Your money wants to live longer – here’s how to invest in a more certain future
Whether you’re an investor aiming for more certainty, more return or more impact, STANLIB has a fund solution for you. The STANLIB Your Money Can Do More podcast series hosted by Bongani Bingwa and STANLIB’s Chief Economist Kevin Lings features experts who will help potential investors navigate and plan for tomorrow, today.
In this episode, Bongani and Kevin speak to scenario strategist, facilitator, speaker, top-selling business author and one of Africa’s most creative strategic thinkers, Chantel Ilbury about future-proofing South Africans’ investments.
What is the future of money and investment in an uncertain world?
The pandemic has forced people to adapt their ways of living and working. This situation, coupled by a raised level of uncertainty about the economic environment makes planning ahead is a scary space to navigate – but STANLIB’s chief economist, Kevin Lings says is still possible to invest and plan for the future.
Across the globe, technology has been on a steady incline, with the increased use of digital workspaces and the implementation of AI (artificial intelligence) looking to shape our future but how ready is South Africa?
I don’t think South Africa is prepared for the future, to be very honest with you… I think, we’re already behind the times in a technological space and I would even bring it as far into our disconnect with education and the future has hit us very quickly as you say, with the pandemic where we’ve had to switch to technology-based engagement platforms.Chantel Ilbury, Director at Mindofafox
I don’t think our education system is ready for technology which is going to be a given – those skills then move into the workspace, which is changing, it’s not traditional as it was in the past.Chantel Ilbury, Director at Mindofafox
Ilbury does not believe that our education system is ready for technology. Considering that, the lack of technological advancement in education that will ultimately move into a workplace that is constantly changing, learning to work with technology is going to be a critical skill in the future.
Doing so will prove to be quite difficult because South Africa is still continuing to educate and grow an economy in a more traditional sense.
The future is going towards technology. Unless we can upskill, I think we’re going to get further and further behind.Chantel Ilbury, Director at Mindofafox
Does this mean that technology is the future of investment… and if our country isn’t up to par right now, should potential investors be looking abroad?
Lings advises that investors should be wary of the fact that any industry is subject to change, regardless of how successful they are currently.
You’ve got to recognise that things change and that you may be in an industry that is flourishing at the moment, but it may not be around in 5 or 10 years time and it’s an important factor that you’ve got to take on board, he says.
You may be investing in some technology company now that seems phenomenally good. Let's take Facebook for example: you think Facebook is really a happening place but who knows? In ten years’ time, it may not exist and we may have other technology. It’s an important lesson. What seems certain now, over the long term, undoubtedly is going to change.Kevin Lings, Chief Economist at STANLIB
According to Lings, 30% of South African corporate and government bonds are owned by foreigners despite the hardships that our country has experienced because they receive a good return on their investment, but he also advises that looking abroad to expand your portfolio is also a wise decision.
Think about all the difficulties that the South African government has gone through in the last 10 years. Think about the deterioration in the fiscal parameters, and you’ll wonder why foreigners are owning 30%. The reason is because they get a very decent return. I think those are the types of messages that we want to get across. Yes, there is a difficult economic environment but that doesn't mean that you can’t invest and plan for the future.Kevin Lings, Chief Economist at STANLIB
Making your money live longer
Scientists have predicted that the first person to live to the age of 150 has already been born. Assuming that some of us might give him a run for his money, how should we think about the future of investment and how long is a good investment period?
We think too short term… We think that 2 or 3 years is a long term of investment whereas, in reality, we’ve got to have a mindset or get closer to a mindset that says 20, 30, 50 years is what we’re really after. It's not just about trying to lock up money for that length of time. It's about understanding the opportunities that are presented to people as they age.”Kevin Lings, Chief Economist at STANLIB
One of STANLIB’s solutions for investors who want to invest for more certainty is the Balanced Cautious Fund which Lings describes as a simple plan for the longer term that invests in different asset classes. The fund aims to deliver long term growth, while protecting capital through diversification. The fund is made up of a diversified spread of investments in equity and non-equity securities, including cash, bonds, and property, which a team of experienced portfolio managers adjust to adapt to changing market dynamics. Equity exposure is capped at 40% of the portfolio and the fund invests in South African and foreign investment markets.
To find out more about how STANLIB is helping and preparing their clients’ investments for the future, visit www.STANLIB.com/more now!