It's widely accepted that investing in stocks is one of the most effective ways to generate long-term financial returns and increase your chances of wealth growth. Despite the fact that the South African stock market is one of the most advanced and efficient in the world, the local stocks available to independent investors account for only 1% of the global economy.
While buying and selling shares on the local JSE can certainly increase your personal wealth, you should consider investing in markets outside our country to maximize your investment potential.
Many South Africans continue to believe that offshore investment is either out of their reach or a privilege reserved for the wealthy.
The truth is that recent changes in exchange regulations have put international investment within reach of the majority of South Africans. The impact of Covid-19 on our local market has highlighted the importance of diversifying your assets and exposing at least some of them to international growth opportunities.
Why Choose Offshore Investments Over Local Investments?
Offshore investing may appear to be a frightening prospect. When it comes to money and investing, we have a tendency to let our emotions guide us.
One of our prejudices when it comes to investing offshore is what's known as "equity home bias." The tendency to invest the majority of our assets in local investments, domestic assets, where we feel "safe". It's easier to overlook the advantages of diversifying our investments across a variety of foreign markets. We forego the benefits of investing offshore in order to stick to what we know.
Is it, however, always risky to invest in a foreign country? We believe it doesn't have to be that way with a little extra knowledge and a Sweidan and Co expert, professional Independent consultant by your side simplifying your options for you. Offshore investing offers all kinds of advantages:
Take advantage of more opportunities.
Diversification is an important principle for lowering investment risk. You gain access to countries with different currencies and economic cycles than ours, as well as asset classes and industries that are not available locally, by investing in international markets.
Reduce the risk of emerging markets.
South Africa, as an emerging market, is often at the mercy of how fickle international investors can be. They are more likely to invest in emerging markets around the world while the good news lasts, and then they are more likely to disinvest when their investment sentiment deteriorates. In emerging markets like ours, the rapid change in demand and supply for our stocks and bonds causes greater volatility.
To counteract the Rand's depreciation
Local investments are negatively affected when our Rand weakens relative to the currencies of our major trading partners. Economic theory suggests that, in the long run, South Africa's currency should depreciate in comparison to our major trading partners, even if this isn't always the case. This is due to the fact that our inflation rate is higher than most of our trading partner’s. The Rand can depreciate significantly in the short to medium term as a result of unfavorable financial markets or political news.
The fact that we import a lot of goods and services with a weak Rand contributes to our high inflation rate. You'll need an offshore investment that can grow in Rand terms due to Rand depreciation to offset the rising cost of living.
Protect yourself from geographical and political risks.
Citizens and investors agree with what governments do and don't do around the world. When governments make unpopular decisions, investment returns almost always suffer. Similarly, natural disasters such as earthquakes can wreak havoc. International diversification can help to mitigate these risks.
Capital guaranteed investments
Capital guaranteed investments are not unique to offshore investing but can form an integral part of a retirement portfolio by protecting investors from downside risk and also providing long term growth.
How We Can Help
We make it straightforward and simple to use your offshore allowance to create wealth in a hard currency like US Dollars, Pounds or Euros. Whether you want to save on a regular basis, make a lump sum investment or start a pension in a hard currency we have the solution for you, and it is easier than you think. While no investment comes with a guarantee, we work hard to ensure that your investments make as much as possible, all for very low fees.
Our independent, experienced financial advisors will work with you to create the offshore investment strategy that makes the most sense for you and compliments your overall investment portfolio.
Contact one of our professional , independent consultants if you would like to find out more about capital guaranteed investments, offshore investments and local investments all with low fees that will help our clients get the most out of their investments.
And that's not all. In the interests of further diversifying your portfolio, and maximizing your wealth building potential Sweidan and Co also offer you the opportunity to store wealth in physical silver and gold which is another way of mitigating emerging market currency risk while at the same offering protection against Rand weakness.
Contact Us Today for a no Obligation Consultation
Call one of our consultants today on 031 350 4580
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Offshore Investing Made Easy
In a time when market volatility in South Africa is a major concern, and the Rand is less than stable, savvy investors realise that diversifying their portfolio into offshore investments can be an excellent way to maximize the potential of their investments.
Do you Have a Valid Will?
Under South African law, a person who dies without making a Will leaves their estate to be distributed according to Intestate Succession. This essentially means that the Government - following standard hieratical rules - will decide how your estate is settled.
Plan your future on your coffee break
Let us help you take control of your financial future. Give us information about your personal circumstances, risk preference and savings objectives. We will build a fully diversified investment portfolio uniquely suited to your needs.