Global investment themes in 2015

For local investors who “follow the market”, 2014 has been a fairly tough year.

Although the FTSE/JSE All Share Index (Alsi) was up over 13% from its 2013 close at some point and reached an intraday record high of 52 323.61 points, on Monday the index had gained 10.2% in the year to date, according to data from Bloomberg.

Analysts have warned for some time that valuations are high and that investors should adjust their return expectations going forward. While the lower returns have thus been anticipated, it is the increased volatility that even seasoned investors find difficult to stomach. This has especially been the case over the last couple of months during which the Alsi exhibited considerable ups and downs.

But the bursts of volatility have not been unique to the South African market and may even continue internationally in 2015.

According to the BlackRock Investment Institute’s (BII) 2015 Investment Outlook, many commentators believe spurts of volatility “will quickly subside and be great buying opportunities, just as they were in 2014”.

These analysts could be right and therefore it might be a good idea to hold some cash aside to take advantage of these opportunities, it says.

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