Guiding consumers since 2009

What's in an economic turnaround?

By Staff Writer

The economy is a complex beast that sometimes changes into a bear, sometimes into a bull. The bear is a shy creature that prefers to hibernate the winter away and swipe anyone who comes close, the bull is more likely to bellow, stamp and charge. These two animals describe a significant part of what moves the market. Fear and Greed. The underlying economic fundamentals may define where the market is on a more macro scale but the day to day movements will fluctuate between bear and bull, fear and greed. 

 

  • Are the green shoots for real?
  • Is the economy turning around?
  • Is this just a bear rally?

 

There has been much talk about the economy starting to shows signs of green shoots or that it is starting to turn, heading us towards the economic turnaround. However talk is cheap and has an expensive effect. For every voice crying green shoots there is another counselling caution. The market is duly affected by these pronouncements. A bear rally is when a little bit of greed is reintroduced into a fearful market trend to get a quick return with no real underlying turnaround present. The green shoots talk may be just that, a bear rally. The market is affected by psychology and this spins its fluctuations around real value.

The markets are notoriously hard to predict and many of the socionomic effects are not costed in. The figures tell us that we are in a recession but that inflation is looking better, that the World Cup will bring big bucks. The truth is somewhere out there and no-one can be totally sure what will happen next, but planning a budget and putting more aside into a savings account are the realities of now compared to the spend, spend, spend on credit from before the financial crisis. We don't save enough in South Africa and while the National Credit Act has certainly helped us we still need to be more austere and only spend what we really can, rather than what we think we can.

Recent Articles

Featured What’s the deal with underwriting?

When you apply for a long-term insurance policy, a financial adviser will ask some personal questions about your lifestyle, family history, health, and even ask you to take some medical tests. This process is called underwriting, but is it really necessary?

 

How are you taxed on your retrenchment package?

Unemployment is one of the biggest problems in South Africa. The emergence of the Covid-19 pandemic has exacerbated the situation with a lot of companies retrenching their employees.  When retrenched, you’ll receive a retrenchment package, but do you know how much tax you’re liable for?

Car repossessed – don’t be taken for a ride

When the country is facing an economic downturn, chances are your finances will feel the pinch. This can lead you to make bad financial decisions such as skipping your vehicle payments. But every decision has consequences and if you don’t pay your instalment, the bank will repossess your car. But what can you do when this happens?

 

Why you should consider gap cover

Your medical aid should protect you from incurring large medical bills when you’re sick. But what if your plan doesn’t cover the full cost of your medical expenses? We got in touch with insurance experts to find out whether gap cover is worth having.

Deals

Office furniture at discounted prices at BDK

Price: Available on request
When: Daily
Where: Johannesburg

Da Vincis Happy Hour Special

Price: Available on request
When: Daily
Where: Cape Town

Use your Absa card and get 30% cashback at Dis-chem

Price: Available on request
When: Daily
Where: Nationwide


Latest Guide

Guide to debt rehabilitation solutions