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This section explains our investment heat map rating. It is the perceived sentiment of the market as a whole. It indicates whether or not the stock market in general, is a buy, sell or hold. You'll find the heat map rating around the website in the left hand column. The purpose is to get in and out of your portfolio at optimum levels. Now if you don't know or understand the reason for doing so, read the article, "The Power of Switching Funds," and then come back and read further. The indicator is based on the general equity index, it's based on economic data that comes out, it's based on activities in the economy today, that will affect it later, it's forward looking, it's based on fund manager views and it's based on common sense. Some recommended funds, will be highlighted in the drop-down menu under investments which you can switch your funds too, based on the investment heat map indicator and in-line with your risk profile, which may need changing. The heat map is rated from  to  
is rated an aggressive buy and indicates we think the stock markets are at good buying lows. So this means changing your risk profile to aggressive from conservative. At the beginning of the new bull market, some sectors do far better than others, so we start moving over into those first. And then later, rotate sectors, to now take advantage of the other sectors that play catchup.
is rated moderate and you can start nibbling or buying on stocks and moving portions of your portfolio into more aggressive positions, more risk. 
is rated neutral which means stay on the sidelines and do nothing if you're out of the market already in a recession. If we're in a bull market, keep those positions. It means be patient, wait and see. If we're in a recession, lower prices will still follow, wait for ratings 1 and 2. 
is rated moderately conservative and you should not be adding major new positions as far as large lump sums to your investments. You can even consider moving 30% of your portfolio into conservative funds.
is rated conservative, which means we think we're close to the end of the bull market and already in a recession, so you should consider selling your positions and moving to more conservative investments like money markets. In your investment portfolio, this means switching funds, whether it's a unit trust, retirement annuity or savings policy.
Now with this information, one can readjust your risk profile, to be more appropriate for the current market conditions. Which will allow you to position you funds or to make a better fund choice in your savings, unit trust or retirement policy. Why? Because not all funds are created equal and not all funds are created for all kinds of market conditions. And so some will lose money. We don't want that, because then you end up with a heck of a lot less money in the long term - even the short term. So we do this to protect ourselves and to make sure that our portfolio's are always making money, consistently. I especially recommend this for people with more than R50,000 in their portfolio. If you've got millions, it's a must. Below is a picture, to give you an indication of when and how the indicators would be applied looking at the stock market, in this particular case, the Dow Jones. 
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Last Updated on Friday, 28 November 2008 07:36 |
Investment