February topped off another month of positive returns following January’s strong start to the year. As the economic carnage of 2020 lay clear for all to see with the release of last year’s GDP figures, it is the prospect of the world’s largest vaccination program that has taken centre-stage. Following further stimulus packages and relief measures to bolster and boost consumers, the global economy appears to have turned a corner and is now looking through the economic devastation of the virus, and forward to a post-COVID world.

Although markets reacted positively to finance minister Mboweni’s Budget Speech last month, the country’s finances remain precariously balanced as we wait and watch for the implementation of the policies and achievement of the goals set.

Globally, markets continued their recovery, supported by accommodative Central Bank policies and stronger-than-expected fundamentals, driven by declining infections and hospitalisations, along with the associated lower risk of lockdowns and economic restrictions. The unveiling of the US’s $1,9 trillion stimulus package of last month (that’s 1,9 followed by 12 zeroes, and in dollars!) means citizens will receive $1,400 in direct payments, aimed at helping revive consumer spending and support in other areas, like healthcare and tax credits.

While nobody can rule out the risk of a ‘third wave’ or of vaccine-resistant future strains causing a resurgence in infections, the likely disappointment we face to an improved economic outlook is the inability to vaccinate populations at a pace consistent with achieving the goals required for ‘herd immunity’. And any statistic or indication of this is sure to send ripples through markets and asset prices, as we have already seen over the past few months.

If anything is certain it is that volatility will remain a prominent feature for the foreseeable future. But remember Warren Buffett’s sage words:

“Games are won by the players who focus on the playing field, not by those whose eyes are glued to the scoreboard.”

Wishing you all a safe and successful month ahead!

Steve Crouse
Chief Investment Officer and Senior Advisor