The rand could fall to R19/$

[bchip]

Why anyone would want to convert ZAR to Dollars or Sterling now is beyond me. You have missed the boat as they are both at all time highs and would probably correct again or at least stagnate for some time.
Should they stagnate, you would miss out on superior growth of the emerging markets compared to developed markets.
Should the currencies correct, you will have a double whammy and end up as losers.

Sure it looks good on a very simple chart. The ZAR depreciates on average 2,5% pa against the USD--Bloomberg.
Over a 3 year period, the JSE IND25 index has grown by 90% compared to US and UK indices with ave 40%. That 2,5% will have no effect at all.

12 Aug 2015
Then R/$ = 12.75,
Today R/$ = 16.55
30% growth

I see many posters here recommend cash in fixed deposit, money market stuff. Those are purely for emergency funds and not for gains in capital. The OP wants Returns on his investment. A gain of 8% pa is a joke.

Hardly any Fund Managers are able to beat the STXIND ETF due to restrictions placed by the FSB so why not invest directly into it yourself?

You can do this via the TFSA without triggering a tax event when you sell. STXIND has done superbly well at +- 30% pa over many years and as industries are the "life blood" of our economy. it must continue.

Why invest in cash with a possibility of 8% pa gains where as the STXIND would give you a possible 35% pa or more? The fees are substantially lower than Unit Trusts in case you were thinking of UT's.

Also bear in mind the withholding tax on interest with cash whereas the Tax Free Savings Account will be free of tax even within the 3 year holding period required for capital gains to apply.

05 Aug 2015 (5 months later)
Satrix Indi
Then 68.53
Today 67.99
Return -1%

Bonds in the same time 5%
Cash 2%

Why would you want to invest offshore? Emerging markets have proven to outperform the US and EU markets and even Japan and China.

SA in R terms, returns so far -9%

SA in $ terms, returns so far
https://twitter.com/mySharesCoZa/status/652189112552792068

The ZAR is not falling as much as you think. It is the USD that is gaining due to the interest rate hike.
You can only access the decline of the ZAR if you compare it to a basket of main currencies. The Euro has also declined against the USD.
Emerging markets are being sold off but this will end and money will soon start flowing back here.
The ZAR is far oversold being the most traded exotic currency in the world and the Zumafication of the ZAR is correcting back down as we speak.

The USD Basket moved from 97.20 to 99.20 (2%)
the USD ZAR lost 29%
----------------

Does anyone ever keep track of the comments being posted on these forums?

 

[Oopsie]

Some of those posts are so old. The whole scenario has since made a drastic change and I had to adjust my portfolio since. China's meltdown was not even a thought then and nor was the price of oil.
http://www.moneyweb.co.za/moneyweb-opinion/the-rand-conundrum/

 

[bchip]

Some of those posts are so old. The whole scenario has since made a drastic change and I had to adjust my portfolio since. China's meltdown was not even a thought then and nor was the price of oil.
http://www.moneyweb.co.za/moneyweb-opinion/the-rand-conundrum/

Oil crashed since 2014? How is that new?
China has been pumping stimulus since 2013 because of weak conditions...again how is that new?

The last comment was posted yesterday.

And finally you kept punting the Indi does 30% per annum...so it wasnt a day to day view.

 

[Oopsie]

What a load of bollocks. China's market downturn started in May 2015.
Nobody expected the oil price to reach $30.
For your information, markets go up and down and I stick to my statement that the STXIND does average 30% pa. We are in a perhaps short term bear market and you cannot take a 1 year view. The 5 year average still has it as 32% with no divies reinvested.
Look at the charts. I cannot post them here for you.

 

[reactor_sa]

Wow, and you have to be an economist to guess this ****?? Damn, I'm in the wrong job.

 

[Oopsie]

Wow, and you have to be an economist to guess this ****?? Damn, I'm in the wrong job.

Not really. A mere 2% of fund managers can beat their indexes over a 5 year period. This has been stated many times in financial media.
So why pay management fees when you can invest in the index itself and beat those managers plus the fees are so much lower.
No one can predict what will happen in the future.

 

[Oopsie]

As I was saying. No one can predict the future. ZAR is strengthening. Dr Copper and commodities as well. Emerging markets seem to be back in favour.
Look at the price of oil and how it rebounded.
Good news from Draghi.
Now I am glad I did not panic and run to USD. Will this last? We don't know.

Just checked. Oil price still going up since Saudi said the price was "ridiculous". Up from $27+ to $32 now.
SA stocks and the ZAR will follow suite.

 

[HavocXphere]

As I was saying. No one can predict the future. ZAR is strengthening. Dr Copper and commodities as well. Emerging markets seem to be back in favour.
Look at the price of oil and how it rebounded.
Good news from Draghi.
Now I am glad I did not panic and run to USD. Will this last? We don't know.

Just checked. Oil price still going up since Saudi said the price was "ridiculous". Up from $27+ to $32 now.
SA stocks and the ZAR will follow suite.

This would be a whole lot more credible if your fate wasn't tied to the ZAR/EUR holding....

 

[Oopsie]

This would be a whole lot more credible if your fate wasn't tied to the ZAR/EUR holding....

You need not believe me at all. Have a look at the charts. They do not lie. I am still much better off here than I would be if I stayed in Cape Town even though I earn rands.

1 kg pork (fat removed) = R25.00
1 kg chicken (whole) = R16.00
1 kg potatoes = R9.50
1 lt Coke = R9.00
Sit down Fish, chips and salad = R 40.00

Water, electricity and gas (includes TV licence fee) = R300.00
Uncapped unlimited 40 mbps WiFi = R230.00

 

[HavocXphere]

Damn...did that stuff fall off the back of a truck?

 

[JayM]

You need not believe me at all. Have a look at the charts. They do not lie. I am still much better off here than I would be if I stayed in Cape Town even though I earn rands.

1 kg pork (fat removed) = R25.00
1 kg chicken (whole) = R16.00
1 kg potatoes = R9.50
1 lt Coke = R9.00
Sit down Fish, chips and salad = R 40.00

Water, electricity and gas (includes TV licence fee) = R300.00
Uncapped unlimited 40 mbps WiFi = R230.00

I call bullsh*t.

 

[Biostar]

What a load of bollocks. China's market downturn started in May 2015.
Nobody expected the oil price to reach $30.
For your information, markets go up and down and I stick to my statement that the STXIND does average 30% pa. We are in a perhaps short term bear market and you cannot take a 1 year view. The 5 year average still has it as 32% with no divies reinvested.
Look at the charts. I cannot post them here for you.

Agreed...STXIND should be your core holding. Buy on dips and you will be rewarded. The DBX's and SA ETF's have an inverse relationship...when one is high, you buy the other...thats the way I do it.

 

[SZN]

I call bullsh*t.

He lives in Portugal.

Don't see why he would lie.

 

[Oopsie]

He lives in Portugal.

Don't see why he would lie.

The prices I quoted I had to edit lower later after I returned from the supermarket. Plus I have not deducted the 10% discount I get with my club card.

 

[gimpex]

You need not believe me at all. Have a look at the charts. They do not lie. I am still much better off here than I would be if I stayed in Cape Town even though I earn rands.

1 kg pork (fat removed) = R25.00
1 kg chicken (whole) = R16.00
1 kg potatoes = R9.50
1 lt Coke = R9.00
Sit down Fish, chips and salad = R 40.00

Water, electricity and gas (includes TV licence fee) = R300.00
Uncapped unlimited 40 mbps WiFi = R230.00

1 euro for a kg of chicken ?
50 euro cents for a kg of potatoes ?
Unless things get drastically more expensive by the time it reaches Austria , hmmmmmm

 

[Oopsie]

Correct. It is 99 cents Euro per kg of whole chicken. Chicken leg quarters are 1,25 Euro per kg. Fresh and not frozen.
I over estimated the price of potatoes. It is not 50 euro cents per kg but 39 euro cents per kg. Washed and chip variety. Essentials such as beer and wine is half the price of what I paid in SA. It is cheaper to drink beer and wine here than sodas as nobody drinks fizzy stuff here. Very health conscious and hardly any overweight people.
I can provide links if you do not believe me.

 

[DrJohnZoidberg]

So, anyone want to predict what the performance will be like for the USD going into the weekend?

The Rand strengthened a bit this morning but it's already started losing ground again. According to a news24 article:

The South African trade number, out today, is also expected to impact the rand.

"Should the number come in as a trade surplus, expect the rand to continue its downward momentum."

Cilliers said a potential banana peel could be the release of the US GDP number later on Friday afternoon.

"Should the number come out better than the anticipated 0.8%, we could see a rally in the US dollar and rand weakening as we head into the weekend.

Thoughts?

 

[MrGray]

Rand improvement is likely just a knee-jerk reaction by markets - nothing has really changed in the fundamentals. The mining industry is in a state of collapse, we have an impending food shortage due to drought, the cabinet remains rudderless on economic policy, labour and the regulatory environment are unfriendly to investment/growth and politicians continue to spew damaging rhetoric. I can't see how there is any possibility of a long term up trend in the Rand, unless there is radical change.

 

[bchip]

Rand improvement is likely just a knee-jerk reaction by markets - nothing has really changed in the fundamentals.

I disagree, big trend changes in the past 3 weeks.
Could be wrong, but Im bullish on the rand since we spike to 18 and
since interest rates got hiked it confirmed the bullish view further.

Problem is, they tried to lure foreign investors by increasing the rates, but, due to possible junk status, these people are busy withdrawing. You can see this in the JSE figures.

How can you tell that it went back to the foreign country and not into SA bonds?
Were not junk status yet

 

[Jehosefat]

How can you tell that it went back to the foreign country and not into SA bonds?

Exchange control declarations.