Nigeria, Namibia, Indonesia, India, Spain, South Africa, …. Elections Everywhere. It seems like 2019 is the year of elections.
As citizens, we are all interested and invested (in the broadest sense of the word) in the outcome of the election in South Africa, and maybe even in some other countries’ elections too. We hope that the party that we support will be significantly stronger in this election than in the previous one. We are nervous of the parties that we believe to have policies that may affect our interests and aspirations. We hope that they do not get into power.
Ultimately though, we want to protect our interests; which includes our financial interests, the education of our children, our safety, our rights, our jobs, how our taxes are used and our ability to access quality basic services. Whilst some of these interests may be selfish, it also likely includes broader societal interests. We vote hoping that the party that comes into power, will protect our interests and be beneficial to the broader society too. Arguably though, most of us may be looking at the wrong place if we are hoping that politicians will advance our interests – the state of politics and the quality of politicians in our country, magnified by the social media voice, is dire. Politics seems to attract those that have a high degree of self-interest. That, however, does not mean that we shouldn’t vote.
Whilst we have a duty to think carefully about who we will vote for and then to cast our vote; we can do a lot more individually to improve our lot and to improve the lot of our fellow citizens.
We worry about the risks that we cannot control, like how politicians will behave once they have been elected. Yet, we have many decisions that we can control and we can mitigate some of the risks of poor political appointments.
We can take active decisions about which schools we send our kids to; which causes we advocate and the organisations that we join; how we spend our money; how much we save and where we invest; how we manage or insure against risks; whether we forego an item of luxury today for a bit more security when we retire.
What decisions have you made between investing for the future versus living the life today? Which option have you chosen for your retirement fund? How much risk are you willing to take on your investments? What portion of your investments should be invested in offshore assets?
You should think about this carefully, taking into account the environment that we find ourselves in.
Recent decisions we have taken at Lunar Capital
We are cognisant of the impact that the elections can have on our investments. However, this is not the only factor that we consider when making investment decisions. We consider the economic environment, individual companies and their respective valuations, demographic trends, risks, and the overall construction of our portfolio; when we make decisions on what, where and how much we will invest.
The graphs below show our portfolio construction at the moment:
Approximately 36% of our portfolio is in offshore assets, 9% in cash and the portfolio is reasonably diversified across industries and geographies.
These represent our views that there is value in the local market, but there are risks and it is, therefore, important to have a meaningful offshore exposure. We are always on the lookout for opportunities for new investments as well as risks in our existing investments.
Just as we have choices and make decisions at Lunar Capital, you too have certain choices and you too can make decisions. Understand the choices that you have and make the decisions to advance your and your family’s long-term well-being.