Page 28 - Waterfall January 2022

Waterfall News

invEsTing

oFFshoRE?

hoW muCh?

By Adriaan Pask

Is the grass really greener L ocal investors might think the
grass is greener on the other
on the other side? side due to the myriad of
challenges our country faces.
In recent months, however, we have
seen some of the country’s largest and
most reputable investment managers
warm up to domestic assets, often
citing that poor sentiment has created
an opportunity too attractive to ignore.
So, how do you decide how much of
your funds to invest offshore
and how much to
invest locally?

sA versus offshore
Making decisions solely based on
the past can prove quite costly. Our
research shows that, over the next
10 years, the uS stock market will
likely underperform compared with
the past 10 years by a long margin.
Similarly, the prospects for SA
investments seem much better than
what was experienced in the recent
past. This argument does not revolve
around economic growth prospects,
but rather around valuations. At
this stage, it seems all but certain
that the uS economy will continue
to benefit and grow from masses
of monetary and fiscal stimulus,
whereas the local economy remains
trapped in a dangerous chokehold
of poverty, unemployment,
and weak productivity.

The problem is that the strength of
an economy is not always the best

26 Waterfall Issue 1 2022