January 2024 Update
F&A Monthly Update | JANUARY 2024
Many of you would have seen the recent news that we are sticking to our knitting once again. I’d like to unpack that for you and assure you of our professionalism and commitment here.
For the better part of the last decade, I have held the vision that a single house could manage all financial aspects of a personal financial plan. This would result in optimisation of each tailored plan, providing compounding benefits to all. The cornerstone of this view is protected by two key role players, the know-how of the owner of the plan, and the quality of the advice / support team. With us pausing our Wealth Protection department in-house, we will lose direct influence over the following areas: Medical aid, Gap cover and Short-term insurance. That isn’t to say we can’t measure the effectiveness of external providers recommendations, and that is what we will continue to do.
We will still run and manage the engine of the plan, the strategy. Optimising these additional areas is an important detail, but it doesn’t lead strategy. In our instance, F&A continues to play a key role in building and advising upon resilient and efficient financial strategies, and we will continue to focus here!
This isn’t the end of this vision, it is a pause and a recalibration on this special business’s wonderful, adventurous journey.
Sending love
Richard and the F&A team
January 2024 Update
This month's piece is compiled by Brendan de Jongh, SA Head of Research - PortfolioMetrix.
GLOBAL UPDATE
The start of the new year saw a moderation in the exuberance that characterised the end of 2023. Markets, which had leaned heavily towards anticipating rapid central bank rate cuts in 2024 at the close of the previous year, shifted towards expectation of later rate cuts. January brought positive economic data, especially in the US, coupled with slightly higher-than-expected inflation figures. Central banks' communication playing down the chances of a Q1 interest rate cut was slightly negative for bonds, causing yields to rise and prices to fall. The equity market response was mixed but generally positive for developed markets. Lingering weak sentiment in China continued to weigh on emerging markets. Tensions in the Middle East led to a slight increase in energy prices.
LOCAL UPDATE
Local property continued its strong run of performance finishing the month as the best performing asset class for local investors once again. This was in the context of a weak broader local equity market and global real estate struggling as global bond yields rose. Local bonds offered slightly better returns than cash with yields finishing at roughly the same point they started at in the beginning of the month.
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