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Benchtest Newsletter
Issued June 2022
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In this newsletter
Benchtest 05.2022, FIMA changes, late payment interest, governance and more...
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Jump to...
Important notes & reminders
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NAMFISA levies
- Funds with June 2021 year-ends must submit their 2nd levy returns and payments by 25 August 2022;
- Funds with December 2021 year-ends must submit their 1st levy returns and payments by 25 July 2022; and
- Funds with July 2021 year-ends must submit their final levy returns and payments by 29 July 2022.
Registered service providers
Certain pension fund service providers must register with NAMFISA and must report to NAMFISA regularly. Download a list of service providers registered as of June 2021, here... |
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Retirement calculator
Use our web-based retirement and risk shortfall calculator for your personal retirement planning. Find it here...
If you need help with your financial planning, get in touch with
- Annemarie Nel (tel 061-446 073)
- Kristof Lerch (tel 061-446 042)
- Christina Linge (061-446 6075)
Toolbox for trustees
RFS provides comprehensive support for trustees. Find a list of download documents to assist with governance and management of private funds, here...
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Newsletter
In this newsletter, we address the following topics:
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In 'Tilman Friedrich's industry forum' we present...
- Monthly review of portfolio performance – 31 May 2022
- You better stay at home and lock your doors when it is getting rowdy on the streets!
- FIMA bits and bites – significant changes from PFA (part 2)
- FIMA bits and bites – late payment interest on contributions
- FIMA bits and bites – fund governance prescriptions
In 'News from RFS,' read about…
- Long service awards complement our business philosophy
- RFS sponsors NAMCOL achievers
!Kharos Benefit Solutions
- Your payroll, H.R. and I.R. partner
News from NAMFISA
- NAMFISA to consult the R.F. industry on standards
In 'Legal snippets,' read about...
- The Flexible Land Tenure Act and Housing Loans - part 1
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In 'Snippets for the pension funds industry,' read about...
- Preserving for the future and preserving wealth in volatile times
- Protecting your portfolio against the next pandemic, war rising inflation, or debt crisis
In ‘Snippets of general interest, read about...
- Behavioural lessons to improve your financial success
- These are the nine best universities in S.A.
And make a point of reading what our clients say about us in the ‘Compliments’ section. It should give you a good appreciation of who and what we are!
As always, your comment is welcome, so open a new mail and drop us a note!
Regards
Tilman Friedrich
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 Tilman Friedrich's industry forum
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Monthly Review of Portfolio Performance
to 31 May 2022
In May 2022, the average prudential balanced portfolio returned 0.4% (April 2022: -0.7%). The top performer is M&G Managed Fund with 1.0%, while Hangala Prescient Absolute Balanced Fund with -0.5% takes the bottom spot. For the 3-months Allan Gray Balanced Fund takes the top spot, outperforming the ‘average’ by roughly 1.5%. NAM Coronation Balanced Plus Fund underperformed the ‘average’ by 2.1% on the other end of the scale. Note that these returns are before (gross of) asset management fees. The Monthly Review of Portfolio Performance to 31 May 2022 provides a full review of portfolio performances and other insightful analyses. Download it here...
You better stay at home and lock your doors when it is getting rowdy on the streets!
A few years ago, I suggested in this column that asset managers must consider the global political environment in their investment decision. I addressed my concern with some of these managers. They responded that it is more important to focus on investment fundamentals as one cannot predict political developments. Once the political upheavals fade, investment fundamentals will prevail once again.
I am not sure one can ignore the political environment but accept that the time horizon impacts one's approach. For investors, the time horizon is 40 years at most. If political upheaval does not settle within that time horizon, the investor may have a serious problem. In such a scenario, the investment principles become irrelevant to the investor.
Today's political system has been established over the past 75 years. Most alive today only know this system and may think it can never change. However, life changes continuously, sometimes slower, sometimes faster. Over the past 75 years, the political system has changed, but generally gradually and in a very controlled fashion, except if one dared to challenge the US hegemony...
The Monthly Review of Portfolio Performance to 31 May 2022 also reflects the editor’s views on current developments and their impact on investment markets. Download it here...
FIMA bits and bites – significant changes from PFA (part 2)
The FIMA will change the retirement funds industry materially from what it was under the Pension Funds Act, and this will raise funds’ costs that members ultimately have to bear.
This newsletter presents the second and final part of an overview of these wide-ranging and costly changes.
- The board of a financial institution (which includes retirement funds) must-
- Maximise returns for owners
- Ensure that the institution has sufficient financial resources
- Ensure fair treatment of consumers
- Establish an audit committee and define its duties
- Lay down procedures regarding conflicts of interest and for identifying and vetting related party transactions
- Establish investment and lending policies, standards, and procedures
- Establish risk management strategies and policies
- Establish outsourcing procedures
- Monitor procedures, strategies, and policies of the fund
- Indemnify its directors and officers only if they acted honestly and in good faith
- Submit a return of directors, auditor, and valuator annually to NAMFISA
- Submit annual financial statements within 90 days after the financial year end
- Revised “section 14” transfer process:
- Publish a notice of the transfer intention in the Gazette and a local newspaper
- apply to NAMFISA in the prescribed form and manner
- draw up a transfer agreement
- NAMFISA is empowered -
- To deal with market abuse
- To issue standards
- To issue enforceable guidelines, bulletins, rules, general directives, and any other subordinate measures
- To remove any board member who is no longer fit and proper
- To impose reporting obligations
- To appoint inspectors with extensive powers & duties
- Decisions, notices, directives and other official communications –
- NAMFISA or the Minister must issue all decisions, notices, directives or other official communications under this Act in writing unless the FIMA specifically provides for otherwise
- Representative self-regulatory organisations
- NAMFISA may delegate functions to such organisation
- NAMFISA’s legal remedies –
- It may accept enforceable undertakings
- It may institute an action to enforce compensation for breach of law
- It may apply to the court to have a statutory manager appointed to the financial institution or intermediary
- Statutory management provisions
- FIMA contains a detailed exposition for the statutory management of a financial institution or intermediary
- Establishment of financial services compensation scheme
- NAMFISA may establish a compensation scheme
- NAMFISA may appoint a body corporate to administer the scheme
- 11 General Standards set out details of requirements on
- Confidentiality and sharing of information
- Protection of client assets
- General offenses and provisions relating to offenses and sentences
- The Minister may make regulations that the Minister considers necessary for the due carrying out of the provisions of this Act
- In cases of conflicts or inconsistency, the order of the legislation that prevails is as follows:
- The FIMA
- The regulations
- The standards
- The guidelines, rules, directives, and other subordinate measures
FIMA bits and bites – late payment interest on contributions
RF.R.5.8 requires the fund (or rather its administrator) to allocate late payment interest paid by an employer for the late payment of contributions to the affected member’s record. This requirement causes the fund administrator significant additional manual work that the cost of which the fund’s members will have to carry.
The premise of retirement fund administration is that the fund is a group arrangement, receiving regular monthly bulk contributions and batch processing. This premise makes fund administration efficient and cost-effective for the benefit of members. Retirement annuities, in contrast, do not offer such efficiencies and are significantly more expensive for the member.
Fund administration systems typically update members’ records only once a month. The system would credit the member with this month’s contributions on the first day of next month, even if the employer pays after the first day of next month. The administrator then reconciles the contributions received, updates the members’ records, and invests the contributions during the next month. The member would earn interest from the first day of the next month even though the contributions are only invested sometime in the next month. Therefore, late payment of contributions does not impact the member negatively. The member earns interest equivalent to the investment return on the underlying investment from the first day of the month even though the employer may have paid late. The interest the employer must pay for late payment per RF.R.5.8 thus accrues to the fund, not the member and the member should not benefit additionally from the interest the employer pays.
Unfortunately, RF.R.5.8 ignores prevailing fund administration practice. NAMFISA should reconsider this standard and make it less specific as to how a fund must apply the employer’s late payment interest.
FIMA bits and bites – fund governance prescriptions
The new eleven-page draft standard RF.S.5.26 deals with “Governance of Retirement Funds.” Although I do not want to go into too much detail, I provide enough information so trustees can appreciate their onerous responsibilities and their individual and collective risks under the FIMA.
- Boards’ ethical leadership responsibility: the board is responsible for the fund’s governance and ethical standards, practices, procedures, policies, and conduct.
- Board composition: the board must consider its composition regarding size, diversity and demographics, academic qualifications and technical expertise, relevant knowledge and experience, age, race, and gender; all trustees must to be citizens, permanent residents, or foreign persons ordinarily resident in Namibia.
- Board chairperson: the chairperson must proactively and impartially lead the board, raise issues of concern with stakeholders and ensure that the fund manages the trustees’ and principal officer’s performance.
- Orientation and training of trustees: new trustees must, at the expense of the fund, receive comprehensive training on legislative, regulatory, and governance principles; trustees must receive regular briefings on matters relevant to the business of the fund.
- Independence and conflicts of interest: a member of the board, principal officer, employee or any other officers, auditor, valuator, administrator and any other service providers must report to the board any conflict of interest encountered during the performance of their duties; the fund must separate operational and oversight responsibilities in the governance of the fund; the trustees must demonstrate their independence and impartiality in the way they exercise any discretion, act in the best interests of the fund; ensure confidentiality of sensitive information and ensure that no service provider interferes in the fund’s management.
- Delegation of authority: the board may establish sub-committees but may not abdicate its responsibilities to these; the sub-committees must have terms of reference, and their members must be suitably skilled and experienced.
- Filling of vacancies: the fund must follow its rules in filling vacancies.
- Tenure of office: no trustee, audit partner, or valuator may serve for more than two consecutive fixed period terms.
- Rotation: to avoid undue concentration of power and promote fresh perspectives, the board should rotate sub-committee members.
- Internal audit: the board must consider whether the structure and operations of the fund would benefit from the introduction of an internal audit function; if required, the fund must have an effective, risk-based internal audit function.
- Performance evaluation of board: the chairperson must, at least annually, review the trustees’ performance to ascertain whether board members collectively and individually remain effective in their respective roles and responsibilities; an independent trustee must lead the chairperson’s evaluation; the board must identify and address inadequacies
- Role of the board in setting the fund strategy: the board must determine and approve the fund's long-term and short-term strategies and monitor their implementation by management or the service provider.
- Internal controls: the board must put internal controls in place which must cover all basic organisational and administrative procedures; depending upon the scale and complexity of the fund, the internal controls must include performance assessment, compensation mechanisms, information systems and processes, risk and compliance management procedures, assess performance, review services, processes, fees, conflicts of interest, statutory compliance and safeguarding of information.
- Expert advice: The board must satisfy itself that it obtains independent expert advice; where a professional gives expert advice on a service provider, the employer, or sponsor, the board must ensure that a relationship does not compromise such advice; that all its professional staff and external service providers have adequate qualifications and experience.
- Risk management: the board must put in place the frameworks and processes to assist in anticipating risks; have in place and review at least annually a risk management policy; have appropriate risk responses; obtain assurances of effective risk management for outsourced risk management; ensure complete, timely, relevant, accurate and accessible risk disclosure to stakeholders.
- Fund expenses: The board must regularly review services against set performance standards, review fees, and all costs and manage these efficiently.
- Individual investment choice: the board must ensure that the investment portfolios from which members may make their selection is appropriate for the profile of the fund membership and strategy; the board must review investment options regularly in relation to the fund membership and strategy; investment options must detail the severity of any inherent or associated risk and the performance benchmarks; monitor performance and ensure that it optimises costs and charges.
- Insured funds: the board must ensure that the fund insurance policies issued by an insurer to the fund are reasonable and consistent with the provisions of the fund rules and the Act and that charges are reasonable and benefits protected.
- Fund information and access to fund information: fund information such as fund membership and investment records belongs to the fund, and the board must ensure that the service provider holding the information will preserve its confidentiality and return it to the fund when the fund terminates the relationship.
- Information technology governance: the board must understand the strategic importance of information technology and manage the associated risks, benefits, and constraints.
- Employer and sponsor: the board must maintain its independence.
- Reporting requirements: the fund must report relevant and accurate information to its stakeholders.
- Disclosure requirements: the board must disclose relevant information to all relevant persons.
- Non-compliance: this standard renders officers and trustees knowingly involved liable to compensate a loss any person suffered, to a fine of up to N$ 2.5 million or imprisonment not exceeding five years for breaching an enforceable undertaking, and to administrative sanctions of up to N$ 10 million for breaching this standard.
This standard is a first-world, textbook blueprint for the governance of financial institutions. It creates inappropriate legal compulsion scaring off trustees and officers. It lays down such high hurdles that no fund in Namibia is capable of meeting. Every fund in Namibia will face NAMFISA penalties with every fund inspection. It is inconceivable that a NAMFISA inspection will find any fund compliant!
Instead, NAMFISA should issue this standard as ‘guidelines for good corporate governance for retirement funds’ without legal compulsion. NAMFISA can then address serious general deficiencies in funds’ governance practices through a standard, directive, or another subordinate measure.
Invest in what you consume to hedge against inflation
Little has changed in global investment markets since last month’s commentary. Energy costs, inflation, and international interest rates, including S.A. and Namibia, continue to increase. Food shortages are growing, and the Ukraine crisis shows no sign of remission; instead, it is heating up further.
The Ukraine crisis is just a symptom of politics that investors must understand before investing. Politics constitute the outer framework within which economies and markets operate. As much as one may think that we live in a free-market economy, the market is not really free as the political framework sets it narrow constraints.
The U.S. stated that its goal in Ukraine is to weaken Russia, and it is doing all in its powers to prop up Ukraine with modern weapons and to instigate Europe to do the same. Simultaneously, the U.S. and the E.U. are tightening their economic measures against Russia even though it comes at a hefty price to the E.U. in particular.
The U.S. is the self-proclaimed global hegemon. Its most effective tool for holding on to this position is the U.S. Dollar. Russia’s proclaimed goal is a multipolar world, and it shares this goal with China. If world trade is undertaken in multiple currencies, one can achieve a multipolar world. It requires trade partners to trade in currencies other than the U.S. Dollar, and they have taken steps in that direction. Replacing the U.S. Dollar with other currencies poses a threat to the U.S. hegemony and hence the U.S.’ resolve to stop Russia from achieving its goal of a multipolar system.
The argument for a U.S. hegemony is that it offers global stability. The economic environment has been pretty stable for a long time, as it promoted U.S. economic interests. Unfortunately, the same has not applied to the political environment. Was the international political instability despite the U.S. military and economic dominance or its result? Should countries prefer economic stability at the cost of their freedom and autonomy? Is the acceptance of U.S. hegemony because of the economic stability it offers to the world not equivalent to accepting an autocratic government system because it avoids political partisanship and the friction it causes in democratic societies?
Whatever one’s preferences, many countries prefer their freedom and autonomy even if they cannot say so publicly. As long as this is the case, we will have strife, and we will have many countries quietly resisting and waiting for an opportunity to openly and actively resist. No self-respecting country will accept domination by another country forever. Russia and China are a point in case. The question is whether the U.S. will knock Russia back into submission during the Ukraine crisis. If it is successful, the prevailing upheaval in the global economy should calm down, and markets should become more predictable. If it is not successful, predicting the effect on markets is tough. Uncertainty will prevail for an extended time and will likely increase dramatically until the new multipolar order settles down.
Judging by the U.S. Dollar strength ascribed to the international flight of capital to the ‘safe U.S. haven,’ investors generally expect the U.S. ideology to prevail. We have witnessed the Rand depreciating to the U.S. Dollar from 14.45 on 25 March 2022 to 16.03 on 6 May 2022. While 16.03 is far off the COVID induced flash fall-out in April 2020, when the Rand briefly hit 19 to the U.S. Dollar, the opportunity for expatriating money offshore is gone. Uncertainty is the order of the day and is evident in the large increase in the US CBOE Volatility Index. It is now twice as high as before the global COVID lock-downs hit markets.
Conclusion
The main theme for investors is the prevailing uncertainty. As inflation and interest rates creep up, a fixed interest investment is a sure way to lose money. In these times, one must stay out of the cross-fire, meaning that one should not invest where there is a risk that the investment may get sucked into the conflict. The developing world is well-advised to stay out of this conflict even if the U.S. is considering those not supporting it to be against the U.S. Developing countries that remain on the side-line are good investment destinations since most of them are commodity-based economies. Commodities should fare well during the conflict we are currently experiencing. Amongst those countries will be Namibia and, hopefully, South Africa too, meaning that “local is lekker”!
As I regularly point out, diversification is the key to successful investment. That does not mean that one should not channel your investments into asset classes and assets less exposed to risk, such as the risks I am referring to above. Under the prevailing environment, commodities, basic consumer goods representing life necessities such as clothing, food and beverages producers, health care providers, and the energy sector should hold out good prospects. Inflation is rising rapidly, but salaries will trail the rise in inflation. As a result, consumers will experience increasing financial pressures. Owning life necessities-producing assets should offer opportunities to hedge one’s cost of living against the ravages of inflation.
Tilman Friedrich is a chartered accountant and a Namibian Certified Financial Planner® practitioner, specialising in the pensions field. He is co-founder, shareholder, and Chairman of the RFS Board and retired chairperson, and now a trustee of the Benchmark Retirement Fund.
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Compliment
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From a principal officer
of a large fund
Dated 3 March 2022
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“Oh my [I] ? man…..
Dankie my eie, will send the member to collect.
Your are truly a gem..!” |
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Read more comments from our clients here...
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News from RFS
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Long service awards complement our business philosophy
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RFS’ business is primarily about people and only secondarily about technology. Every time a fund changes its administrator, it loses substantial fund information and knowledge. Similarly, every time the administrator loses a staff member, our clients lose corporate memory. As a small Namibian organisation, we cannot compete with large multinationals technology-wise because of global IT systems' economies of scale and sophistication. We differentiate ourselves through excellent personal service and commitment to our clients, and IT systems that are more flexible, versatile and adaptable and more appropriate for the Namibian environment. We are proud of our staff retention as we know that it is the key to our success!
- Rauha Hangalo celebrates her 20th work anniversary on 30 June 2022!
- Bianca Busch celebrated her 15th work anniversary on 31 May 2022!
- Matha Naakambo celebrated her 10th work anniversary on 31 January 2022!
- Carmen Diehl celebrated her 5th work anniversary on 8 May 2022!
- Bonita Uris celebrated her 5th work anniversary on 31 March 2022!
- Riduwone Farmer celebrates his 5th work anniversary on 3 July 2022!
We are proud of what you have achieved for RFS and express our sincere gratitude for your loyalty and support over all these years. We look forward to your continued dedication and commitment to the company, its clients and your colleagues!
RFS sponsors NAMCOL achievers
Education is the key to prosperity in any society. To RFS, all forms of education take centre stage in our sponsorship programme. In this endeavour, RFS supports school sports events in various codes. More recently, RFS provided funding for renovating the historic hostel building of Privatschule Grootfontein. RFS’ former managing director was one of the founders of Projekt Lilie in 2005, which RFS has supported ever since. RFS has also sponsored prize monies for NAMCOL achievers for the past eleven years worth N$ 155,500 in total.
RFS director Rauha Hangalo handed over the prize monies of between N$2,500 and N$5,000 to this year’s NAMCOL achievers, in the presence of Dr. Harold Murangi, CEO of NAMCOL and other officials.
This year the following Namcol students excelled in their academic performance:
- Best overall NAMCOL candidate – Richard Iipinge
- Best PETE candidates, per centre – Indira Hoebes, Fabianus Matapa, Nedison Duarte and Richard Iipinge
- Best overall NSSCO Candidate in Accounting – Victor Shipahu
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Indira Hoebes, Nedison Duarte, Richard Iipinge and Fabianus Matapa,
Best PETE candidates per centre
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| Best overall candidate – Richard Iipinge |
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Best overall NSSCO candidate in accounting – Victor Shipahu |
Important circulars issued by RFS
RFS issued no new circular in May. Clients are welcome to contact us if they require a copy of any circular.
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!Kharos
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Your payroll, H.R. and I.R. partner
Do you consider sending your payroll employees to the gym to bulk up so they can cope with cumbersome H.R. processes? Leave the hefty lifting to !Kharos Benefit Solutions and enhance your employees’ experience through a partnership with !Kharos Benefit Solutions.
Empower your employees with !Kharos’ Employee Self-Service portal that allows them to control their personal details, documents, and requests. Rid your H.R. office of time-wasting activities which affects their efficiency negatively and empower them with decreasing turnaround times. Activities like applying for leave, requesting permission for overtime, or claiming traveling and subsistence, should not take days to complete, approve, and process but minutes.
If RFS administers your retirement fund, an interface to its Com_Pen administration platform will cut out manual involvement and risk, improve member records' accuracy and reduce your costs.
At !Kharos, our Payroll Professionals lighten the load of Statutory Compliance and Legislation issues, through our professional relationships and direct system integration. As Payroll Processing demands higher flexibility, companies are driven towards consistent automation.
Leave the heavy lifting to us and enhance your employees’ experience through a partnership with !Kharos.
For a live System Demonstration, contact
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 News from NAMFISA NAMFISA to consult the R.F. industry on standards
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NAMFISA has confirmed that the exhaustive and comprehensive commentary by the industry on the draft standards warrants face-to-face consultations. The latest follow-up on the dates revealed that NAMFISA is in the process of setting up the calendar for these sessions with the industry. RFIN undertook to share the dates with the industry as soon as it received concrete information and possible dates. It is good news for the industry to get the opportunity to engage with NAMFISA.
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Legal snippets
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The Flexible Land Tenure Act and Housing Loans
- part 1
The Flexible Land Tenure Act (Act 4 of 2012) creates two alternative forms of land title that are simpler and cheaper to administer than conventional property title and provide security of title for persons living in informal settlements and who are provided with low-income housing.
In this article we will look at the two alternative forms of title provided for in the Act. In the next newsletter we will consider whether retirement fund members may offer their title in either of these alternative forms as security for a pension backed housing loan.
The two types of forms of land title that are created are: a starter land title and a land hold title.
The Act is not clear about what exactly the differences between the two new titles to lands are. The Act stipulates that a starter title scheme to land can be upgraded to a land hold title scheme, if at least 75% of holders of rights in a starter title scheme have consented thereto. The holders of starter titles who do not agree to the upgrading of the scheme, must be granted starter title rights in a similar scheme by the relevant authority. The Act is silent on what is meant by “upgrading”. This will probably be dealt with in regulations to the Act.
The Act further provides that a starter title scheme or land hold title scheme may be upgraded to full ownership provided the scheme is situated within the area of an approved township. This upgrading can only be done when all holders of rights in a scheme concerned have agreed in writing to the upgrading. If 75% of the holders in the scheme agree with the upgrading, the relevant authority may pay fair compensation to the holders of rights that do not agree with the upgrading. As the holder of a land hold title has all the common law rights an owner of immovable property has, it is not clear what the difference between a land hold title and full ownership is.
From the Act it is clear that owners of a starter title right and land hold title have different rights to the property. A holder of a starter title right has the following rights:
He may erect a dwelling of a specified size and nature at the specified location allocated to him, occupy the dwelling, on his death bequeath the dwelling to his/her heirs and to lease it to another person, transfer his/her rights to any other person based on a transaction recognized by law.
There is a duty on the Registrar to register any transfer of rights of which he/she has been informed or of which he /she has become aware, if he or she is satisfied that the transaction occurred.
A holder of land hold title rights has, subject to the provision of the Act all rights in the plot concerned that an owner has in respect of his/her plot under the common law and he/she may perform all juristic acts in relation to the plot that an owner may perform under the common law.
Section 10(5) of the Act requires that the following transactions may only be performed by registration in the land hold title register: the transfer of the rights to another holder, the creation or cancellation of a mortgage or any other form of security for a debt executable on the plot concerned, creating or cancelling a right of way in favour of the owner of the land or creating or cancelling servitudes regarding water, electricity or similar services.
These two new types of property have a lot in common with sectional title schemes.
Like sectional title schemes, land hold title schemes have “common property” being that part of a block-erf concerned, that does not form part of any plot;
Starter land title and land holder title schemes have associations, owners have a right to be members of. These associations are similar to body corporates in sectional title schemes. In the case of associations of a starter land title, the association also has the right to represent the holders of the rights in negotiations with relevant authorities and to mediate disputes between members of the scheme.
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Snippets for the pension fund industry Preserving for the future and preserving wealth in volatile times
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“Investors have been riding the volatility wave for years. In particular, they have experienced the implosion of I.T. shares with the technology bubble burst, the 9/11 terror attacks in the U.S., the sub-prime lending crisis and the outbreak of the Covid-19 pandemic.
A major concern for most investors during such uncertain times is how best to plan for the future and preserve wealth from one generation to another. Investing in the right assets and understanding the tax consequences is part of the overall consideration.
Specific assets
Gold has remained the ultimate store of value. “Its counteractive nature swings upward when stocks and markets spiral downward,” says Rael Demby, CEO at The South African Gold Coin Exchange (SAGCE)…”
Editors’ note: The reference to donations and capital gains tax is not relevant to Namibia.
Read the article by Amanda Visser in Moneyweb of 9 June 2022, here…
Protecting your portfolio against the next pandemic, war rising inflation, or debt crisis
“We need to know what to do to protect ourselves and our portfolio from different forms of uncertainty.
What are the major risks?
Investment risk is the possibility that an investment’s actual return will differ from its expected return. Risk-averse investors want to avoid this, while risk-seeking investors accept the opportunity in exchange for higher expected returns. Risks come from external forces (world events) and internal forces (like your own behaviour)…
How do we insure against risk?
- Diversify your portfolio
- Manage your emotions
- Trust your advisor
- What about our stock market?
- How does this relate to macroeconomics?
- We can protect ourselves even in a world of uncertainty.”
Read the article by Chrisley Botha, PSG Wealth in Moneyweb of 13 June 2022, here…
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Snippets of general interest
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Behavioural lessons to improve your financial success
In the book, Housel shares various lessons about wealth, greed, and happiness. The core lesson of the book is about behaviour and how people’s wealth or how well they manage their money is not necessarily determined by how much they know (I.Q. or education) but by how they behave. For example, highly intelligent individuals unable to control their emotions can be financial disasters, while ordinary individuals with no financial education can be wealthy if they adopt certain behavioural skills.
Below are some of the lessons in The Psychology of Money that stood out:
- Never enough: Stop moving your goal post. Expectations rise with results, but if expectations rise faster than results, you will never be satisfied and keep on moving your financial goalpost. It is like a dog chasing its tail; it never ends.
- Confounding and compounding: …Good investing isn’t necessarily about earning the highest returns because the highest returns tend to be one-off hits that can’t be repeated. It is about earning pretty good returns that you can stick with and which can be repeated for the longest period of time because that is when compounding runs wild…
- Tails you win: Tails drive everything. A good definition of an investment genius is the man or woman who can do the average thing when all those around them are going crazy.
- Freedom: Freedom in this context refers to the ability to control your own time. Having a strong sense of controlling one’s life is a more dependable predictor of positive feelings of well-being than any of the objective conditions of life we have considered.”
- Save money: According to Housel, “Saving is the gap between your ego and your income, and wealth is what you don’t see.”
Read the article by Werner Erasmus, Overberg Asset Management of 31 May, here...
These are the nine best universities in S.A.
“Quacquarelli Symonds has published its latest Q.S. World University Ranking for 2023 showing that the University of the Witwatersrand, Johannesburg, has given way to a new number-two in South Africa.
Neighbouring institution, the University of Johannesburg (U.J.) has continued to climb the global list over the past four years to become the second-highest ranked university in the country…”
| Average years relevant experience |
2022 |
2023 |
| University of Cape Town |
226 |
237 |
| University of Johannesburg |
434 |
412 |
| University of the Witwatersrand |
424 |
428 |
| Stellenbosch University |
482 |
454 |
| University of Pretoria |
601-650 |
591-600 |
| Rhodes University |
801-1000 |
801-1000 |
| University of KwaZulu-Natal |
801-1000 |
801-1000 |
| North-West University |
1001-1200 |
1001-1200 |
| University of the Western Cape |
1001-1200 |
1001-1200 |
Read the article by Staff Writer in Businesstech of 9 June 2022, here…
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And finally...
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Great quotes have an incredible ability
to put things in perspective.
"The truth is rarely pure and never simple."
~ Oscar Wilde
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Disclaimer
Whilst we have taken all reasonable measures to ensure that the results reflected herein are correct, Benchmark Retirement Fund and RFS Namibia (Pty) Ltd do not accept any liability for the accuracy of the information and no decision should be taken on the basis of the information contained herein before confirming the detail with the relevant portfolio manager.
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