INTRODUCTION Marilize Lansdell CEO PSG Wealth

Given ongoing market volatility, this edition of our newsletter has a strong focus on ways to navigate turbulent times. Adriaan Pask, our Chief Investment Officer, illustrates the importance of positioning portfolios with a long-term mindset and shows that extreme conservatism, despite offering short-term peace of mind, may have detrimental long-term impacts. Lizé Visser, Executive Director of Sales and Client-centricity, considers how to avoid making emotive short-term decisions despite the negative news flow. From a different viewpoint, Shaun van den Berg, Head of Client Education, and Pierre Hageman, Senior Derivative and Equity Trader, consider how, if you have the right expertise and discipline, you can take advantage of market volatility. Shaun explains the benefits of having a share trading strategy in place and Pierre provides an overview of more sophisticated derivative instruments. Finally, in our quarterly estate planning feature, Willie Fourie, Head of Estate and Trust Services, sets out important considerations when dealing with a trust.

Welcome to the latest edition of The Wealth Perspective Yet again, this edition follows a volatile quarter in the markets and we have themed our newsletter accordingly. We hope that the insights we have collated – both to support you in managing your portfolios and to remind you that turbulent times also bring opportunity – will be of value.

A surprise vote by the British threw markets into turmoil Arguably, the defining event of the past quarter was Britain’s vote to exit from the European Union (EU) – the so-called ‘Brexit’. On 24 June, world markets opened to the news that British voters had opted to leave the EU, against general expectation. Shortly thereafter, David Cameron resigned as British Prime Minister. Global markets fell sharply, along with the British pound, South African rand and other emerging market currencies. In contrast, the gold price and US dollar – both deemed safer havens – rallied. Markets are still feeling the aftershock of the surprise vote, and general market uncertainty prevails.

On a related note, Lizé Visser shares some insights from Carl Richards, a US-based certified financial planner. Carl is passionate about helping fellow advisers and clients alike to make better long-term investment decisions, by using simple diagrams and explanations. We hope that you find the simplicity of his approach refreshing.

Volatility also offers trading opportunities

Volatility can create opportunities for traders to capitalise on temporary pricing anomalies. In his article, Shaun van den Berg sets out the necessary foundation for successful share trading: how to manage information overload, determine and stick to an investment style and strategy, and navigate market volatility. For more experienced traders, Pierre Hageman provides an overview of derivative instruments.

We welcome your feedback We hope you enjoy the read. Please share any feedback you might have – we always appreciate hearing from you.

In times like these, sticking to your long-term strategy is critical

It is easy to get caught up in the negative news flow – it’s only human nature. However, this is when your commitment to a long-term strategy becomes even more important. In his article, Adriaan Pask takes a look at the tendency investors have to allocate too great a weighting to their cash holdings in times of uncertainty. While this may offer short-term peace of mind, the article illustrates the importance of equity exposure in generating long-term returns and makes the important point that market risk is not the only risk to consider.

SECOND QUARTER 2016