While no one has a ball of fortune with which to predict the future, there are some common mistakes that many investors make, which can be avoided.

The basics of investing can seem relatively simple, but it is important to set emotions aside in order to maintain an objective strategy that will benefit you in the long-run, and this can sometimes be quite hard to do. It is, therefore, very helpful to follow certain mechanisms to control or limit bad investment decisions.

Having recently researched some articles on Investopedia and USnews –

Here are 5 tips to take into consideration:

1. Look at the big picture and don’t just make decisions in isolation. Rather examine the potential impact that each decision could have on an entire portfolio. Failure to do this can result in you investing too much in a single asset class, industry, or geographic market. Instead of going all in with one investment, it would arguably be better to stay informed about a wide range of options that can complement each other, diversify your risk and help you to achieve your long-term goals.

2. Establish your goal horizon, then make decisions accordingly. Don’t just ignore the potential of long-term wealth accumulation in favour of short-term returns. Statistically, losses happen more frequently over a short timeframe and, as people tend to be very sensitive to losses, a behavioural phenomenon known as ‘myopic loss aversion’ occurs, which affects willingness to take short-term risks. This, in turn, results in people making emotion-based investment decisions that can have a negative effect on a portfolio.

3. Don’t just follow the crowd or do what’s comfortable in bullish or bearish market conditions. A good investment strategy is to buy low and sell high, but if you follow the masses blindly, it’s easy to end up buying high and selling low, which may have opposite results and prevent you from taking advantage of the same market opportunities. A buy-and-hold strategy is often far superior.

If you know that you can be prone to having knee-jerk reactions, you may wish to try to avoid constant information about how the market or your portfolio is performing, so that you can just focus on sticking to your long-term investment strategy. Don’t chase the news or get swept away by rumours and hot tips.

It’s also a good idea to do some research before jumping in, so that you have made a basic analysis of any weaknesses or values. Rather than following the rumour mill, it is better to make investments in things you understand.

4. Don’t trade too frequently — especially if you are prone to having a sometimes irrational bias towards action — as this can result in higher investment costs and an increase in making poor decisions.

If you ever have itchy feet, it can often be a good idea to wait a few days before executing a big financial decision and seek advice by organising a meeting to discuss an option.

5. Don’t invest money that you cannot afford to lose, as it’s important to keep cash on the side for emergencies and opportunities. You may not feel happy having some of your money just sitting there, not earning any returns, but having all your money tied up in the market is a risk that’s arguably not worth taking.

To help you make healthy financial decisions, set yourself some rules, such as only contributing a percentage of your monthly income; and establish some realistic targets, such as aiming to save a certain amount of money by the end of the year. Some people can even find it helpful to limit their options by purchasing more illiquid investments to avoid the urge to simply sell or switch on a whim or when the markets aren’t performing as desired.

Many people also find delegation a handy tool. By delegating your financial decisions to a professional who you trust to manage your portfolio, you can spare yourself a lot of stress and rest assured that you will receive sound advice as to how best to execute your financial plan to achieve your goals.

Find out more:

Investopedia
Money US News

A study conducted a few years ago on behalf of the Association for Savings and Investments in South Africa indicated that over 12 million of the country’s workforce were underinsured in terms of life and disability cover. Furthermore, reviews by various insurance companies highlighted that this shortfall fell primarily in the realm of disability cover.

In the event that you are not able to completely (or partly) perform your usual professional duties as a result of a medical condition, impairment, or trauma, then sickness and incapacity benefits are vital in order to ensure your monthly income is covered or supplemented. No insurance company will issue long-term insurance once you have been incapacitated, so it is important to prepare for any unforeseen events in advance and understand the details of your cover. ‘Just in case’ is better than ‘simply too late’.

Your gross professional income will determine the amount for which you can apply, and it is important to acknowledge the value of monthly benefits that will pay out until retirement age, rather than only focusing on lump-sum benefits. If you are employed by a company, you can cover not only loss of income, but also any benefits — such as travel allowance, medical aid and retirement contributions — and even average performance bonuses. If you are self-employed, you can cover the salary that you withdraw from your business, as well as your share in net profits and business expenses.

Depending on your chosen insurance provider, sickness and incapacity benefits may be offered as one product or as three separate products — (1) sickness benefits, (2) temporary incapacity benefits, and (3) permanent incapacity benefits.

A permanent incapacity benefit follows as a natural progression from a sickness benefit. This means that, after you have claimed from your sickness benefit for a certain period of time, if your condition is permanent, your monthly benefit will then be paid from the incapacity cover until the specified retirement age.

When disability claims have been analysed, many insurance companies have found that South Africans tend to only be covered for permanent disability. However, many claims are actually as a result of a temporary disability. For example, unless you are a professional athlete, if you lose or injure a limb, you won’t be regarded as permanently disabled and you will not be able to claim for a permanent disability. Granted, you will need to make significant adjustments to cope with the life-changing circumstances, and you may require a substantial amount of time off work, but you should ultimately be able to return to your job. In an event such as that, you would need to be protected by having sickness and/or temporary incapacity benefits.

Benefits

Benefits can vary depending on your insurer but, generally, listed pregnancy complications are automatically covered (so long as claims criteria are met). A benefit will also be paid in the event of hospitalisation for four or more days due to a pregnancy-related condition​​.

You will also often be entitled to a Family Responsibility Benefit, which allows you to take time off work if one of your family members is hospitalised. This can also provide funds that can be used to cover any non-medical costs that occur as a result of hospitalisation.

When considering sickness and incapacity benefits, you may wish to also add benefits, such as the Child Terminal Illness Benefit and the Child Death Benefit, which enable you to cover costs and support your family during this tragic time.

A Hospital Benefit may also offer extra peace of mind, as this pays an additional amount equal to the sickness benefit if you are hospitalised for four consecutive days or more.

It may be worth considering a Permanent Incapacity Booster as, in the event of permanent incapacitation, this will automatically increase a partial monthly payment to 100% until you reach the selected retirement age.​​​

Whatever benefits you decide to include, it is important to understand the fine print to ensure that you are covered in the face of any disaster — be that temporary or permanent. For example, waiting periods can vary significantly — some insurance companies pay out if you are booked off work for more than seven days, and payment is made retrospectively from the first day; while other insurers have a much longer initial waiting period, and you will not be able to claim your policy if you are booked off work for less than this time. When making your decisions, you may, therefore, need to consider how long you can cope with a loss of income.

Don’t hesitate to arrange a meeting to discuss your options and ensure you are covered in the event of all eventualities.

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PPS

The World Health Organisation (WHO) was founded on 7th April 1948, and this date is celebrated every year as World Health Day, with the goal of drawing attention to a specific global health concern.

Last year, the focus of the campaign was to mobilise action with regards to depression, and the theme for this year will be “Universal Health Coverage: everyone, everywhere.” The slogan and hashtag behind the 2018 drive is #HealthForAll, and the aim is to encourage and support countries to provide quality Universal Health Coverage for all citizens.

It is vital for leaders to understand the importance of investing significantly in human capital, as access to quality care not only improves people’s health and longevity, but it also prevents outbreaks of epidemics, and creates jobs, which in turn alleviates poverty and drives economic growth.

The World Health Organisation supports the principle that all people should have the right to live their life in good health. According to the organisation’s website, the Director-General said that “no one should have to choose between death and financial hardship. No one should have to choose between buying medicine and buying food.”

As WHO is also celebrating a notable rite of passage this year — its 70th anniversary — it is calling on world leaders to follow through on the pledges they made in 2015 when they agreed to the Sustainable Development Goals. From a South African perspective, it is important that we now commit to taking the concrete steps necessary to protect and ameliorate the health of all citizens.

Turning the spotlight on South Africa

Although South Africa does have a public healthcare system, it would be fair to say that it is severely lacking and is often unable to provide the quality of care, equipment, skill and service that citizens need and deserve. And unfortunately, the country still has issues with deadly outbreaks of diseases such as malaria, HIV, rabies and, most recently, listeriosis. These diseases particularly affect the poor, and highlight systemic failures in providing secure shelter and proper sanitation to many South Africans.

Having some form of private medical cover in South Africa is, therefore, still an arguably unavoidable and expensive necessity if you wish to have access to quality medical treatment if the need arises. According to statistics released by the Council for Medical Schemes (CMS), by the end of 2016, there were 82 medical aid schemes operating in South Africa, with a total subscription of just under 8.9 million members; and Discovery remains the country’s largest medical aid provider, with currently over 2.7 million members.

According to an article published on Business Tech, “over the past decade and half, the average year-on-year increase of medical scheme contributions has been 7.6%”. However, due to the country’s recent political and economic turmoil, many people’s salaries have not increased in line with this each year, and many citizens are feeling the financial strain of keeping up with their contributions.

As a result, some people have started looking for cheaper options, which is known as ‘buying down’, and the popularity of hospital plans is on the increase due to its affordability. However, this could have a significant impact on your health and future well-being, as certain schemes do not cover patients in full. Even if it is stated that hospital procedures will be covered 100%, this may mean that you will only be paid out in full for the tariffs that are specified by your scheme, rather than 100% of the actual treatment costs.

For example, if a specialist charges more than your scheme specifies, which is common, you will have to pay the balance yourself, which can be financially crippling. As a result, many South Africans also opt to pay for Gap Cover to cover any differences in rates, and this is yet another cost that must be budgeted each month.

A brighter future

However, the future is looking bright for South Africa now that Cyril Ramaphosa has been elected president and Jacob Zuma has left the building.

According to an article published by Eyewitness News, Ramaphosa has spoken frankly in the past about the country’s ailing health system and “has urged the Treatment Action Campaign (TAC) to take on government, and challenge officials to do more to improve the healthcare system.”
Now that he is president, it is essential that he doesn’t neglect the issue of National Health Insurance (NHI), which is an important implementation that would improve the lives of millions. The urgency of structural change to resolve the country’s crushing inequality should be at the forefront of our new leader’s objectives and, as citizens, it is up to us to collectively push for the right of everyone to have access to quality healthcare — #HealthForAll.
In the meantime, take the time this global awareness day to ensure that you understand the benefits and potential implications of your medical scheme. Rather than opting to ‘buy down’, research your options and don’t skimp on appropriate coverage if you can afford not to.
Don’t hesitate to arrange a meeting to discuss how you can ensure that you and your family are always fully protected in the event of any unfortunate circumstances – get the best advice and make the right choice..

Human Rights Day is celebrated annually in South Africa on 21st March, and is arguably one of the country’s most important public holidays. The commemoration of this day serves as a reminder to all citizens of the country’s struggle for democracy, and the sacrifices that were made on everyone’s behalf to attain the basic rights of dignity, equality and freedom.

As well as being a remembrance of the suffering that was endured in the days of apartheid, this national day is also a celebration of the rights that everyone living in the RSA now enjoys (and often takes for granted).

One of the most notable celebrations is the Cape Town Festival, which aims to promote tolerance and understanding of diversity through performances, workshops and various artistic endeavours. While other events around the country are designed to draw attention to current human rights concerns, such as racism and police brutality.

A bit of background

Back on 21st March 1960, thousands of unarmed South Africans gathered in a township called Sharpeville to peacefully protest against the atrocious apartheid government and its pass laws, which required indigenous adults to carry a passbook with them everywhere (this allowed the regime to control travel and dictate the duration for which black South Africans could stay in white areas).

However, as the crowd grew in size, tensions increased along with the police presence. 150 armed reinforcements and four armoured personnel carriers arrived, and the police eventually opened fire on the crowd, murdering 69 people and injuring 180 more.

This massacre became a turning point in the struggle for human rights in South Africa, which finally came to a head on 27th April 1994 when Nelson Mandela was elected as president. Shortly after his election, Tata Madiba announced 21st March to be Human Rights Day, in order to pay tribute to the people who fought for the freedom of all South Africans.

Know your rights

The South African Constitution protects the human rights of all its citizens. These rights were previously denied to the overwhelming majority of the population, and Human Rights Day thus serves as an important reminder to us all to reinforce our commitment to the Bill of Rights that is specified in the Constitution.

These hard-earned rights stipulate that everyone is equal before the law and thus has the right to equal protection and benefit of the law. The bill also includes the right for inherent human dignity to be respected and protected; the right to freedom of movement and residence anywhere in the country; the right to participate in the cultural life of choice; and the right to peaceful protest.

Financial rights?

Likewise, being financially secure and having access to a certain standard of living is also an important goal that all South Africans should strive for. Knowing how to make your money work for you can greatly relieve stress, as well as improve the quality of your life and afford you the freedom of choice.

Protections and benefits come in different forms, and there are ways to make the most of your earnings so that you can live comfortably and look after your family — even after you’ve gone. The key is to be aware of your entitlements, so that you can maximise your benefits and ensure you are protected in the event of any unforeseen circumstances.

The battle against the oppression of apartheid may have been won, but we still need to fight for the right to financial security. Don’t hesitate to arrange a meeting if you wish to discuss any legislative rights that could help to improve your financial situation.

Being unable to temporarily – or permanently – work as a result of a serious illness or injury can put a serious strain on your financial well-being. In this day and age, an income protection policy can, therefore, prove vital, as it ensures that you will receive tax-free monthly payments if you ever cannot work. Basically, income protection (sometimes called ICB – Income Continuation Benefit) is designed to replace lost income, so that you can maintain the same lifestyle that you enjoyed whilst working.

Whether you’re self-employed or formally employed, protecting your earnings should be considered a critical component of your financial planning portfolio. An income protection policy will help you to remain financially secure, no matter what unforeseeable life event occurs.

It essentially offers the peace of mind that you will always be able to meet your financial obligations and take care of your family, especially given as many employee-sponsored schemes will not provide sufficient cover.

What are the benefits?

Income protection benefits can replace income, service debt and monthly obligations (thereby indirectly protecting your credit rating), provide cover until retirement, and protect you in the event of permanent and temporary disability. As opposed to the traditionally-preferred lump sum disability benefit, income protection benefits are notably easier to claim, involve shorter waiting periods, and allow you to make multiple claims.

As income can be inflation-proofed, one of the benefits of income protection is that it will allow you to maintain your standard of living, rather than need to adjust it to fit a lump sum.

What’s best for you?

Although income protection is often argued as a more desirable option than lump sum disability cover, ultimately these policies are designed to meet different requirements. It is advisable to never rely solely on a lump sum disability benefit to cover an income need, but we may feel that a suitable scenario for you is a combined approach. This should always be discussed, in person, in a proper planning meeting where your full lifestyle financial plan can add valuable context to this decision.

It is also worth noting that any changes in tax legislation may require adjustments, so be sure that you stay informed and understand any implementations that could affect your payments and benefits.

Income benefits have come a long way since the days when only 75% of a client’s income would be covered if they couldn’t work. Recent additional product benefits can include holistic protection against several eventualities that could threaten your earnings, such as family responsibilities and retrenchment.

It is important that your income protection meets your specific needs at a premium that you can afford (while also not placing you at risk of being under-insured), so don’t hesitate to arrange a meeting to discuss your options and ensure you understand the claims criteria. Remember, nothing on our website constitutes actual financial advice, but is aimed to bring context and supporting information to the fore.

Arguably, one of the best things about spring in South Africa — apart from the pleasant weather and the abundance of Easter eggs — is the public holidays!

Many people in South Africa work very hard. Legislation regarding the Basic Conditions of Employment dictate that employees are entitled to 21 consecutive days of annual paid leave, which equates to only 15 working days per year if you work a five-day week, and 18 working days per year if you work a six-day week.

Unfortunately, this isn’t very much compared to many other countries. You may be interested to know that most employees who work a five-day week in England are entitled to at least 28 days of paid annual leave per year, which is equivalent to 5.6 weeks of holiday. However, there’s no use crying over our lot, and there’s not always much we can do about South African legislation. We simply need to make the most of our entitlements, and we can start by being savvy when it comes to how and when we take our leave.

17 DAYS FOR 8
The good news is that there are more public holidays in South Africa than many other countries. And the steady flow of national days in March, April and May make for the perfect excuse to unplug and step away from the daily grind. Already a quarter of the way through the year, you’re in luck if you feel in need of a long break because you can start getting ready for a 17-day holiday that will only use up about half of the basic annual leave.

With a bit of forward thinking, you can really make the most of the sunshine and public holidays at the start of spring. Combined with weekends, Human Rights Day on Wednesday, 21st March, Good Friday on Friday, 30th March and Family Day on Monday, 2nd April mean that if you leave on the evening of Friday, 16th March and return on the evening of Monday, 2nd April, you can turn on your Out-of-Office for 17 glorious days, whilst only needing to apply for eight days of leave. You can start back fresh at work on the morning of Tuesday, 3rd April, with a contented grin on your face, knowing you’ve managed your time and entitlements well.

10 DAYS FOR 4
Don’t despair if you have children and need to fit in with school holidays, as you can still get a good run by going away on the evening of Thursday, 29th March and returning to work on Monday, 9th April. This will make use of Good Friday and Family Day, giving you a 10-day holiday, while only needing to take four days off from work.

5 DAYS FOR 1
And if that weren’t enough, you can also make the most of a lovely long weekend at the end of April — perhaps this could be spent as a romantic couple’s break that would give you and your loved one the chance to spend some quality time together. This year, Friday, 27th April is Freedom Day and Tuesday, 1st May is Worker’s Day, so if you take the initiative to book Monday, 30th April off work, you can kick back and enjoy a five-day break, while only needing to use one day of annual leave.

If you use the time wisely, you stand to get 22 days off work in March and April for just 9 days of annual leave! Once you’ve had the nod of approval, all that remains is to decide where you want to go – or if you even want to go anywhere. Although it is possible to find some great last-minute deals, you could stand to save money and precious holiday time if you make a few preparations and bookings beforehand. So pack your slops and start planning!

(Article ideas from all4women.co.za and iol.co.za)