It is very important to note that currency devaluation doesn’t happen in a linear pattern. There are periods when the rand appreciates in value, but the longer-term trend is devaluation. We must, therefore, ask ourselves where the rand will be in the next five-to-ten years? What about timing? Timing It is important to understand that investing is a life-long exercise and we must be mindful to not try and time the market. Timing the market refers to buying in at the right time and then selling again at the right time so that we can then ‘buy back in’ at the optimal time. This is impossible to do on a consistent basis and is a main reason for investor capital loss and disappointment. Examining global market average returns over the last 100 years, the market produced an average annual return of approximately 9%. The average investor’s annual return over the same period was only approximately 5%. The reason for this underperformance is because the average investor did not remain invested. Rather, they tried to time the market by jumping in and out and changed strategies when short term returns didn’t look so great, just as we have seen during 2022. […]
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