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SA’s Prospects for 2012

What Are The Prospects For SA’s Economy in 2012?

South Africa’s money matters are intertwined with the rest of the world, which is presently under pressure. If others stumble, so will we.
America does not seem to be making much economic progress, and Europe isn’t making progress in solving its crisis. The Middle East and North Africa still remain unstable, too.
The oil price still remains at $100 a barrel.
Inflation:
• The inflation rate is set to exceed 6% by the end of 2011and should remain there for the first part of 2012, but will gradually drop towards the end of the year.
• It seems that an average rate of 5.6% inflation rate is expected in 2012, compared to that of 2011 which stood at 5%.
• Increases in municipal bills could add pressure on the individual pocket.

Interest Rates:
• Interest rates have dropped 6,5% over the past 5 years.
• This makes debt less stressful.
• The prime lending rate is 9% and has said to remain stable this year, and could be the trend right into 2013.
• If interest rates do change, they are more than likely going to drop and not rise.
• This does not bode well for pensioners that are living on interest.

Our Rand:
• The longer the situation is drawn out in Europe, the longer the rand will remain weak.
• This does not bode well for people travelling abroad and also for those that import.

Live within your means and avoid unnecessary debt and continue to save as best you can.

Beware Foreign Lottos

Many Have Been Alerted To The ‘Millions’ We Have Won

• Scammers are really smart, and a day seldom goes by without a notification from some amazing international lotto that an individual has won.
• Be alert at all times and beware of all the fake lotteries that are out there, ready to ensnare the unsuspecting.
• You will be either informed by SMS or email; and we are not talking about rands, these are fake lotteries where you stand to win millions in euros, dollars and pounds.
• Many individuals fall into this type of trap, and are then persuaded to part with thousands of rands and they never win a dime.
• A typical example is after you have been informed of your windfall, you are told you first have to pay taxes to release your money or you have to pay an administration fee.
• Another typical scam is all the fake “prizes” that you have apparently “won”.
• It is quite simple, really, no lotto ticket, and no win. It is that obvious.
• No lottery has every picked random email addresses or telephone numbers and rewarded individuals that have not even paid for a lotto ticket; it makes perfectly reasonable and good sense.
• If you ARE lucky enough to win a prize or something you are not aware of, you can always find out more, especially if the company is a well-known one, by visiting the website, and then calling the head-office to verify the win.
• Never open any links from banks; these are phishing expeditions.

Your bank will never request your personal information on email or sms, for personal information.

Ten Pointers to Illustrate Investment and Risk

Investment Strategies To See You Through
• When it comes to investing, entrepreneurs have a tendency to be protective of their hard-earned money.
• Unsurprisingly, even the bravest investors started selling off their shares in 2008 when the Dow Jones plummeted to an all-time low.
• You need to establish an investment strategy that will see you through good and bad times.
• Assess your personal tolerance for investment risk.
• Your personal circumstances will give a very different sense of risks you are willing to take in building the private equity of your business versus those you are willing to take with liquid investments of which you have little or no control.
• Your tolerance for investment risk can fluctuate based on how much financial security you have already created for yourself.
• Consult with an investment advisor about long and short-term investments before making any decisions.
• Create a plan that will provide you with potential for capital appreciation and income generation, but one that will also give you peace of mind.
• Always match your investment to your investment personality.
• No investment is 100% safe.

Investors who panic when the market collapses and hope to get on the bandwagon when markets improve usually risk losing their original investment.

Contract for Difference Investments

A New Form of Investment; Contract for Difference Investments
There is a new form of investment that is gaining popularity which appeals to the up-market private investor; an investor who is looking for flexibility and a need to make the most of assets.
The investment is called Contract for Difference Investments. CFD’s are agreements to exchange the difference of a financial tool between the time at which the contract is opened and the time the contract is closed.

Unique features that make them attractive to retail investors and institutions are the fact that they are transparent and their pricing.

What, then, are CFD’s and how do they work?
• FD’s were originally utilised by investors of institutions to hedge their exposure to stocks.
• They are gaining popularity among retail investors.
• They have a couple of unique features that make them particularly attractive to investors; these are transparency and pricing.
• Only an initial deposit is required when trading a CFD.
• The initial deposit amount depends on how volatile the market it.
• They provide a lucrative way in to the equity market.
• The product is therefore leveraged and the investor needs to be attentive to risks.

The lucidity of CFD’s is attractive; what you see is what you get. You pay commission on your trade and any interest costs are subtracted and charged separately and calculated immediately so that you are aware of the monies involved right from the outset.
When trading CFD’s it is important for investors to research the company that they decide to trade with, and consider the technology offered by the company you select.