While no one can predict the outcome of what will transpire in the year to come, the best thing investors can do is to remain disciplined, focused on valuations and identify opportunities in unloved, well-priced asset classes. In this context, volatility in market prices should be welcomed.
It's tough for South Africans to have an optimistic view of the economy, not to mention their local investments. Last year, weaker nominal growth led to disappointment in government revenue collections, while a sovereign downgrade by Moody's is looking increasingly probable in 2020. Eskom continues to keep consumers and cash conservers in the dark.
Add the numerous global risks in trade wars, geopolitical threats and an overhang of debt, underestimating a sharper-than-expected slowdown could spell disaster in 2020.
So what are local investors to do, to weather this looming storm? Should investors be preparing for a light drizzle or a full-on hurricane?
Herman van Papendorp, head of investment research and asset allocation at Momentum Investments warns that financial market volatility is likely to rise in line with the ebb and flow of market sentiment across asset classes.
"Instead, we believe it is prudent to use exposure to defensive asset classes as part of...