Three Big Questions in 2017….

2017 was certainly a year of uncertainty from which many questions were asked.

Here are three of the biggest questions asked from my desk.

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Should I invest in Bitcoin?                                                                                              In hindsight you would have made a fortune. Investing rests on the risk you are prepared to take in relation to your expected return. Therefore, the call is into the future. The surge in the price of Bitcoin to these dizzy heights is a phenomenon to say the least. Yet, do investors really know what they are investing in. Markets do not go up infinitely in a straight line. The fundamental problem with Bitcoin is that investors are speculating on past performance and have a straight line mentality. Some time sooner or later the momentum will shift leaving the newer entrants hung high and dry. The momentum could well shift to fear when the price falls so be very careful.

Is Gold the next best thing?
Ideally, this investment has the protection of the rand weakening as the price of gold is priced in US$. The question looms around the global appetite for gold. The price has been range bound between 1300$ and 1200$ for a while and there is an anticipation of the price moving upwards sharply in the event of a correction in the markets. Be aware of the dynamics – Rand/$ exchange rate and price movement in US$.

Is the rand doomed?                                                                                                      Just when you think that the rand is going to weaken it does the opposite. The recent strength to the R12 to the US$ range proves that our currency is very resilient. This has a direct effect on our inflation numbers and in turn also affects your investment performance with many funds which invest offshore.

The year has been governed by uncertainty and surprises. 2018 will be packed with surprises of this I’m sure. Keep on a fundamental course and try not to be lulled into speculation.