The global energy crisis is weakening the Rand

Why is the Rand weakening?

In general, our local energy supply constraints along with the global sentiment moving funds to less risky asset classes, as China growth concerns is causing a more hawkish sentiment amongst investors. In turn, the Rand also takes a beating as it falls under the more exotic currencies which forms part of the riskier asset classes.

On the other hand, the global energy shortage in Europe and China is causing concern amongst investors as speculation around a similar situation in the US causes investors to move their funds to less risky asset classes and more so towards asset classes that acts as hedge against inflation.

What does a weaker Rand mean for South Africans?

For starters, South Africans have already been hit with increased fuel prices, in fact, in some aspects with the biggest increase in years. This will inevitably drive costs up for all goods and services in the country which causes the local consumer to have less disposable income and looking at the bigger picture, it drives up inflation.

Higher inflation means that the Rands in your investment portfolios and savings accounts are worth less. This has various spill-over effects in the form of the funds that you have put out for your retirement or for your financial well-being in the future is now becoming worth less at an increased pace. What does this mean for South Africans? You would most likely be forced to work longer than initially planned and forced to retire at a later stage in your life or you would drastically have to reduce your expenditure meaning that your livelihood will directly be affected.

See a qualified and experience Financial Advisor.

Hedging your financial future against a weakening Rand is not an easy task and it will be useful to see a qualified and accredited Financial Advisor before doing so. If you are investing funds that you have future requirements for, it would always be to your advantage to get an opinion from a professional or from a seasoned person within the industry.

Visit our website to see how we can help you with structuring an efficient, well-suited investment plan that will help you reach your future investment goals!

Who are we?

Caveat Capital Management is a strategic advisory firm based in Cape Town. Caveat Capital Management specializes in structuring tailor-made investment portfolios that serve your needs now and grow with you as your needs change. Caveat works to maximize your gains and minimize the risk.

What we offer

Caveat Capital Management has a competitive fee structure that incentivizes the portfolio manager to perform and the remuneration is highly linked to the performance of the portfolio. Caveat Capital MGMT (Pty) Ltd is a CATII – Authorized Financial Services Provider (FSP no. 24777) registered at the South African Financial Services Conduct Authority (FSCA). Meaning that we have the required licensing to structure full-discretionary portfolios structured to your needs.

Disclaimer

This report does not guarantee the suitability or potential value of any information or particular investment source. The information provided is not intended to, nor does it constitute financial, tax, legal, investment or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified financial adviser. Nothing contained in this publication constitutes a solicitation, recommendation, endorsement or offer by Caveat Capital Management, but is merely an invitation to do business.

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The information in and content of this publication are provided by Caveat Capital Management as general information about the company and its products and services. Caveat Capital Management does not guarantee the suitability or potential value of any information or particular investment source. The information provided is not intended to, nor does it constitute financial, tax, legal, investment or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified financial adviser. Nothing contained in this publication constitutes a solicitation, recommendation, endorsement or offer by Caveat Capital Management, but is merely an invitation to do business.

Caveat Capital Management has taken and will continue to take care that all information provided, in so far as this is under its control, is true and correct. However, Caveat Capital Management shall not be responsible for and therefore disclaims any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered as a result of or which may be attributable, directly or indirectly, to the use of or reliance upon any information provided. Past performance is not an indication of future performance. Caveat Capital Management does not provide any guarantee regarding capital or performance.

Caveat Capital MGMT (Pty) Ltd is a CATII – Authorized Financial Services Provider (FSP no. 24777) registered at the South African Financial Services Conduct Authority (FSCA).