The last 3 years have been very telling.
We have had to deal with Covid that changed the dynamics of the world,
the Ukraine War in early 2022 and China’s extensive disruption to the supply chains, with its zero tolerance to Covid.
2022 was a difficult year, with inflation problems rearing its head around the world which led to interest hikes to subdue inflation.
England was definitely tested in 2022. She suffered the loss of her queen and faced a dismal political situation with 3 prime ministers and change in finance ministers.
With Covid, South Africa was not as badly effected as other Western Nations. With the War and energy crisis that has emerged, the supply chain disruptions and tough monetary policy it is evident that the offshore positions have suffered considerably more than our local positions. The JSE has been one of the best performing stock markets in the world. Local investments have done very well over this period.
2023 may be one of the better years. The markets are corrected to a larger extent and most of the bad news and more, will have been priced into the market. Oil prices are relatively low, around $80 per barrel, China has finally stopped its zero Covid policy and although suffering from Covid Pandemic now, it may do better later this year. Inflation appears to be coming more under control.
Some of you have realised some CGT, enough to effect your taxes. To mitigate this we will be looking through your investments and where we see a unit trust or share position with unrealised losses, we will advise selling that position and immediately rebuying it back. The selling will cause a `CGT event and the buying back will restore the position. These actions we call CGT Offset. The losses generated out of CGT Offsets can be used to offset gains made in the same year.
Lastly it is that time of the year we have to think about tax. End of February is the end of the 2023 tax year. You may want to top up your contributions to your RA’s to obtain a tax deduction. Please call us if you want to consider this.
We wish you all the best for 2023!
Kind Regards
Nick
Certified Financial Planner CFP®
Please note: This article does not constitute advice