Look
When good news whispers and bad news shouts
The market feels a bit jittery to me. This is why I liked this graph, as it illustrates this point beautifully.
When markets are highly valued (i.e. expensive), good news stops being a surprise. That’s why we’re seeing stocks rewarded less for beating earnings expectations but punished sharply when they miss.
Much of the optimism is already priced in, so simply doing “a bit better than expected” isn’t enough to drive prices higher. Investors are starting from a place of confidence, but that confidence is fragile.
This creates an uneven market where the downside matters more than the upside. Earnings misses raise immediate concerns about growth, margins and resilience, especially in a higher-interest-rate world. As a result, investors are becoming more selective, favouring quality businesses with dependable earnings and sensible valuations.
The message from markets seems clear: returns are still possible, BUT they now depend more on discipline and fundamentals than optimism alone.
Source: NinetyOne
Listen
Choice overload
Barry Schwartz’s 2005 TED Talk on The Paradox of Choice is twenty years old, and yet it feels even more relevant now than it did then.
We live with the belief that more choice equals more freedom, but in practice, unlimited choice often delivers the opposite experience, which is typically in two ways.
The first – Paralysis: The cost of too much choice is that we don’t always choose better, and sometimes we don’t choose at all. We see this clearly in our industry when people try to navigate investments on their own. With thousands of funds, platforms, strategies, opinions, and market headlines competing for attention, “not knowing what to do” can quietly become doing nothing. And in investing, doing nothing isn’t neutral; it leads to missed opportunities and long-term compounding.
The second – Dissatisfaction: When there are too many options, the decision doesn’t end when you choose. You end up comparing, second-guessing, and wondering if you made the right decision. Even a good decision can start to feel like a compromise, simply because you can see so many other paths you didn’t take.
Of course, the point isn’t that choice is bad. Some choice is better than none. Having options, however, is a privilege many people in the world simply don’t have. In that sense, the paradox of choice is a modern (wealthy-society) problem. Whereas poverty doesn’t overwhelm you with endless options, it limits you.
I personally find social media and its never-ending content push very overwhelming and have decided to take a break from all of it. I don’t know if there is a good solution here, but it does raise a worthwhile question: In a world of unlimited options, could some limitations (whether by design, discipline, or structure) make room for contentment again?
Learn
Lower inflation will affect your financial planning
The South African Reserve Bank (SARB) Monetary Policy Committee (MPC) recently stated that it was now aiming for the lower end of the 3-6% CPI (inflation) target range, rather than the previously communicated midpoint of 4.5%.
This article from global investment advisors, Fundhouse, argues that lower inflation (closer to 3%) could be good for South Africa overall. More stable prices and lower interest rates can support economic growth and reduce pressure on households.
BUT there’s a trade-off: in a lower-inflation world, investment returns are also likely to be lower. Cash and bonds may no longer offer the high yields investors have become used to, and equity returns may be more modest, even if they still grow meaningfully above inflation. Importantly, in this scenario, the Rand is also likely to appreciate or depreciate less against major currencies.
Why does this matter for your financial planning? Most plans are built on assumptions from the past, when inflation, interest rates and returns were higher. If inflation stays lower over time and the Rand is stable, those assumptions will need to be adjusted.
We are not there yet. Moving sustainably to lower inflation depends on factors that go well beyond interest rates, including alignment among government, business and labour, better management of administered prices such as electricity and education, and meaningful fiscal and structural reforms.
Many key drivers of inflation, such as oil prices, are beyond the Reserve Bank's control.
While the idea of a lower inflation target has merit and growing market support, the ability to implement it in the near term remains uncertain. For now, inflation is likely to stay elevated and pushing too hard or too fast could unsettle markets. That said, expectations may slowly shift, and with that, financial planning will also change.
Ponder
In this section, I invite you to think about a question I may pose or a thought I may share.
Something to think about, when planning your year ahead:
What drained your energy most last year?
Oenophilia
“Oenophilia simply refers to enjoying wine, often by laymen.”
This month’s wine pick is Newstead Rosé. I featured a Newstead wine last January, too. The farm is based in The Crags outside Plettenberg Bay, right near one of our favourite holiday spots. I love supporting locals whenever we travel, and I always encourage others to do the same. It’s often how you stumble across those lesser-known gems that end up becoming firm favourites.
Anyone who has followed me for a while will know I love pink wines, and this one is no exception. It was the family’s favourite wine choice on holiday. We sipped it at lunch, with dinner, and even packed it along for our outings up the Keurbooms River. It’s easy-drinking, versatile, and the kind of rosé that somehow fits every moment without trying too hard.
Stay curious,
Elke Zeki