain underexposed to foreign markets. It is key to distinguish between the psychological pitfalls of investing offshore and the fundamental truths and characteristics of global investing. We hope that by giving an informed perspective, we can help investors stay focused on the long-term potential rather than the short-term noise. With a balanced approach, it is possible to manage risk while capitalising on the unique opportunities of global jurisdictions.

Human behaviour often proves to be a greater threat to wealth creation than market volatility itself. Many domestic investors, though well aware of the need for diversification, remain emotionally tethered to familiar shores; a phenomenon known as home bias. This stems from an overconfidence in the local market, driven by comfort and perceived control, even when structural challenges and long-term currency depreciation erode long-term value.

This is further exacerbated by confirmation bias, the instinctive search for information that validates preexisting beliefs while dismissing data that challenges these narratives. For example, “offshore investing is risky” or “the rand always bounces back”.

Endowment bias further compounds the inertia: investors assign disproportionate value to what they already own, perceiving local assets as inherently “safer” simply because they are theirs. Together, these biases create an illusion of prudence while quietly constraining opportunity.

Let’s unpack some common myths that discourage investors from exploring opportunities in the foreign market.

Myth 1: “Investing offshore is complicated and only for experienced investors.”