For investment periods longer than 11 years, equity bottoms sit higher than cash bottoms, and for periods longer than 13 years, equity bottoms sit higher than bond bottoms.

Due to the high uncertainty of cash flows associated with investments in corporates, equities tend to be more volatile in the short term than cash or bonds. That said, equity can provide a better outcome over the long term than cash or bonds, We demonstrate this in the chart below. In the chart, a solid line shows the expected growth of R100 over time in an asset class. The dotted line shows the -3 standard deviations from the mean of each asset class; 99.87% of the return distribution sits above this line. An interesting finding here is that, for investment periods longer than 11 years, equity bottoms sit higher than cash bottoms, and for periods longer than 13 years, equity bottoms sit higher than bonds bottoms. You do not have to know the math behind this. The bottom line is the finding underscores the importance of long holding period when investing in equities.

Monthly financial markets outlook | March 2023

Download this edition Most major benchmarks trimmed their January gains in February as investors reassessed their expectations for interest rates and economic growth on the back of a string of reports that suggested stickier-thanexpected inflation in the US and a resilient global economy. The slower-thanexpected deceleration in US inflation and positive economic data in February […]

Monthly financial markets outlook | February 2023

Download this edition In this issue: Financial markets mount a solid comeback on hopes of peaking interest rates and inflation A soft landing still possible for the US economy in 2023 SA economy likely to tread water in 2023 China slowing down but remains a bright spot in 2023 US corporate earnings announcements We entered […]

Monthly financial markets outlook | December 2022

27four-I-am-a-corporate

Markets continued to be volatile in May with investors now more concerned about potential spill over of financial risks to the real economy. Grim earnings reports and guidance from some consumer-related companies in the US alongside a slump in business and consumer confidence raised recession and stagflation concerns. Locally, political risks were also elevated following corruption allegations levelled against the president. However, despite a negative backdrop, major asset classes closed almost unchanged in May, thanks to the relief rally towards the end of the month.

Monthly financial markets outlook | November 2022

27four Investments - Infrastructure

Markets continued to be volatile in May with investors now more concerned about potential spill over of financial risks to the real economy. Grim earnings reports and guidance from some consumer-related companies in the US alongside a slump in business and consumer confidence raised recession and stagflation concerns. Locally, political risks were also elevated following corruption allegations levelled against the president. However, despite a negative backdrop, major asset classes closed almost unchanged in May, thanks to the relief rally towards the end of the month.

Agrarius - Historical Pricing