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WHAT’S INSIDE YOUR JANUARY ISSUE: SETTING FINANCIAL GOALS Now is the time to work with your clients to plan their financial futures. These tips will ensure you take all their needs into consideration.
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What lies ahead for 2025?
Four economists share their views on what investors can expect in the year ahead. While they aren’t expecting it to be as unpredictable as 2024, some significant challenges remain.
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SOFTWARE Choosing the right software empowers you to streamline operations, enhance client engagement, ensure compliance and make data-driven decisions. Here’s what you need to know. Pg 16-18
RETIREMENT What’s in store for the retirement insurance industry in 2025? We look at the impact of the two-pot system and investigate where to next. Pg 19-23
TAX UPDATES We update you on the tax issues that are most likely to be in the spotlight in the year ahead. Pg 24-25
Adriaan Pask, CIO at PSG Wealth Ultimately, I am far less concerned than I was this time last year. While some risks remain, they’ve clearly decelerated, significantly reducing the probability of a negative outcome. From a return perspective, there’s still meaningful upside. Overall, we’re in a much better position, which is encouraging. The South African market is the most exciting part of the portfolio right now. The rand still has room to recover, and with the dollar remaining strong, offshore holdings are slightly less attractive in the near term, as a stronger rand could erode returns. Patience will be key for offshore investments, but for now, South Africa offers a promising investment landscape. We see South African equities as a broad opportunity, with share prices catching up to earnings after prolonged pressure, particularly in the banking sector. Even bonds offer potential, with room for yields to decline. Much depends on February’s National Budget
Speech, and we remain hopeful it avoids shocks that unsettle rating agencies. While not broadly negative on the offshore environment, we are focused on the US. China offers opportunities but requires careful assessment of risk-adjusted returns. The UK, however, stands out as an overlooked market. Like South Africa, retail investors have shifted capital toward the US, chasing its recent returns. As the cycle turns and investors reassess valuations more rationally, we expect some of that capital to flow back, unlocking potential opportunities in the UK market. Global government debt, the risk of inflation and excessive asset valuations will be challenges going forward. US government debt levels have created a headwind by borrowing heavily against future growth. Taking on debt is essentially a bet that growth will outpace the rise in debt costs. If that growth fails to materialise, escalating debt and funding costs can become a significant burden. Persistent inflation is concerning. With interest rates remaining high, the government’s annual interest bill on bond issuance now exceeds $1tn, Continued on next page
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