Fake views

Some professionals write to stoke fear in the reader or advance their own agenda.
Read with caution. Picture: Shutterstock

I have been feeling angry about how the South African press is being used by media-savvy operators with suspect motives to play on fears. They are destroying a valuable part of our democracy to further their own, selfish agendas and South Africans will be worse off as a result. Sadly, the financial media is not immune from this infestation. Some in the investment industry are salespeople who have a clear agenda to stoke fear about the investment prospects of the country. Posing as experts, these operators offer hope in a carefully crafted message that aims to alleviate the fear. Most often the ‘hope’ is packaged in the form of products or services offered by these salespeople. Those who blindly follow these types of ‘opinions’ offered in the media are usually in for a rude financial shock later on in life.

The Sunday Times ‘rogue unit’ debacle has conclusively proved that we all need to be more critical when consuming media, including my own opinion. Sometimes writers will provide an honest opinion with no covert agenda, but their views will still be influenced by their subconscious bias. In other cases, the writer has a clear agenda to drive their own business interests by appealing to people’s fear or greed. This can be called financial pornography and should be viewed in the same way as other forms of pornography – ie. not a reflection of reality.

Offshore investments versus local investments

It is irresponsible to recommend that retired South Africans who plan to live in South Africa (and therefore spend in rands) invest all their money overseas.

South African investors should have a portion of their assets invested offshore. I believe the amount allocated offshore should be a function of the individual’s wealth, risk tolerance, spending objectives and views on the future of the country.

People who have retired with just enough money in SA would be well-advised to consider allocating approximately 25% offshore, while those with enough to leave money to their children could increase their allocation to 50%. The wealthy could increase their allocation to 75% offshore.

We need local assets to generate income to pay our local expenses, which cannot be exposed to currency volatility where an individual’s income could drop by 10% in a quarter if the rand strengthens. This is especially critical for those who have limited capital and therefore cannot simply draw more money should the rand strengthen.

It is important to realise that South Africa is not a basket case. This is not an irrational view based on false hope, but rather one based on facts. To quote Adrian Gore, group CEO of Discovery:

“The fact is South Africa, like the world, is a fundamentally better place as time progresses. Our GDP is 2.5 times the size it was in 1994 on a dollar basis; formal housing has increased by 131% from 1996 to 2016; new HIV infections have gone down 60% from 1999 to 2016; and the murder rate per 100 000 is down 50% from 1994 to 2017.”

Sadly, I have seen articles by salespeople saying South Africans are naïve if they choose to invest their assets in SA. Some of these salespeople work for international financial advisory firms that cannot offer South African products to South African residents. 

There are others, writing similar articles, focusing on the recent poor performance of the JSE to justify the view of investing offshore. For a moment, consider the logic behind this suggestion:  somebody is telling you to sell cheap assets (the JSE) so that you can convert your rands into dollars at a time when you will get very few dollars for your rands. They are then telling you to invest in international shares at a time when the US stock market is expensive.

The motives behind content that is designed to create fear about the future of the country and its investment prospects should be questioned. Some writers may own unit trust funds, and may hope that if they can instil enough fear, you might pick up the phone to discuss offshore investing (to resolve your fears) and end up investing in their offshore unit trusts.

Here are some of my beliefs:

I am a South Africa optimist. I believe that our civil society, independent judiciary, free press and independent Reserve Bank are key advantages. We can turn our economy around with the right leadership, and the early signs are already there.

The JSE is not a reflection of the SA economy. More than 50% of the JSE has almost nothing to do with the SA economy. For example, companies like Richemont, British American Tobacco, BHP and others earn very little from SA in comparison with their total earnings.

I don’t believe market history repeats itself automatically. Whatever happened in the last five years is very unlikely to be repeated in the next five years. This is not rocket science, it is basic behavioural economics, and people who say otherwise are either ignorant or pursuing an agenda at your expense.

I urge you to read all financial advice articles with a critical eye, including this one. Be especially careful of articles that aim to stoke fear or appeal to greed. This is an age-old propaganda tool used by the unscrupulous at the expense of the rest of us. 

Warren Ingram is a wealth manager at Galileo Capital.


The views and opinions shared in this article belong to their author, cannot be construed as financial advice, and do not necessarily mirror the views and opinions of Moneyweb.



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“Posing as experts, these operators offer hope in a carefully crafted message that aims to alleviate the fear.” Isn’t this exactly what Mr Ingram is doing? As they say, follow the money.

@Hun: You seem to have missed the main point of Ingram’s article which is as he writes: “I urge you to read all financial advice articles with a critical eye, including this one.”

@JustinB….ha….ever heard of reverse psychology ???

I once read a quote that says this “The stock market and the economy are two different things”

Great article – This should be put up weekly on moneyweb, as it couldn’t be any more prevalent.

Professionally written and not using fear mongering tactics.

Biases are everywhere on moneyweb!!!!!!

Yes, this article included.

Sounds like a swipe at Magnus et al…

FEAR!! PANIC!! – get out of the cesspit that is SA inc, he says…Yet the man lives here and makes his fortune here.

I agree with Warren, great article.

I will stick with Magnus….his advice has done many true

Besides, Warren Ingram is doing the same dance but naively believes that Zuma part2 will never be in production. If you are wealthy one can live anywhere happily. Most are not wealthy

Fortune??? Wrong!

What Warren omits is the math.

Historical average for JSE is 7.1% p.a. after inflation (real return)
Rand since 1970’s depreciates on average by 7 % p.a.

You would have made the same parking 100% cash in USD.
You would have made a fortune parking 100% in US equities.

Numbers don’t lie. Local investment returns have been laughable.

In the last 50 years, you could’ve been rand rich but you’re a broke joke in USD.

The only fake views here are those due to naive SA optimism based on absolute lack of research.

I am all for bashing local when justified, but where do you get your data from?

Last 30 years
– JSE All Share TR 8,101%
– MSCI World TR 6,334%
– USD (so basically USD cash) 647%

Data provided by ProfileData and FE

Like you say, numbers done lie.

“You would have made the same parking 100% cash in USD.”

No. Your quoted 7.1% JSE return is in real terms (over and above inflation), whereas your quoted 7% rand depreciation rate is in fact a nominal rate.

The real rate earned on USD cash would be closer to 0%. The JSE outperformed USD cash by a large margin.

With SA’s current situation and economy (bloated state, SOE debt, stagnant growth, unemployment, EWC etc) I’m not sure that looking into the JSE rear view mirror will help see the way forward.

Let’s use data source: see below, p36, ALL adjusted for inflation



Investment period: 1970-2018, 48 years
1970 ZAR/ USD rate $1:R1, 2018 ZAR/ USD rate $1:R15
Using 93 year averages as per article…
JSE 100% stocks return: 7.5% p.a.
100% US 10 year Bonds: 2.46% p.a.
100% Global stocks: 5.3% p.a.
Assume 1 USD which is = 1 Rand invested in 1970

In 2018 you would have made

JSE 100% stocks:
R1 x 1.075^48 = R32.18 Exchange back to USD and…
USD Value 2018 = $2.15

100% US 10 year Bonds: $1 x 1.0246^48 = $3.21
100% Global stocks: $1 x 1.053^48 = $11.92

In 48 years, Global stocks outperform JSE 550%, Low risk US bonds outperform JSE 150%. The numbers don’t lie.

Take off the rose tinted glasses and face the cold facts that at 80%+ portfolio should be offshore.

Please have a look at page 15 of your source:
Last 50 years
SA equity 17.1%
Global equity 16%
Global bonds 13.3%
Your math is off.


p 15 nominal returns, p 36 real returns (adjusted for inflation)

got to adjust for reality of price increases.

nominal or real returns regardless.. offshore outperforms hands down by a long shot when you take out rand depreciation (R1 = USD1 in 1970 and by 2018 your rand has become worthless).

OK I see where you get it wrong. You need to convert the nominal Rand returns for SA equities to $ returns (not the real return) and then subtract the US inflation to get the real $ return.

SAMAHE Sector Ave vs SO Global Allocatio Flexible Sector TR ave in ZAR : 3 year 7.88 vs 9.7%, 5 year 30% vs 56%…..Happy you don’t advise my family

Looking at 5 year numbers is pretty much meaningless.

10 years to end Sept:
SA multi-Asset High Equity (i.e. most balanced funds) = 9.11% p.a.
Global Multi-Asset Flexible (global balanced funds) = 9.88% p.a.
Worldwide Flexible (fund manager decides on/offshore) = 10.4% p.a.

15 years:
SA multi-Asset High Equity (i.e. most balanced funds) = 12.23% p.a.
Global Multi-Asset Flexible (global balanced funds) = 9.37% p.a.
Worldwide Flexible (fund manager decides on/offshore) = 12.49% p.a.

Not much in it if you want to look longer term.

This decision is not and should not be about “all or nothing”. Sensible considered wealth diversification on a risk-based basis, into a hard currency, well managed international portfolio via a regulated, established and independent asset manager that understands the local market makes eminent sense on a 3 – 5 year basis. Ask existing clients – they are the best recommendation. Our firm manages over $16.4bn of client money internationally.

Base any decision on the facts – and work through a quality, regulated and independent financial advisor.. who can select “best of breed” products with fully transparent pricing.

Just driven through the old industrial area in downtown Johannesburg. The state of the roads (95% of the metal safety barriers on the motorway have been stolen and lights are vandalized) and general decay is depressing. The businesses that are still there have security which rivals the American embassy. On the radio was the economic advisor to the President which was even more depressing. Anyone who thinks that the ANC will change course with respect to their centralist economic policies is mistaken. If you think that this will not have an effect on South African companies and their earnings you are mistaken.

Warren makes interesting and some valid points (take all points of view with a bucket-load of salt).

But Warren too,is making some very risky assumptions himself.

Ignore the lessons of history? Hmm…

What would Warren’s advice have been for those in Zimbabwe when everything still looked hunky-dory there ???

Don’t worry, just be optimistic, and everything will turn out OK? Hmm…

The nightmare in Zimbabwe didn’t happen overnight. Nor was it due to Mugabe. If it wasn’t him, there were plenty of other like-minded thinkers.

There were plenty of warning-signs. All the time. Just like in SA now.

Economists who think the spectre of Zimbabwe (and Africa in general) can just be ignored are making a huge and VERY risky assumption.

Economics is not driven by the law of physics. It is driven by the behavioral psychology of the underlying demographics.

And different demographics have DIFFERENT personal behaviours.

This is the primary reason why China is now ascendant and will soon be the world’s next super-power, and the USA is on a decline (Trump or not).

Ignore these underlying demographics, and especially the significantly changing trends within them, at your peril.

Problem is that there are no success stories in Africa. Except maybe Botswana. Only poverty and destruction. So Warren – history has repeated itself many times in Africa all for the worse. I also once was an an Optimist until Zuma took over.

Everything moves in cycles. agree. However, a country that considers EWC has serious risks to its currency and economy. Polls say EFF support has doubled. How long before the dam wall burst?

But how fantastically emotive are those articles? They create vigorous debate, follow up articles, emotive responses and of course as call to action to invest everything offshore – which just happens to be the service offered by said company.

Sorry Warren, in my mind the tiny snippets of fact you offer up as to why there is hope for SA are easily overwhelmed by the fundamental negatives. These are high debt levels all round, high state employment bill (not mentioning that many of those employed are corrupt or incompetent), falling GDP and per capita GDP, falling growth rate, increasing population, increasing unemployment, SOE’s (and municipalities) that are riddled with corruption and incompetence eating taxpayer cash with no end or action to stop this in sight, poor standards of policing, education, healthcare, ongoing and escalating racist threats to property and business. Shall I go on?

You claim “free” press; yeah right; IOL and SABC? Independent judiciary – you think,? To my mind even the ConCourt has a populist or ANC thumb on the scale, let alone the lower courts where obfuscation, incompetence and racism is pretty regular, hence long delays and packed prisons.

Sure, invest some high risk money in SA, maybe 5% to 10%, but surely stable first world countries offer stable returns, even if conservative? Maybe read your own article objectively and be even handed. Would Warren Buffet invest in SA; or has he?

I was a South Africa optimist up until the time of the 2007 Polokwane Conference. The hooligans took control of the ANC at that conference. It was a Coup d’Etat by the criminal faction of the ANC. Since then we have been subjected to grand scale looting. Can the civil society, free press, independent judiciary and independent Reserve Bank protect us from the voting majority? Our constitutional democracy bestows only rights and powers on the citizens, but does not demand any responsibilities or accountability. The voting majority has a false sense of entitlement and does not accept any responsibility for their actions. Our constitution was meant for sophisticated individuals. ANC supporters are the opposite.

People who do not have a sense of entitlement, and who do take responsibility for their personal situation, have to protect themselves from those who don’t. I love the country and its people, but I do not love it enough to walk with open eyes into a hyperinflation of the currency. Who appoints the Governor of the Reserve Bank? Who will be the next president, and who will he appoint as Governor? If the people can elect a Zuma, Magashule, Duarte and Gigaba who in turn can appoint a Motsoeneng or Moyane, what stop them from appointing a Moyane or Motsoeneng at Treasury?

@MagnusHeystek take note of the above. Thanking you in advance!


You mention offshore should be a function of the individual’s wealth, risk tolerance, spending objectives and views on the future of the country.

There are many offshore funds denominated in rands that are easy to liquidate.

So surely it should just be about attitude of diversification and rand volatility?

If your job, house etc comprises most of your SA risk assets, makes more sense that you put 75% of other cash offshore and diversify that risk. Why bet so big on SA (prone to high inflation and history of significant currency depreciation)?

“I am a South African optimist” what cave have you been living in the past few years? What has given you even a slight smell of optimism?

“Early signs are already there” those bat droppings must have made you blind!

Please also just have the guts to say Magnus Haysteck by name!

Warren Ingram is the mister nice guy, middle of the road don’t rock the boat type of adviser!

I am sure you would have given the Zimbabwean pensioner the same advice in 1995!

@Oldmanriver……well said !!

What a crock of tripe Mr Ingram has written

Its undeniably a paid piece of advertising for local fund managers to try keep some business in SA, as all the SMART money leaves in droves

As they say, an optimist is someone who doesnt have all the facts

Clearly, this applies to ‘dont rock the boat’ Ingram

Reading your financial advice article with a critical eye:

You make two good arguments. Using fear and recent performance to sell offshore investing is unnecessary.

I disagree with some of your other arguments:
1) The vast majority of South African investors have nowhere near 25% offshore – this is a concern;
2) Your argument that Rand-spending South Africans can’t expose themselves to currency volatility is flawed. If they can’t handle currency volatility, they can’t handle equity volatility either, which means that the JSE is out of play because it is subject to both (as you point out, half of JSE earnings are “offshore”). This logic implies that the ballpark 75%/50%/25% local investment scenarios you recommend should all be invested in local fixed income;
3) Hope (even reasonable hope) is not an investment strategy. Being an optimist is a terrible reason to negate prudent risk management. Being optimistic about South Africa is a good reason to invest here, but it is not a good enough reason to be overexposed to SA. The problem most South African investors face is one of overexposure rather than lack of local exposure;
4) The biggest problem with the limiting yourself to the JSE isn’t that it is South African, it is that it is a tiny subset of what’s available to investors around the world. Ignoring this because of currency volatility, when you are already bearing equity volatility and currency volatility through the JSE, is insane.

If one were to be truly impartial, the real question is why you would concentrate as much as 25% of your wealth in a market that comprises less than 1% of the investment market?

Furthermore, if Warren was not a South African with “skin in the game”, would he continue to put lipstick on the pig that is South Africa? Doubt it. I hardly hear him singing the praises of Chile or Argentina or Poland. It’s only those with a vested interest in South Africa who experience a chronic case of cognitive dissonance requiring them to back their jockey, even if the jockey is evidently obese and likely to break the horse’s back.

The country’s fundamentals are a disaster, obviously. Huge levels of state debt to GDP, anaemic growth, sky high levels of crime and unemployment, industrial-scale corruption, regulatory uncertainty and red tape, militant labour unions, stagnant property markets and of course the slow and steady depreciation of the rand.

ANC leadership has been an unmitigated disaster, however their most deplorable act is surely their failure to empower the nation through education…it has been so poorly managed, it’s borderline deliberate. Correction, it is probably entirely deliberate.

An entire generation of born-free’s have ZERO chance to compete in the modern, globalised, technological world due to our greatest national embarrassment, our education system. As a result, they will continue to vote for a party that professes to care for them most, but in reality enacts policies that hurt them the most. Inevitably, the socialist redistributionist rhetoric will continue and be ramped up as people with nothing to lose and everything to gain grow in size and in power (never mind population growth).

In summary, thanks Warren, but I’d rather have enough rands to pay the bills and invest the balance offshore. But thanks anyway for trying to counter the rampant afro-pessimism prevalent online (even if it is based in reason and evidence).

“why you would concentrate as much as 25% of your wealth in a market that comprises less than 1% of the investment market” – absolutely.

Often “offshore” is often spoken about in SA like it is one place whereas in fact it is basically the whole world.

No one not from and living in SA would ever invest more than a tiny fraction of their net worth in SA because there is no rational reason to. The same economic reasons should apply to anyone living in SA.

Firstly, GDP has increased since 1994 because a large portion of the population was now included in the economy where previously they were not. Not a case of growth by success, but growth by inclusion. The same goes for formal housing.

Secondly, I do not see the relevance of HIV stats in this article and offshore exposure. No correlation whatsoever.

Lastly, I highly doubt those stats are accurate, rather a result of gross incompetence or failure to report crime. Just because the reported crimes have decreased doesn’t mean it’s true. Our government is broken.

The issues we have in SA, from an investment point of view:

1. Increasing debt to GDP ratio
2. High unemployment levels that is increasing
3. Large number of corporates sitting on cash; i.e not reinvesting
4. Low business and consumer confidence
5. Blatant unchecked corruption
6. A skewed market being propped up by 4 shares
7. We are in a recession and layoffs are happening EVERYWHERE
8. Constantly increasing taxes and a diminishing tax base
9. An increasing current account deficit, in a time where exports should be at positive figures based on our current rand level
10. Property. Lets talk about that mmhm? Try and sell your property in today’s market.

“We can turn around our economy with the right leadership”

Yeah, and we can also ride our unicorns into the sunset because we will either have another 5 years of the same bunch of clowns, or worse, the EFF.

Warren i presume you are a young man who is voicing his wishes rather than logic. here is my logic
Since 1980 the Rand is now worth U$0,06 excluding inflation
Not ONE CBD in Africa has valuable glitzy real estate ala Europe and Usa,
it is all rundown and filthy.
Civilised people cannot step out of their home and go for a simple walk , unless one lives in a high security estate- it is life threatening.
Government health, Soe’s , education , police etc are all broken and bankrupt.
Ramaphoria might improve our situation in the short term but i believe in the long term it will be same old ,same old

Thanks Warren, your write-up made my day. Sure, there are problems within the economy, the government, SOE’s etc. we all realize and see that. There are also many good people out there fighting and struggling to repair what is broken, good sensible people, of all races; they have the objective to make South Africa a better, safer, cleaner, live in peace and prosperity place for all. You find these people everywhere, in different political parties, within the SOE’s, within government departments, NGO’s, etc. Many South Africans are tired of political shysters and self-serving government employees, this is clearly visible and audible. I think the tide has turned and the rats are going to start leaving the ship by themselves or they will be thrown overboard. Let us make sure we participate in the struggle for improvement to move South Africa away from a path of destruction. There is no reason to follow what other African countries (or other European/Asian countries etc.)have done. One can invest where ever, but learn from history that most of these foreign countries have their own miseries and some have really terrible histories, even worse than our own if that is possible. We create our own future, and if we fail, it is because we did not work hard enough with our fellow citizens to make this country great. So, instead of griping about the economy and politics, lets rather get out there and do something positive. Negativity is never a positive thing, and what we need are positive hard working and responsible citizens. This country can be a great place, a great place for everyone, but it depends on us, not on the foreign markets.

Completely agree with Ludwig Combrinck above!! I have been a keen reader of the Moneyweb articles for several years and what is obvious to me is that it is the same readers which are usually complaining about the country they live and generate their income in. The opposing pole appears to be a silent grouping not putting forward their opinions for whatever reason!! Do not fall in the trap of thinking those who obsessively criticise everything South African is the majority…it is the same few voices over and over and over….
Common sense is not such a common flower in everybody’s garden…use your common sense and, inform yourself over a wide spectrum of opinions and then make up your mind which opinion/s to follow.

End of comments.



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