In its 2019 Election Manifesto, the ANC says it will “Investigate the introduction of prescribed assets on financial institutions’ funds to mobilise funds within a regulatory framework for socially productive investments (including housing, infrastructure for social and economic development and township and village economy) and job creation while considering the risk profiles of the affected entities”.

What currently is in place are conditions laid out by regulation 28 of the Pension Funds Act, which restricts exposure of retirement funds to no more than 75% in equities. This in itself is inhibiting. Whilst the intention is to add some stability to retirement savings have 25% forced into bonds and cash the upside presented by equities over the long term is restricted. If one could invest 100% in equities over the long term the returns would likely outperform by far. 

Forcing retirement fund managers to invest in prescribed assets poses a problem around expected returns and asset allocation in portfolios. Fund managers of various collective investments follow a particular mandate which aims to achieve returns through strategies which they identify and provide. Having to invest in prescribed assets takes away the ability to invest where opportunities present themselves. If, for example, a client wanted to take an aggressive approach to his retirement funding, future returns would be hampered significantly if the fund was compelled to invest in assets which did not provide the same returns found in aggressive assets such as equities. 

Let’s hope that this is just political noise building on the elections this year. The pension funds industry is around R4 trillion and should be left well alone to the investors to decide how their money should be allocated. Prescribed assets provide funding which props up underperformance

Yes, history is a perfect science. We now can clearly see where Bitcoin and other cryptocurrencies are and have been. The frenzy leading to the peak at the end of 2017 at $20 000 left many in a state of awesome wonder. Wondering whether they should buy, sell or hold. Social media drove the hype with all types of stories of how top investors were investing millions into the leading crypto’s creating huge momentum in pushing up the price.

The scheme exposed

Cryptocurrencies have all realised the inevitable. They have all fallen from the dizzy heights in which they were driven through falsehoods and exaggerated expectations. Leaving many speculators (not investors) bruised and disillusioned.

Lessons learned

From my Blog posted on 14 September 2017, I found 3 reasons for not being involved with Bitcoin. These are now lessons learned.

• If you don’t understand what Bitcoin is
• If you think Bitcoin will increase as it did in the past
• If you don’t have funds you can afford to lose

Where to from here?

Cryptocurrencies have paved the way for our financial future. Blockchain technology is an appealing way forward. So the offering is found in the transactional potential, not the wallet. Once regulated the crypto will settle. 

Be aware! Get-rich-quick schemes are full of vagaries.