Dear Readers,

One of the lifelong lessons of wealth management is the importance of confidence. If you think about it, the entire wealth management industry is based on confidence in countries, markets, companies and of course asset managers. So, in this letter, I thought it was an opportune time to talk about confidence. 

As I write, geostrategic concerns are rising in the Middle East and Russia’s invasion of Ukraine continues to challenge NATO and European politicians. Yet, despite the ongoing attrition and terrible human price being paid in Ukraine, financial markets have shrugged off the impact of the war, grain supplies have stabilised and energy prices have returned to the ‘norm’. This does not mean that the risk has been reduced, but rather that it is being contained, markets have adjusted and confidence is being restored. With respect to the current conflicts in the Middle East, the risk of contagion is high and any attack on oil facilities, or blockage of supply will see the oil price spike above $80/barrel and some forecast above $100/barrel. But again, even in this worst case scenario, crude oil production will be boosted by OPEC and non-OPEC members and in time the oil price will stabilise.  

Another area of uncertainty hinges on the outcome of the US elections on 5 November. Former President Trump and Democratic Party Vice President Kamala Harris have profoundly different political styles and philosophies, see the world quite differently and have sharply divergent views on the economy and the role of the US in the world. Yet despite America being faced with two Presidential candidates who could hardly be more different in their policies and promises, the US financial markets are confident and continue to forge ahead, with just weeks to go before the election. Despite some signs of slowing, economists have confidence that the US is heading for a soft landing and are encouraged that the Federal Reserve’s recent and forecast rate cuts will be enough to provide a needed fillip to the economy and boost job creation. 

In South Africa, the successful formation of the Government of National Unity (and its cohesion) has boosted confidence in the local economy, which has translated into a stronger local financial market, a strengthening of the Rand, greater foreign inflows and signs of domestic business recovery. The latest Ipsos poll shows that the percentage of the population optimistic about South Africa has doubled over the past six months. Of course, the absence of power cuts and a reduction in interest rates have added to this positive sentiment, but taken together, confidence is decidedly returning to South African markets. 

This is where confident asset managers come to the fore, identifying good quality companies, that are well managed, have a great track record, with exciting growth prospects and are trading at the right price. Warwick Wealth is in the enviable position of being able to provide clients with an extensive range of asset managers and funds within the ever-growing Orion Investment Managers’ offering. 

Never standing still and always seeking to enhance our service to our valued clients, and Professional Network Partners, Warwick will shortly be adding another asset management advisor to the OIM portfolio it utilises. This is a clear vote of confidence in the future of our markets and economy.

Before closing, I wanted to update you on the work of the Spirit Foundation and would encourage you to take a few minutes to look into the work of the Foundation (https://spiritf.org/), which is yet another clear commitment of my, Warwick’s and the Spirit Organisation’s confidence in the future of South Africa.

Until next month, enjoy the read and celebrate the many reasons to be confident!