Hot tip! Trying to predict the markets is for losers
Everybody has a plan until they get punched in the mouth.Mike Tyson
The Johannesburg Stock Exchange (JSE) was up 7.1% in just the first three months of the year, despite extreme pessimism and apocalyptic forecasts made at the end of 2018.
Some of the most significant contributors to the JSE’s good fortunes were equally unexpected.
Last year when US regulators targeted nicotine levels in cigarettes, and vaping products become more popular, few would have made a bet on British American Tobacco (BAT), yet it’s up nearly 30% in Q1/2019.
Everyone and their aunties predicted a slowdown in demand for luxury goods, yet Richemont surged by more than 10% in the first quarter.
Similarly, with the spate of load-shedding we saw in recent weeks and the plethora of bad economic news, few investors made bets on the rand, yet it strengthened by as much as 50 cents in a few days.
Ingram says he knows many “talking heads” who predicted the end of the JSE and advised investors to send everything offshore.
If you had done this at the start of the year, you would have lost out.
Even residential property – against all the odds – is up for the first time in two years.
Ingram said investors must beware of predictions for the rest of 2019 as a whole range of outcomes is possible.
The JSE could get a boost if Donald Trump’s trade war with China ends.
Or, the trade war may escalate.
South Africa may get a great Cabinet after the election or – against expectations – a credible plan for restructuring Eskom.
Or, Eskom can implode, taking us all down with it.
Nobody, that’ who.
For now, said Ingram, it’s best to have a strategic, long-term investment focus.
Don’t get emotional about the news.
Take decisions very slowly.
For more detail listen to the interview in the audio below.
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