Real Estate Investor Magazine South Africa November 2015 | Page 61

opportunities is often a topic of conversation at dinner
parties across the country. While offshore investing
is currently in vogue, it is essential that investors
are cautious. You need to ensure that your venture
would be seen as a sound investment by a citizen of
the country in which you are investing. You should
also make sure that your offshore partners have your
interests at heart. If possible, work through a local
financial/professional services company that has a
presence offshore, knowledge in the market where you
are investing as well as a track record in dealing with
South African investors.
Will the Rand continue to weaken?
According to many economists, the Rand is heavily
undervalued. Some feel it should be trading at around
R10/$ (it is R13.7645 as I write). To an extent, I
agree; especially if you look at the buying power on
identical products in SA and the UK. However, this
does not mean that we should expect any short term
strengthening in the Rand.
There is so much “bad news” or risk priced into the
Rand, which makes this a great time to either buy
Rands or invest in SA. This weakness could continue
for years so any inward investment should be done
with a long term view. The talk of interest rate rises in
the US as well as the commodity crisis will keep the
Rand under pressure. Investors can take solace in the
www.reimag.co.za

fact that these factors will not always be present. A far
more concerning issue is the ANC’s mismanagement
of the economy. Massive salary increases to all civil
servants will hurt our economy at a time when the
unemployment rate is at a historical high.

Now, more than ever,
South Africans need to
understand the principles of
risk diversification in order to
ensure that wealth preservation
does not become impossible.
Compared to the other commodity and emerging
market currencies, the Rand has been the worst
performer over the past 10 years. More now than ever I
am asked where the Rand is heading, when a far more
important question for any investor should be: “How
does offshore property fit into my investment strategy?”

RESOURCES
Sable Group
NOVEMBER 2015 SA Real Estate Investor

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