'We know things have been rough - but nobody make any sudden movements'. That was essentially the message of both Discovery Invest and Investec Asset Management at this morning's Discovery Invest Insights panel at Summer Place in Johannesburg.
When CEO of Discovery Invest Kenny Rabson opened the day's proceedings, he referred to the 2016-March 2017 ASISA statistics: "the household savings rate is now the lowest it has been since 1972 as a percentage of GDP and, what's more, the movement of people to investing in money market funds and interest bearing investment means that people are panicking, they're nervouse - but you need to stick with your long term plan," said Kenny.
After him, Steve Watson of Investec Asset Management - who look after the Discovery Balanced Fund - took to the stage with very much the same message. "The last three years have been painful - we as investment managers and you as adivsors need to ackknowledge that it hasn't been great. SA equities - supposedly the engine of growth - have come in lowest of all, giving us just 1.7% in the last year. But you should not change your asset allocation - history shows this."
'Don't panic' was so much a theme for the day, that I almost expected to hear 'always bring a towel' and other Hitchiker's Guide to the Galaxy maxims as the day wore on.
The last in a Cape Town-Durban-Johannesburg trathlon, today's session included talks and a panel including RisCura's Jarred Gansbeeck, Portfoliometrix CEO Brandon Zeitsman and Ian Jones, CEO and Head of Investments at Fundhouse. The three seemed quite in line with these messages, with Zeitsman interestingly speaking on clients' behaviour in times like these as a factor as serious as current macroeconomic uncertainty:
"Compsure is a rate limiting factor. The biggest risk most South African investors face is shortfall risk. We can really, quite accurately project returns over time based on different patterns, and what we've seen is that if you're in a balanced portfolio, expect 3 or 4 periods over the years that are easily harder to stomach than what we've seen lately in the markets.
"Capitulation is far more of a negative risk on portfolio. Composure is a limit, and clients' behaviour can be a rate limiting factor."
The day was wrapped up by Chris Freund, Strategy Leader at Investec Asset Management, who gave a much-needed upside: "The truth is that everybody's returns have been low due to political shenanigans, but I think that the next 12 months' returns will be better than the last 12 months. Global growth is still with us, and that's good for shares. Also, emerging markets' currencies are generally behaving quite well."
So what's the moral of today's story, kids? Carry a towel, don't put all your money in bonds or money market funds (or in any one asset class, for that matter) and - most importantly - don't panic.