2020: the year in review

Wait, it’s December already? I don’t think I need to tell you it’s been quite a year, one many of us will be happy to see the back of! But we have survived many things this year, let’s take a look.

Every December, as the year draws to a close, I use my time away from the office to reflect on what happened over the past 12 months and what I think we can expect from the next year. I use this time to take stock; to consider where we could have done better; and how best to navigate the business, our staff and our responsibilities to our valued clients during the upcoming year.

December 2019 was no different. I had a glorious family holiday and came back rejuvenated, enthused and all ready for what I truly believed was going to be a fantastic year. I was not the only one. We had all heard about this Covid-19 virus wreaking havoc in China, but that didn’t have anything to do with us – or so we believed.

We started the year with the rand trading at R14/$1 and our stock market, having had a volatile 2019, finishing a respectable 12% positive for the year.  But by March 2020, the markets were down 36%, in line with world markets, and our currency was down 36% to R19:$1. Full credit to the proactive Reserve Bank for slashing interest rates to multi-decade lows in an effort to keep our bleeding economy afloat.

As countries around the world got their heads around the severity of the pandemic and what was needed to stop it, previously unimaginable measures were put into place. Nationwide lockdowns, mask wearing and other protective measures became the norm.

The result, in South Africa at least, has been binary. As a country we have done very well in containing the virus, and although we have tragically lost more than 22 000 lives, the initial estimates were much worse. I hope we remain vigilant going forward, until we are able to secure a vaccine. As I write this, however, the threat of the dreaded second wave is looking very real.

The economic devastation has been a different story. South Africa started the year on its knees, with a decade of corruption, widespread ineptitude and state-sanctioned looting already having taken their toll on the economy. We finished the year with a downgrade, massive unemployment, widespread and growing insolvencies, and a challenging and unclear future.

But as I have quoted many times before, adversity creates opportunity. Despite many offshore markets fairing far worse than our own markets, our offshore funds have done exceptionally well this year – kudos to our London team! Our local funds have held their own and we are proud of this too.

On this note I wish to thank our phenomenal back office team. In the most trying and pressurised year, this team delivered a truly stellar performance and we thank each one of these staff members for this.

So, what can we expect from 2021? November was a massively positive month. Markets reacted well to the positive news of vaccines, with the UK already beginning its widespread distribution of the vaccine. Other countries will no doubt soon follow suit, with South Africa expected to receive the vaccine in the second half of 2021.

Our political situation remains perilous, but there are increasing signs of positivity on this front.

Octagon Financial remains cautiously optimistic, but we are still looking offshore for solid long-term returns. We feel that our funds, both local and offshore, are well positioned to help you navigate these challenging times.

We are all in need of a little time out, even if that means staying home these holidays.

I would like to take this opportunity to wish you well over the festive season.

Here’s to a better 2021!