<!-- wp:paragraph --><p>In a world where a financial disparity between men and women still exists, women have some distinct advantages when it comes to investment, writes <strong>Deputy CEO of Momentum Metropolitan and CEO of Momentum Investments, Jeanette Marais.</strong></p><!-- /wp:paragraph --><!-- wp:paragraph --><p>We cannot deny that there is still a financial earnings gap between men and women, especially when it comes to money. Yet, when it comes to investing, women have inherent advantages over their male counterparts.&nbsp;&nbsp;</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>In the latest episode of money show Geldhelde on VIA (DStv channel 147), we addressed this topic – looking at some of the traits women have that make us good investors and, importantly, how to harness them.&nbsp;</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>As a woman who has built her career in this field, I can confidently say that women should use their natural born talent for investment.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>A 2019 study by the Warwick Business School found that women outperform men by 1.8% on investment returns. They did this by analysing the behaviour and returns of 2800 investors over three years by looking at a range of differences between the genders and investment behaviour.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>The study shows that, generally, women tend to take a longer-view perspective and trade less frequently. This reveals a more considered approach by women, with greater focus being placed on the realisation of a financial goal, rather than the thrill of investing.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>If women opt to play to their strengths, they would soon realise that these qualities have resulted in our superior investment prowess and form the basis of Momentum Investments’ underlying philosophy of outcome-based investing. Staying invested over the long-term produces superior returns, which is why we follow an outcomes-based investment philosophy that aims to shift investors’ focus away from tracking performance and towards their personal investment objectives.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>And when we consider the fact that we’re already on the financial back foot in terms of earnings, that we tend to outlive our male friends (so our money needs to last longer) and that we often need to juggle work, children, and other household responsibilities – the need for us to harness these inherent investment traits is even more evident.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>So, for all the women out there who want to seize their natural investment power, here are seven quick tips to kick off your investment journey:</p><!-- /wp:paragraph --><!-- wp:list {"ordered":true,"type":"1"} --><ol type="1"><li><strong>Advice should come first</strong></li></ol><!-- /wp:list --><!-- wp:paragraph --><p>Momentum’s Household Financial Wealth Index indicates that only two in ten women are likely to obtain professional financial advice. It is important for women to partner with a professional financial adviser or mentor that understands, respects, and takes their unique needs into consideration.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>This is the fastest and most reliable way to get on your journey to success.</p><!-- /wp:paragraph --><!-- wp:list {"ordered":true,"type":"1","start":2} --><ol type="1" start="2"><li><strong>Make bold choices</strong></li></ol><!-- /wp:list --><!-- wp:paragraph --><p>Historically there has been no better way to grow your money than through investing. There is no denying that investing comes with its share of risks – but, choosing not to invest is even riskier. If you are just starting to invest, the best thing to do is to talk to your financial adviser to help you kick start your investing journey. Chat to your adviser about the importance building a diversified investment portfolio that includes investing a portion of your money offshore.</p><!-- /wp:paragraph --><!-- wp:list {"ordered":true,"type":"1","start":3} --><ol type="1" start="3"><li><strong>Compound your interest</strong></li></ol><!-- /wp:list --><!-- wp:paragraph --><p>The magic of compound interest will grow your investment exponentially over time. Bear in mind that you need a lot of time to achieve meaningful growth.&nbsp;</p><!-- /wp:paragraph --><!-- wp:list {"ordered":true,"type":"1","start":4} --><ol type="1" start="4"><li><strong>Avoid the switch itch</strong></li></ol><!-- /wp:list --><!-- wp:paragraph --><p>Investors are 2.5 times more likely to switch funds as a result of their current fund performing poorly, than as a result of another fund performing exceptionally well. Even when the markets get rocky, try stick with your investment strategy and portfolio choice. There will be times when you have the urge to switch investment funds, but don’t chop and change – research says that in almost every case you’ll be worse off financially.</p><!-- /wp:paragraph --><!-- wp:list {"ordered":true,"type":"1","start":5} --><ol type="1" start="5"><li><strong>Pay off your bond</strong></li></ol><!-- /wp:list --><!-- wp:paragraph --><p>Owning the house that you live in is the best risk-adjusted investment you will ever make. So, paying a little bit extra on your bond every month is the right choice, but taking extra money out of your bond and spending it on consumer goods is a poor financial decision.</p><!-- /wp:paragraph -->

<!-- wp:paragraph --><p><strong>By Reza Hendrickse, PPS Investments Portfolio Manager</strong></p><!-- /wp:paragraph --><!-- wp:heading {"level":3} --><h3><strong>Investment Perspectives:  Q1 2021</strong></h3><!-- /wp:heading --><!-- wp:paragraph --><p>Since the equity markets bottomed a year ago after one of the sharpest sell-offs in history, life and the economy have yet to return to normal. However, financial markets continue to look beyond the current reality, toward a rosier future. </p><!-- /wp:paragraph --><!-- wp:paragraph --><p>This quarter equity markets once again showed impressive strength, with SA growth assets performing particularly well. Last year global growth was non-existent, but where we currently stand, there are concerns that growth might be too strong, causing market participants to reflect on what this could mean for the future. Even South Africa is rebounding at a reasonable pace (albeit from a depressed base) while, beneath the surface, the National Budget was positive this quarter. The relative performance of developed versus emerging markets, value versus growth stocks and cyclicals versus defensives, were all among topics which were passionately debated by market participants this quarter. Other topics of interest also included the growing prevalence of speculative forces in the markets and how to protect against inflation inevitably materialising.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>There was a continuation of the bullish undertone which has been a feature of markets over the last few quarters. South African equity, as measured by the FTSE/JSE Capped SWIX, was the best performing asset class (+12.6%), driven primarily by resource and industrial shares, while financials posted low single digit performance overall. Among financials, SA listed property counters were some of the best performers, with the sector rebounding (+8.1%) off its low base. Strong appetite for local risk assets led to these asset classes significantly outperforming bonds, with the All-Bond Index declining for the quarter (-1.7%). SA asset classes have delivered handsomely over the past 12 months (i.e., roughly since the depths of the COVID-19 sell-off), with SA equity up 54.2%, SA property up 34.2%, and SA nominal bonds up 17.0%.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>Global equity (+5.1%) also delivered a respectable gain this quarter, but underperformed the South African equity. This was contrary to the broader outperformance of developed markets (+5.5%) over emerging markets (+2.8%) globally, all in rand terms. Global listed real estate (+6.0%) also participated in the rally, with growth assets in generally outperforming defensives, such as global bonds (-5.2%). The rand was largely steady, contributing less than a percent to offshore returns when translated into Rands. Over 12 months, global equity (+27.8%) and global property (+11.4%) have far outpaced global bonds (-15.8%). At an index level, global equity returns in Rands have not matched JSE returns over the past year, impacted significantly by the almost 20% strengthening of the rand. Despite this, given the rich opportunity set within global equity, we are pleased that our global equity managers managed to eke out outstanding absolute and relative performance, outperforming both the global and local equity markets this past year.</p><!-- /wp:paragraph --><!-- wp:heading {"level":3} --><h3><strong>How are the portfolios positioned?</strong></h3><!-- /wp:heading --><!-- wp:paragraph --><p>Global equity valuations are high, distorted by the US equity market which is now as expensive as it was at the peak of the Dotcom mania. This does not bode well for future returns, which are inversely correlated to starting valuations. What complicates matters however, is that if we look at valuations from the perspective of the equity risk premium (the difference between the earnings yield from equities and the long-term bond yield), then global equities are still quite cheap in relation to bonds, because bond yields are very depressed. Regardless of which way one prefers to look at valuations though, the fact is that valuations alone are a poor timing tool. For now, it matters more that the global economy is in an upswing, and that monetary policy is highly accommodative, because stocks usually tend to outperform under these conditions.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>As a result, we remain overweight global equities, having increased exposure last quarter to within the maximum band dictated by the various portfolios’ unique tactical asset allocation ranges. As always, we leave it to the managers we’ve selected to decide where to invest regionally, and to what extent they should be exposed to either growth or value opportunities. We have stayed neutral on South African equities, after having upweighted them last quarter. Although we are no less circumspect regarding the long-term prospects, the cyclical backdrop is positive given that our market is closely linked to the commodity cycle and that SA, as well as other emerging markets, have a larger valuation underpin than developed markets at present. There is therefore scope to tactically upweight SA equity should the opportunity arise.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>Outside of equity, the only other attractive opportunity we see is in South African bonds, which offer the prospect of strong returns going forward. These higher-than-normal returns reflect the higher embedded sovereign risk, which is born from our tenuous long-term debt sustainability position. We feel one is being adequately compensated for these risks, while the potential for a positive surprise exists, given the incremental improvements we are seeing, which might be underappreciated by the market. We therefore maintain our full weight in SA government bonds, which are significantly more attractive than SA cash. SA Listed property, given the sector’s downfall, is cheap and there are some opportunities within, but overall, it remains exposed to some of the weakest parts of the SA economy, which potentially still face the enduring effects of the post-pandemic world.&nbsp;&nbsp;</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>Looking ahead, we expect the investment environment to remain challenging. The economic rebound means that less global fiscal and monetary stimulus is potentially needed going forward but weaning off from the support will probably create some tension in the markets in the process. Although less stimulus being needed is a good thing in theory, in reality, asset prices have to some extent been supported by these ultra-accommodative conditions. The gradual transition to a less “managed” economy, and the risk of a policy error potentially leading to over-restrictive financial conditions, are therefore key issues to monitor over time. In the meantime, and as always, investors should maintain a diversified approach and position for a range of potential outcomes, bearing in mind that in order to reap the benefits of long-term investing, one needs to remain materially invested over time, rather than be underinvested for fear of near-term volatility.</p><!-- /wp:paragraph -->

<!-- wp:paragraph --><p><strong>By:</strong> <strong>Lulalend</strong></p><!-- /wp:paragraph --><!-- wp:paragraph --><p>Regardless of the size of your company or how great your product may be, at some point every business will need more finance than they have immediately available. When this happens, accessing additional funding will help to give your company the fuel it needs to grow.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>It may seem counterintuitive, but Trevor Gosling, Co-founder and CEO of&nbsp;Lulalend – financing partner to South Africa’s small- to medium-enterprises (SMEs) - explains that fast access to capital plays an important part of any business growth strategy.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>Gosling says that there is often a misconception that all debt is bad or that it is only used by struggling companies.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>“In fact, the opposite is often the reason why some of the world’s largest companies, including the likes of Apple and Coca-Cola, routinely seek capital infusions to keep profits within the company, maximize their tax savings, and assist with short-term financial obligations."</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>When raising funds, selecting the right type of business financing plays a very important role in determining how a business accesses capital and long-term profits.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>“For business owners, debt can also help to improve the bottom line of a company because it makes expansion possible, and can enable increased marketing efforts or the purchasing of new equipment and products,” he adds.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>Loans can also support seasonally driven companies that are often extremely profitable during peak season trading but need the extra cash to buy inventory and supplies during the quieter months. This is where debt can help to bridge the gap and balance out uneven cash flows throughout the year.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>Generally, the two most common ways in which this is done is through selling equity of the business or with debt financing.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>For many of South Africa’s burgeoning SMEs, what matters most is the overall cost of business funding and the speed at which it can be acquired. While both financing options can help to give access to capital, using debt to support growth rather than equity is generally preferred.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>“While you will owe interest on debt, unlike equity, the funding that it provides doesn’t mean you will have to lose a stake in your business. Any profits that are made after paying debt and interest will be yours to keep. It is also now possible to acquire a business loan in as little as 24 hours,” Gosling explains.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>Additionally, if you choose to take on a partner to increase capital, it will also mean that you lose full control of your business and be asked to share profits made going forward – which for many fast-growing start-ups is not always the most attractive option.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>While loans are a great tool to finance inventory or equipment purchases, an increasingly popular debt instrument is a business line of credit, or Credit Facility. Gosling says that a Credit Facility is one of the best ways to manage cash flow – especially if a business needs immediate access to funds to cover short-term expenses while waiting for customer payments.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>If you are responsible with your debt by making on-time payments, this can also help to improve a business’ creditworthiness. In turn, these smart credit habits can help to increase your overall spending limit, lower future costs, and help you to obtain better terms for future loans.&nbsp;</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>“The critical step that business owners need to consider before taking on any form of debt is to ensure that they have a plan on how to use any additional funding to generate a return and &nbsp;and improve profits,” Gosling explains.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>“If you don’t have a plan, or if you feel that you’re the company is struggling financially, taking on debt for the wrong reasons can cripple your business,” he adds.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>To assist businesses to recover and grow during these difficult times, Lulalend is offering it’s first time customers the opportunity to take out funding but only start repaying after 60 days, which gives them two months of cost-free capital.</p><!-- /wp:paragraph --><!-- wp:paragraph --><p>“It is not just about your bottom line. If done correctly, responsible debt can grow your company and give it the strategic advantage needed for a profitable future,” says Gosling.</p><!-- /wp:paragraph -->

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