Inflation and the “cost-of-living crisis” is engulfing economies from South Africa to the US.
Inflation and the “cost-of-living crisis” is engulfing economies from South Africa to the US.
Image: Alex Mit/123rf.com

They say money makes the world go round — or does it merely go round the world? Those who have it and have chosen to invest in one asset or the other will have experienced a lot going round their heads since the start of 2022.

There’s probably also a view that if the market disruptions in the first few months of the year have had you in a spin, you probably don’t have enough money anyway. That’s unfortunately true for most of us, even readers of Wanted. If you own a collection of vintage cars, a Picasso or two, and a wine farm in the Western Cape, you are probably doing just fine. It’s the rest of us — saving for that overseas holiday now that Covid-19 looks like it might give us a break, or putting away a modest amount in the hope that when we retire we’ll have a chance to take that northern lights cruise along the coast of Norway and still have a bit over to pay the electricity bills — who have to worry.

If memories of my enforced Sunday-school days are correct, it was Jesus who said that man (or people, rather) cannot live by bread alone. It’s the same with reading. Wanted comes out once a month and gives us welcome relief. The rest of the time we have to read the serious newspapers, and they haven’t been light-hearted.

It’s all about inflation and the “cost-of-living crisis” that’s engulfing economies from South Africa to the US. With every inflation report in the US, investors have braced themselves for higher interest rates, and the impact will trickle down all the way to us. So, if you have an investment portfolio with a significant portion invested overseas, your head is probably going round and round. But if you are a pensioner living on a fixed income, you’re probably thinking it’s about time. There’s always a silver lining for someone, at least.

With the talk of higher borrowing costs and headlines about tanking stock markets, I broke one of my rules and checked how my modest portfolio was doing. It wasn’t pretty, but at least it affirmed my own advice, which is, unless you are close to retirement (in which case, you should have already moved a bigger portion of your savings to “safer assets”, such as cash, despite the negative returns once inflation is taken into account), don’t look.

I can confirm that I am a lot poorer than I was on 21 December 2021. But, then, I may have anything between 12 and 20 years left as a working person. With the markets as volatile as they are, who knows whether I’ll be richer or poorer in April, let alone 2042?

Another principle I have retained from my Sunday-school days is not to worry too much about things that I can’t control, though this is easier said than done. How am I going to get myself through these troubled times? The one thing we have to our advantage is that our markets have been in flux for more than a decade now, and the world has seemed consistently to be on the verge of ending.

So, I’m just going to relax and enjoy reading about the people who do have actual wealth. How do they spend it, save it, or, more impressively, give it away? This seems like a lot more fun, and is definitely better for the heart than watching my own virtual wealth going up and down like a yo-yo. That’s always a recipe for making disastrous decisions.

 Mnyanda is the editor of Business Day.

 From the March edition of Wanted, 2022.

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