MyMoney Online

Black Monday … a dress rehearsal of things to come?

This week saw trillions wiped off global markets in a very short space of time as investors panicked over the developments in China. By the end of the week some stability was restored mainly in US but other markets, especially emerging ones, were left battered and bruised. South Africa was a victim of the carnage. Was this a dress rehearsal of things to come? Or are we through the worst? What we can learn from this week is how volatile things are around the world. So what are 3 concerns for South Africans in the face of this risk?

A weaker rand

The rand easily found R14 to the dollar in no time before settling back to its current range. This showed how vulnerable our currency is during a panic. This has a knock on effect on our imports which in turn impacts on our inflation resulting in more pressure on households.

Increase in interest rates

The Reserve Bank has been very hawkish over the rising inflation rate and we are already in an upward interest rate cycle. It is likely that interest rates will move upwards which again adds more pressure on households.

The risk of losing capital

The stock market has corrected during the week but by no means is the risk off. Valuations are still very high relative to the fundamentals and returns will be affected. In the short term you can expect big swings as markets navigate through the uncertainty.

So what can we do?

It is far easier to change your sails before the storm than during one.

This week sent out a strong signal to all of us. We need to get our personal finances in order, curb spending and get debt under control. Yes, it’s about tightening your already strained budget and squeezing out whatever you can, diverting the savings to pay off debt. In the short term the savings on high interest bearing debt will be a much better bet than the probable yield on the markets.


Read More
'The South African stock market is massively hedged against a weak rand'

'The South African stock market is massively hedged against a weak rand'

The Money Show’s Bruce Whitfield interviews Galileo Capital Personal Financial Advisor Warren Ingram.

3 shares that’ll boost your wealth, if you buy now (by Cannon Asset Managers)

3 shares that’ll boost your wealth, if you buy now (by Cannon Asset Managers)

The Money Show’s Bruce Whitfield interviews Cannon Asset Managers Portfolio Manager Samantha Steyn.

6 tips on how to avoid overspending this festive season

6 tips on how to avoid overspending this festive season

The Money Show’s Bruce Whitfield interviews Galileo Capital Personal Financial Advisor Warren Ingram.

3 shares you’ll do well to buy this week (by Cartesian Capital)

3 shares you’ll do well to buy this week (by Cartesian Capital)

It’s Stock Pick Monday on The Money Show. Bruce Whitfield interviews Cartesian Capital CEO Anthea Gardner.

3 shares that’ll grow you wealth, right now (First Avenue Investment Management)

3 shares that’ll grow you wealth, right now (First Avenue Investment Management)

The Money Show’s Bruce Whitfield interviews investment analyst Nadim Mohamed.

3 shares that should do very well, if you buy them now (by FNB Securities)

3 shares that should do very well, if you buy them now (by FNB Securities)

The Money Show’s Bruce Whitfield interviews FNB Securities Head of Research Chantal Marx.

Popular articles
So what exactly is radical economic transformation?

So what exactly is radical economic transformation?

Wits associate professor of economics Christopher Malikane speaks to Azania Mosaka about the term that is being bandied about.

Shop 'til you drop: The top 'Black Friday' deals this week

Shop 'til you drop: The top 'Black Friday' deals this week

Start your Christmas shopping off with a bang at these major retailers offering some impressive discounted sales for Black Friday.

Pamela Nomvete on her downfalls as actress, and 'climbing back'

Pamela Nomvete on her downfalls as actress, and 'climbing back'

This week Xolani Gwala's speaks to former Generations actor Pamela Nomvete for #WhatInTheWorldHappenedTo feature.

How Naspers paid peanuts for Tencent (China’s most valuable company)

How Naspers paid peanuts for Tencent (China’s most valuable company)

In 2001 Naspers invested $32 million in (then tiny) Tencent. Learn more about the wildly profitable Chinese behemoth...

'The university degree is dead'

'The university degree is dead'

Flux Trends founder Dion Chang gives five reasons why he believes getting a degree is past its sell by date.

3 easy questions could bag you R2000!

3 easy questions could bag you R2000!

WIN R2000! But only if you can prove you're a whiz of the MTN Biz Quiz by answering the following three questions...

Blesserfinder: Matching you with a sugar daddy near you

Blesserfinder: Matching you with a sugar daddy near you

Is social trend Blesserfinder, where girls are allegedly matching up with rich 'benefactors' in exchange for sex, a real thing?