Good day, and a warm welcome to our 1st newsletter of 2023.

With inflation peaking around the world and interest rate hikes moderating, the focus in early 2023 will switch from inflation to worries about growth, or lack thereof. But there is a silver lining. A peak in US interest rates should see a slowing dollar, which would benefit emerging markets like SA.

Important questions for the year:

• Will 2023 see some sort of resolution in Ukraine?
• Will China maintain its loosened Covid restrictions?
• And what will SA look like politically with the ANC Elective Conference finally behind us?

IN THE NEWS:

• The JSE All Share Index raged from 73 485 on 15 December 2023 to 80 129 on Monday 23 January 2023. The past 90 days saw a 23% growth in the index.
• 1 US Dollar will cost you R17.18; 1 Pound = R21.28 and 1 Euro = R18.69.
• Annual consumer price Inflation declined to 7.2% from 7.6% in October. Expected inflation for the year is between 5.6% and 6.0%
• The prime lending rate in SA is 10.5% per annum. We might see another small increase this week.
• The price of Oil is $88 per barrel.
• Nersa approves 18.65% electricity tariff hike for Eskom, effective 1 April, and a further 12.74% next year
• 60% – the amount by which Bitcoin and Etherium fell in 2022

SLIDE OF THE MONTH: 2023

The following chart compares growth expectations of different asset classes over the next 5 years, compared to a benchmark of CPI inflation plus 6%:

The end of February is the end of the tax year – a great time to take a close look at your investments and consider taking maximum advantage of the incentives available to encourage us to save.

There are certain annual tax benefits available to you through your retirement funds (RA) and tax-free investment (TFI) account.

Every year you are able to make a pre-tax contribution to your retirement funds of up to 27.5% of the higher of your taxable income or remuneration, capped at R350 000 per tax year. If you have not maximised this benefit, you can make an additional contribution to your retirement annuity (RA) in the form of a lump sum. If you are invested in your employer’s retirement fund, you can make an additional voluntary contribution (AVC), or you can start an RA in your own name.

The other annual benefit the government offers is the ability to invest R36 000 per tax year (up to a maximum of R500 000 over your lifetime) of after-tax money in a TFI and benefit from growth free of dividends tax, income tax on interest and capital gains tax.
Retirement funds and TFIs fulfill different objectives and it may not be an either/or decision, but rather a question of using both for different needs.
TO

TO CONCLUDE

Let us help you to build a financial plan to achieve your financial and wealth goals. The best time to start saving, get control of your financial affairs and building wealth is now.

Wealth regards,

Fanie Jansen Van Vuuren CA (SA), CFP®

Director: FC Wealth and Investments (Pty) Ltd

E: [email protected]  |  T: 083 384 5868

W: www.fcfin.co.za