Worldwide Fund Commentary - February '21

We saw the continuation of the equities rally in February, driven by similar factors as in January. Due to the optimism in the market as more people get vaccinated, fiscal stimulus from the US government as well as the Fed chairman stating that they will be keep interest rates low in order to support economic recovery.

Blog Post 1

The direction of commodity prices remains important for many emerging market countries, South Africa included. For example, our mining industry generates more revenue when commodity prices are strong, which means our government collects more income tax, improving our country’s financial health (we in South Africa so desperately need).

Blog Post 2

Bubbles are always a contentious issue. The one defining characteristic they all share is an excess of optimism. And there are certainly examples of this in the current landscape – Bitcoin, Tesla, GameStop, and the rise of special purpose acquisition companies (SPACs), all fit the exuberance bill.

Blog Post 3

The biggest threat to the global equity and fixed income asset classes is a steep inflationary kick in the US. Such a move would likely force the Fed to hike interest rates faster than the market currently expects.

Blog Post 4

The value of partnering with a business that understands wealth creation is that they can help you stay focused on what matters.

Blog Post 5

Hot market trends must always be examined through a sceptical lens. It’s all too easy to take the broad acceptance of an idea and assume that the herd has done all the research and thinking necessary to make it bullet proof.

Blog Post 6

One of the fundamental characteristics of Bitcoin that its champions find attractive is its boundedness; there will only ever be 21 million coins. The argument goes that the value of the cryptocurrency is, therefore, immune to devaluation by an increase in supply, unlike the US dollar