Timing financial markets

At cashkows.com we’ve been receiving more and more enquiries over the past few months from South African expats around the world who want to surrender retirement annuities but are unsure about timing given the recent volatility in financial markets and also, but perhaps to a lesser extent, the Rand.

It is of course important to factor in these things when making your decision, however as any financial expert worth their salt will tell you, trying to “time the market” is a mugs game. If you look at data collected over the past 75 years it demonstrates clearly that no one can predict with accuracy and consistency, which way stock prices are headed. It doesn’t matter whose results you study – hedge fund gurus, mutual fund managers, academic researchers or even fortune tellers – they’re all guessing in one form or another and sooner or later their “theories” come undone.

That said, at cashkows.com we recognise and respect that fact that you want to have control over timing, when it comes to surrendering your policies and we have designed our process to provide you with exactly this: with us you decide when your policy is surrendered and you decide when the proceeds are converted from South African Rand to your local currency.

Before you may take either of these steps however it is essential to first record your emigrant status with the South African Reserve Bank - a process that cashkows.com is happy to facilitate on your behalf, retrospectively. As it takes between four to six weeks to record such status we recommend that you set the process in motion without delay as this will ensure that you are in a position to take action, from the earliest date possible. In short – emigrate, take stock (excuse the pun) and then surrender policies in your own good time.

Once your policies have been surrendered the proceeds can remain in your “blocked” account in South Africa until again, you decide the time is right to convert and transfer funds to your local bank account.

It is also perhaps worth mentioning that for those of you who are proposing to reinvest policy proceeds in your local currency, market volatility should not affect you provided that the switch between investments is actioned quickly. In fact the current economic situation may present an opportunity as the costs associated with switching between investments will be reduced when working on a lower base value.

If you are currently in the process of extracting and repatriating policy proceeds, or if you are considering engaging our services please do not hesitate to contact us if you have any questions around the issues covered in this article….we here to help you.

www.cashkows.com

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