With the rand currently at its strongest level in some time, many are wondering: is now the right time to invest offshore?
Research shows that you’ve as much chance of getting the answer right as you do of correctly forecasting the weather for the next five years. Investing offshore is not only about the level of the rand but about so many other things too – your time horizon, what you want to buy with the foreign currency, what you are selling to fund that purchase, and what you want your money to do for you.
Yet, we love to be right. I, too, still fall into the trap of trying to answer the rand question. It feels smart. However, I’ve concluded that the idea of being right is delusional. Instead, I choose to approach decisions as choices with consequences. Typically, precise consequences cannot be foreseen, and often, we are just lucky if the consequences do work in our favour.
To avoid this trap, it’s helpful to limit decision-making where possible. Many successful people limit even the smallest decisions. For example, Mark Zuckerberg wears similar outfits every day, mostly grey T-shirts while Steve Jobs was famous for his black turtlenecks and jeans. Even Einstein wore a grey suit, white shirt, and slip-on shoes every day.
Sometimes, paying to reduce decision-making makes sense. Personally, I find value in paying a personal trainer for two sessions a week, so I don’t have to decide whether to go to gym and what to do – I just show up.
Money decisions are no different. It’s better to make smaller contributions to investments over time, rather than looking for the best time to invest a lump sum. It’s better to set up a debit order so that money moves into your retirement savings reliably, instead of waiting until the end of the month to see what you can spare.
I also believe that it is better to remove yourself from the investment decisions. Paying someone to handle your investments can help you avoid the temptation of making unnecessary decisions that seem smart at the time.
It’s good to remember that limiting decisions isn’t about taking the easy way out. It’s the smart thing to do for your long-term well-being.
Ps. I am taking a break from blogging for a while, chat in a few weeks.
I love to hear your comments. If you are not on our mailing list, you can subscribe to receive this blog every week on our website www.foundationsa.com.
Kind regards,
Sunél