The case for offshore investing
South Africa accounts for only 1% of the global investment landscape, highlighting the limitations of focusing solely on local markets. By investing offshore, you gain access to a wealth of opportunities across diverse industries and regions that drive the global economy. Diversifying offshore also offers the added benefit of safeguarding your wealth in more stable currencies, providing resilience against local economic fluctuations.
Why now is a critical moment
The global economy faces significant uncertainty due to geopolitical tensions and fluctuating markets, with emerging market currencies like the rand bearing the brunt of these challenges. While local recovery is evident, challenges like load-shedding, ongoing port and rail issues, and inflation continue to pose risks. If global events negatively impact emerging markets, including South Africa, having a portion of your wealth tied to international assets provides a much-needed financial buffer.
Diversification: It doesn’t need to be complex
Many assume offshore investing is complex or exclusive to the ultra-wealthy, but that’s no longer true. With the proper guidance and tools, anyone can start diversifying their portfolio internationally.
- Regulation 28 flexibility: South Africa has recently increased the limit for offshore investments in retirement funds to 45%. This change gives individuals more room to grow their wealth globally.
- Access to global markets: Thanks to fintech innovations, it’s easier than ever to invest in international stocks, ETFs, and other assets without needing to open accounts with foreign banks or brokers.
Protecting wealth with currency diversification
Currency plays a significant role in wealth protection. Staying on top of how the rand fluctuates against major currencies like the US dollar, euro, or pound is crucial for your finances, as adding stronger currencies to your portfolio can help protect you against market volatility and maintain your purchasing power.
How to get started
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Define your goals: Are you looking to preserve wealth, grow your investments, or hedge against local risks? Your strategy will depend on your financial objectives.
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Understand the options: There are many ways to diversify offshore, from offsh**ore savings accounts to global ETFs and property investments.
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Seek guidance: Navigating exchange control regulations can be complex, but with a specialist international money transfer provider like Future Forex, the process becomes simple, streamlined and as cost-effective as possible.
The bottom line
Ultimately, achieving financial security means being ready for whatever the world throws at you. By embracing offshore investing, you not only safeguard your wealth but also open doors to exciting global growth opportunities.
South Africa is home, and its potential should never be underestimated - but protecting and growing your wealth often means looking beyond its borders.
For more, listen to the full interview between Harry Scherzer, our CEO of Future Forex, and BusinessTech’s Michael Avery to understand how South Africans should protect and diversify their global wealth.
