Is now a good time to invest offshore?

I would like to invest some money offshore, but I’m not sure if doing so will yield better returns with the current state of global markets. What should I do?

Name withheld

Adriaan Pask, chief investment officer at PSG Wealth, responds: Offshore investment plays a very important role in the diversification and risk management within a portfolio. However, when it comes to financial advice we need to consider that each person’s circumstances are varied, and this will affect the approach.

Due to the numerous challenges that South Africa faces, the opportunities might seem brighter on the other side. However, we’ve seen some of the country’s largest investment managers warm up to domestic assets lately. That said, how do you decide how much of your funds to invest offshore versus locally? Our valuation process shows the prospects for SA investments are currently more positive than over the last ten years. When local and offshore valuations are similar, by all means, go where there is growth. However, in the current environment, valuations are so high in the US, our belief is that earnings will only allow firms to grow into their steep valuations, and don’t expect much further multiple expansion. Even though we need a lot of improvement to turn the South African economy around, the same does not apply to the investment landscape.

Any decision to invest offshore

should be considered carefully, so using a skilled financial adviser is a key component to making your money grow.

Holistic plan to manage money When it comes to a holistic approach to my finances, what are the most important aspects to consider?

Richus Nel, a financial planner at PSG Wealth, responds: A holistic financial plan consists of many aspects and can therefore take years to organise and finance. Although a plan is required to help you stay on your own personal financial path, the differentiating factor between financial success and failure lies with your own mindset. It’s also important to realise that the responsibility for your financial future rests on your shoulders alone. Holistic financial advice starts with being prepared for financial eventualities. Examples include:

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Understanding how illness, disability, death, redundancy, bankruptcy, and divorce might financially affect you and your dependants;

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Protecting against losses, such as property damage and personal liability, that will ruin your financial plans.

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Understanding the impact buying or renting a property will have on your financial obligations during retirement;

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Actively planning your career, which remains the starting point for obtaining financial resources; ♦

Considering these eventualities in your own business, if you’re a business owner.

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Optimising retirement planning and estate planning for your retirement/succession needs in a cost/tax efficient manner.

A well-tested plan puts you ahead of those curve balls that

life will throw at you. Always include a Certified Financial Planner when considering these possibilities, as the challenge remains in the detail of choice.