30 June 2024

Introducing “The Inside Track” – your monthly guide to financial planning insights, market trends, and global financial perspectives.

I created the name ‘The Inside Track’ to symbolize a clear and efficient path to financial success, much like the inside lane of a track represents the shortest route to the finish line. In this context, it signifies a streamlined path to financial peace of mind.

The mailer will evolve over time, aiming to provide you with valuable insights into market trends and their impact on investments, both locally and globally. Additionally, I’ll share concise and engaging snippets of information to keep you informed and hopefully inspired.

The month of June was a pivotal time for South African investors as we all awaited the election results, which promised to shape new political and economic policies.

In a nutshell, the coalition’s announcement of the new cabinet looks promising, and I think most would agree we are in a better position now than we were a month ago. Business-friendly policies and a market-driven economy should attract much-needed foreign investment to kick-start an economy that has seen an average growth rate of only 1% over the last five years.

Overall, the rand, as well as South African stocks and bonds, have benefited from the vote.

All else being equal, foreign investment typically leads to an appreciation of the Rand, lower inflation, reduced interest rates, increased retail spending, higher volumes of bank transactions, fewer bad debts, and more jobs.

The antithesis would mean a continued flight of capital, non-market inefficiencies, and a higher debt-to-GDP ratio.

Whether long terms consensus or disagreement emerges, only time will tell. For the sake of South Africa’s future, we hope the former scenario prevails and not the latter.

Market indicators

Returns % (to 21 June 2024)

Global Market News

• A group led by Wall Street giants BlackRock and Citadel Securities plans to launch the Texas Stock Exchange in Texas, challenging what they view as excessive regulation at the NYSE and Nasdaq. With around $120 million raised from individuals and major investment firms, the exchange aims to file SEC registration documents this year and start trading in 2025, with its inaugural listing expected in 2026.
• The Bank of England held off on rate cuts despite easing inflation.
• German government bond yields fell after economic survey data for the euro zone came in weaker than expected, supporting expectations for policy rate cuts.
• Japan’s core inflation accelerated in May due to energy levies but an index that strips away the effect of fuel slowed for the ninth straight month, data showed on Friday, complicating the central bank’s decision on how soon to raise interest rates.
• Prices of new homes in China suffered their biggest fall in nearly a decade last month, in a sign that Beijing’s “historic” real estate rescue has not yet revived demand.

South Africa

• According to Bank of America (BofA) economist Tatonga Rusike it is unlikely the the SA repo rate will thus remain unchanged from its 15-year high of 8.25% in 2024, Its anticipated that SA will follow the US which at this stage is leaning towards a possible rate cut in December 2024. Favorable data may expedite this move.
• Solar Africa Energy has broken ground on a R5-billion development that will form phase one of a utility-scale solar project in the Northern Cape, Once complete, the solar farm will be the largest in South Africa generating 1000 MW.
• This year, South Africa is set to become the tenth-largest solar market in the world.
• Takealot.com has reported a profit for the first time ever in 2024.
• The latest Bank of America Fund Manager survey shows that 59% of managers are bullish on equities despite questions about the GNU’s cabinet

Food for Thought

• Elon Musk confirmed on the 14th of June that Tesla could start selling its humaniod Optimus robot by the end of next year and predicted it could drive the carmaker to $25 trillion valuation, another ambitious claim from the billionaire that experts said might just be within the realm of possibility.

Quote for July

“If you don’t find a way to make money while you sleep, you will work until you die.”

Warren Buffet

The moral of this quote is: Spend less than you earn, consistently invest the balance, and one day, you’ll have more time to do the things you love. If you keep buying things you don’t need, one day you may have to sell the things you do need.

Chart of the Month

The S&P 500 Index rose an impressive 10.6% in the first quarter adding to the 11.7% gain in the fourth quarter. The recent rally in stocks has seen the S&P 500 reach several new highs during the quarter. It has been over a decade since the S&P 500 last recorded back-to-back gains over 10%. This has happened seven times since 1950 and none of the previous occurrences led to any significant weakness in stocks.

Wrap – Up: Tip for Your Financial Wellbeing

Financial fraud is on the increase and the scammers are getting smarter.

Your hard-earned money deserves protection. Always question and thoroughly research any investment opportunity. Here’s a checklist that could safeguard your financial future.

1. Investment Caution: Avoid investments where returns depend on recruiting new investors, resembling pyramid schemes.
2. Complex Tiered Products: Exercise caution with investments featuring multiple tiers (e.g., bronze, silver) or unclear investor classifications.
3. Opaque Returns: Approach investments with unclear return mechanisms or lacking transparent underlying assets with skepticism.
4. Urgent Opportunities: Be wary of investments marketed as urgent or “once-in-a-lifetime” opportunities, as these can indicate high-risk situations.
5. Track Record Verification: Prioritize financial providers with established track records; be wary of unproven claims of high returns.
6. Legitimacy Checks: Verify investment legitimacy independently; ensure registration with reputable financial bodies like the FSCA.
7. Transparency in Investments: Legitimate investments should provide clear information about underlying funds or assets upon request.
8. Trust Your Instincts: If an investment appears too good to be true, trust your instincts and conduct thorough research before proceeding.

NB: Legitimate investments cannot make guarantees about returns.

I hope this mailer has been valuable to you. As always, I am readily available to answer any questions and assist where possible.

Reference: Morningstar, Forbes, NinetyOne, Allan Gray. Copyright (C) 2025 Stocks+Wealth Financial Planning. All rights reserved. You are receiving this email because you are an existing client or agreed to receive information from Robert Taylor. Our mailing address is: Stocks+Wealth Financial Planning, 16 Virginia Ave, Vredehoek, Cape Town,Western Cape, 8001, South Africa The information contained in this message is intended only for the recipient and may be a confidential client communication or may otherwise be privileged and confidential and protected from disclosure. If the reader of this message is not the intended recipient, or an employee or agent responsible for delivering this message to the intended recipient, please be aware that any dissemination or copying of this communication is strictly prohibited. If you have received this communication in error, please immediately notify us by replying to the message and deleting it from your computer. Please also be aware that the contents of this email include the opinions of the sender Robert Taylor and are not to be construed as advice or acted or before consulting with Robert Taylor or any other licensed Financial Services Provider where professional process and the FAIS act and General Code of Conduct are applied.