What we can and can’t control

In the past couple of years we have lived through numerous crises: –  Cape Town’s Day Zero water disaster, the Covid-19 pandemic, the unrest in July 2021, and our country’s ongoing power challenges.

Then, just as we all thought we were seeing some light at the end of the coronavirus tunnel, Vladimir Putin ordered Russian troops to invade Ukraine.

In the midst of this new tragedy and its knock-on effects, there are some very important questions we need to be asking ourselves.

Can we do anything to stop Putin?

Can we stop the tanks and the bombings?

Can we help Ukraine become a neutral state?

Can we assist in creating a path to peace?

Can we stop the oil price from going up?

Can we stop rampant inflation?

Can we direct stock markets up again?

No matter who you are, or where in the world you find yourself, it is fair to say that while we could work collectively to mobilise communities to work together to influence the above, the answer to most of these questions as an individual working in isolation is: “No. I can’t!”

So then what can we do in such circumstances, or in any other crisis that we may face?

If you find that you’re becoming hopeless and anxious, then you should acknowledge that these are very valid  feelings. Many of us find ourselves in the same boat. It’s expected. It’s fine. It’s normal. And to help you make more sense of it all, here are a few thoughts that we would like to share with you.

Focus on the small things within your control

One thing we can always take command of in times of crisis is our judgement. Start by calming your mind, and then concentrate on what you can control. This will strengthen your ability to deal with whatever comes next. We know we cannot control the weather, the economy, politics or what others think, but we can take charge of other aspects of our lives.

1. War is big news, and bad news is good for ratings because this increases advertising revenue for media companies. So it’s best to limit your media exposure. Allocate a certain time of day to tune in and find out what has happened, and then turn it all off. Likewise, structure your social media time accordingly. These platforms are structured to keep you plugged in. Better yet, turn off your TV, radio and digital feeds.
2. You cannot control the petrol price, but you can drive less, which is a good thing to do for numerous reasons.. And don’t forget to switch off lights and appliances that aren’t being used.
3. You cannot stop rampant inflation, but you can shop mindfully and reduce unnecessary expenditure.
4. Work with the best fund managers to seek out investment opportunities as they become available.
5. If you can, provide financial support to the refugee relief efforts in Ukraine.

Financial Reactions

As is expected, we are often so caught up in the human tragedy of war that we fail to  recognise that in dramatic, historical  times like these,  money moves from weak to strong hands. We need to be aware of this in order to make wise decisions. Markets react negatively to uncertainty, but the best investors are working furiously to see what has been oversold in the panic to ‘get out of Russia’.

As you read this, there are portfolio managers with teams of analysts all over the world relooking their portfolios and reviewing every decision made. These tragic events provide new challenges and investment opportunities, as well as the ability to buy into well-managed companies that have been oversold.

This does not mean that you need to make adjustments to your investments. Rather leave the difficult decisions to experienced asset managers who make these on behalf of their investors. And finally, remember that there is an added advantage in that changes within managed funds do not trigger a Capital Gains Tax event.

Rise above the noise

1. Try and avoid knee-jerk reactions to the economic sanctions being placed on Russia. Ask yourself how many Apple products won’t be sold around the world this year? How many fewer bottles of Coke will be sold? Who will stop using Amazon, Google, Netflix and Microsoft globally as a result of the invasion?  The answer is that demand in Russia and Ukraine will obviously drop massively, but the effect of this will be relatively small on a global scale.
2. Are there any positive outcomes from this war? Nothing can make up for the devastating loss of life and widespread destruction, but there are a few inevitable upsides. Russia, a massive supplier of commodities, is now excluded from world markets, meaning many countries will need to turn to South Africa. This increased demand will benefit our commodity and mining companies, the JSE and the Rand. Increased profits from these companies create additional tax revenue for SARS, something we have already seen in the latest budget figures.
3. Some companies will not fare so well. Russia was/is an exciting emerging market in some respects. Any listed companies with ties to Russia have been sold, and panicked investors have conservatively written their investments down to zero. Importantly, if they continue to hold these stakes, they will benefit after the war, when these companies resume business in Russia.
4. Petrol prices will reduce at some point as OPEC and oil producers adjust supply. As this happens over time, inflationary pressures will gradually reduce.

Unfortunately, there is much that we cannot control, but focusing on the things we can do something about – however small – will give us a greater sense of wellbeing.