May 31

Financial Maturity

As I sit here in my nuclear fall out shatter, banned by my editor from mentioning soccer and yet  surrounded by tofu and recently stocked up supplies of low fat yoghurt, olives and other essential supplies I wonder if I will survive the World Cup food shortages (sorry Ed)! There has been a run on sushi, soft cheese and salami but there did appear to be lots of people buying up wine, especially the expensive French fizzy variety.

Yes these are strange days are they not? A new British Prime Minister, cheap pounds available at 11 to the rand and a distinct lack of Match (FIFA) representatives available to take responsibility for all the unsold accommodation (hence the availability of caviar and oysters in the local Spar) and the sudden realization that it’s all about football or if you prefer soccer, not property speculation!

So if you are a buyer of property hang on until September, you may get a gem, if you are a seller tough luck until next year when the back log of all those properties held onto by people to maximize their nonexistent World Cup rentals get cleared out.

We are finally days away from kick off and rather than food shortages its empty hotels and B&B’s, as well as the sudden availability of flights that has taken most by surprise.

The Eurozone is wobbly, the SA property bubble about to get smacked by a double dipper and yet our currency, œrelatively speaking, looks great. Well at least against the sickly Euro and sterling.

What should I do, I hear you ask? Well if I was you, which I am, then I would invest in quality shares and hold them. Three years from now they will have given you the return you deserve and you will be holding quality.

Don’t sit in cash or you may get slaughtered, but you must invest around 15-20% internationally and use the weak pound as an opportunity to get your cash externalised. Remember that you don’t actually have to transfer money out directly, you can use an asset swap and that is a very simple way of holding foreign assets.

Talk to your advisor or even email me, I will be able to point you in the right direction. Only 18 months ago in 2008 the rand was at 15 to the pound.

Today it is at 11, so if you asset swap today into quality international stocks and the exchange rate moves back to 15 you make 36%, that is excluding what you make of the stocks themselves.

To finish up, here is a little quiz on the World Cup. You probably already know that when England won the cup at home in 66 they had the same group as SA in 2010, Mexico, Uruguay and France. But did you know that just four countries have, between them, been in every single final, can you name them?

Germany, Brazil, Italy and Mr. Maradona’s Argentina! Don’t forget if you need advice on asset swaps, I just don’t have the space here as I needed to get my soccer trivia in!

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