Final Thoughts after a great 2025

Final Thoughts

Over the past few years, in my last regular Friday email for the year, I have shared that after 12 years as a financial planner, "I'm still looking for my first ‘normal’ year (saying that it certainly wasn't it then).  Well, rather clearly, this year, yet again, certainly wasn’t it! 

Investment markets and the Rand currency

This year, yet again, we were all excited at the good start. Yet, things began to feel like they were falling apart by the 2^nd quarter on the Trump liberation day in early April, on the back of higher US Tariffs, only for investment markets to subsequently look through this, to end the year fairly strongly.   

For both SA and globally, inflation is much lower than a year ago, where we are in a global interest rate-cutting cycle domestically and abroad. Fuel prices are much lower than a year ago, while the Rand is roughly 11% stronger this year-to-date against the US dollar, and investment markets have been pleasing overall with a strong push in the 2^nd half of this year.      

Investment markets have been good for local investors, with the offshore MSCI All Country World Index (world stock markets as a whole) by the end of last week having gained 14,84% over the last year, albeit the Rand strength naturally detracts from a SA investor perspective. 

In turn, the local SA All-bond Index to the end of last week has increased by 22,46% for this year-to-date, on the back of lower inflation and interest rates, improved credit ratings, grey listing removal, higher-than-expected tax collections, and improved sentiment by foreigners seeing them pile new record foreign inflows into our local bond market.       

At the same time, local share markets have had a great year, and accompanied by the stronger Rand, by the end of last week the MSCI South Africa Index (SA share index as stated in US dollars) as measured on international markets, is now up a solid 62,79% not annualised this year-to-date in USD terms, and 48,62% over the last year. 

The trajectory is positive 

There is still a lot that can go wrong, but the biggest risks seem to be external, rather than domestic, for once. If these risks don’t materialise, South Africa can continue to turn the vicious cycles of the past 15 years into virtuous ones. We are not saying we are without problems, but more that the change in trajectory is positive. 

Loadshedding largely behind us, our rugby and test cricket teams will end the year as the respective number one-ranked sides, and in a lighter non-factual vein, “I will stick to my story to at least give some credit for the stronger Rand to our Boks”. 

This all while our GNU has remained intact, at least for now.    

SA Tourism is due for the best-ever festive season 

Looking at the tourism sector, this festive season, we can already see that Cape Town and SA will see the most tourists ever, even surpassing last year’s bumper season. Based on demand, flights to and from SA are right now exceptionally expensive, and even a can of Coke from the Clifton beach vendor is now R80 a can (and it’s not even the peak holiday period yet!). 

This is expected to boost the local economy further in the short term.     

Looking at financial planning aspects not mentioned in investment statements 

Our clients' portfolios are well-invested and positioned with the necessary diversification. As a result, I sleep well at night.  

I remain mindful that financial planning ensures that your finances look after you no matter what markets do. Our financial planning process remains only a conduit to living and optimising your ambitions, where you want to add significance to those closest to you.     

Within this framework of considering matters otherwise not stated in investment statements, my ongoing concerns include longevity - where we believe the babies born today can live through to age 150. With increased medical costs after years of providers cutting back on benefits, there is little protection against future annual premium increases of 4-5% per annum over and above inflation, which is unsustainable in the law of numbers. 

Lately, it’s also been very noticeable for me where I have seen several clients who either live abroad, or partly abroad, when returning to SA to visit loved ones back at home – now also using the opportunity to do their medical and dentistry work while they are here, given how expensive this is overseas.  

Therefore, healthcare is not exclusively an SA-only issue, but rather a global one, and in fact, some years back, in 2016 was the biggest single political election campaign issue between Obama and Trump on the US election, then, in terms of Obamacare.

Our own Treasury team again only just last month confirmed that there is no financial appetite for the NHI until at least 2029, and they appear to have the same thinking as we do: that this requires long-term, sustainable, financially sound solutions.  

At the same time, education costs, including schooling and tertiary expenses, are also climbing far more than official inflation. 

We are mindful that these global concerns are not restricted to only SA, and are more financial problems than political ones, requiring financial solutions.   

Looking globally, AI is ever improving, and besides the relevant investment cases, I, for one, believe that AI has many purposes and could be a game changer for preventing and detecting crime in SA.  

As the year draws to a close, I want to thank you for your valued support and wish you a wonderful festive season in making lasting memories with your loved ones.

Year-End Tax Considerations for Investors

Effective tax planning remains a key component of strategic wealth management. The most successful investors understand that minimising tax exposure isn’t about avoidance, it’s about foresight, timing, and structure.

Before 2026 begins, take a moment to review:

💼 1. Investment structures: ensure your holdings are positioned for optimal tax efficiency.
📊 2. Retirement contributions: confirm you’re maximising allowable deductions ahead of the new tax year.
💡 3. Capital gains timing: strategic realisation can make a significant difference to your overall returns.

Thoughtful planning today can preserve more of what you’ve earned for tomorrow.

Personal News from Jurie

On a personal note, I'll be taking some time off to spend with the family in Langebaan and to Camp in Worcester, returning refreshed and invigorated on the 12th of January.

FRIDAY FUN