By Christo Luüs, Chairman, SAIFM
Because the workings of markets are often seen as complex and inherently unstable, they can sometimes be described as chaotic. This characteristic renders markets susceptible to continuous and unpredictable change. Simba Manwere argues that technical analysis in fact provides some explanation of seemingly random price behaviour by capturing human behaviour and emotions in charts.
The article on the unique behaviour and characteristics of the so-called millennial generation and how understanding this generational group may be utilised to the advantage of financial services companies, also capitalises on the relationship between psychology and finance.
The rise of private banking in Africa which stems from the need of wealthy African individuals to differentiate themselves and proclaim their new found status, is explained. The growth and opportunities in this market are described while possible constraints in the form of global regulations on taxation and transparency are noted.
Still on the African continent, the JSE has launched a new range of African currency futures which track the exchange rate between the Rand and the Zambian Kwacha, Kenyan Shilling and Nigerian Naira.
The meaning of risk is explored and the conclusion reached that volatility is not necessarily a useful proxy of risk for individuals. It is recommended that wealth managers ensure that all three aspects of risk – attitude, need and capacity – are taken into account when tailoring appropriate portfolios.
The contribution that the dividend yield makes to total investment return is analysed. It is argued that high dividend-paying companies, which possess the characteristics required to weather uncertain economic times, could be an attractive alternative for generating income.