by Saleem Sonday, head of group savings and investments at Allan Gray.
It’s hard to make space for saving in our already-stretched budgets, but what about those of us who have children aspiring to spread their wings by studying abroad?
If sending your children overseas is a consideration, it is a good idea to invest at least a portion of your portfolio offshore. Costs are likely to be more satisfactory if you are saving and spending in the same currency.
A better strategy is to figure out how much of your investment portfolio you want to place offshore, and what you are trying to achieve, and then formulate a plan to invest as regularly as possible in carefully selected assets. It is equally important to spend your time identifying which global assets you want to invest in for the long term, rather than determining the exact perfect entry point – which, as we know, is impossible to do reliably. Over the long term, having exposure to exciting industries and opportunities outside of South Africa allows you as an investor to participate in the growth of these companies and ultimately add value to your investments.
Remember these four things, which will improve your chances of success:
Make sure your portfolio is well diversified.
Adopt a regular approach to investing offshore, rather than making one-off investment decisions or trying to time the rand and take a long-term view.
If you partner with an offshore manager, check that they have an investment philosophy that you believe is sustainable and that they have proven they can implement.
Seek advice from a reputable financial adviser to help you navigate the greater complexity that inevitably arises from the huge number of funds available globally. It can otherwise be overwhelming.
**The views and opinions expressed in this article are those of the author.