Global And Local Investment — Investing during these uncertain times

It is a Monday night, once again, what's involved on MIX 93.8? It's currently brought to you by Global and Local Investment Advisors. We are living in some interesting times. Michael and Moro, how are you guys? Good evening. No, we're fine. It's been interesting while working from home. It's very strange having my whole family all around me every day, which is nice. But I also like to have my own room. And also interesting enough, I find that working at my house, I'm actually working harder than I normally work, which is very odd. Moro, how's it been for you? Actually, similar to Michael, I'm actually quite surprised how much work I'm actually doing. So interesting and in some ways a little bit out of my comfort zone. But yeah, you know, hey, out of the comfort zone is good, it makes you do things differently. So you know, it's tough, but we've got to do it. So just get on and do it. Yeah, I was actually thinking back just a little while ago to our last discussion that we had. And it sort of was a little bit prophetic, I think, because here we are in a 21-day lockdown. But lots of questions, lots of people are stressing, people are worried and they're nervous. And you know, this is the time when many, many bad decisions can get made.

So there's been some questions that you guys have had that we've had. Michael, if we can start off with you. One of the big questions, and I actually my mom actually asked me the same question is with all this that's happening, should I withdraw all my investments? No. If you did want to, it's happened. The markets have fallen heavily. In the last 100 years, the markets have every five to eight years fallen heavily. On average, they've all taken between 90 days and about a year and a half to recover fully. Right now, the world is in a flat spin. It's a flat panic. We are telling everybody, calm down, take a breath. If you change your investments now, you lock in a loss. There is a loss, but if you can hold it out, close your eyes for the next half a year, things will be a lot healthier. Okay, well, that's good news for some. But now a lot of people have been talking about this, having a conservative mix of funds during these times. So what is the meaning of a conservative mix of funds? Okay, so conservative mix of funds is where you're using either one fund that's got multiple assets in or different funds that have different assets in them. So if you look at Regulation 28 as an example, Regulation 28 is the Prudential Investment Guidelines for Pension Funds, and it refers to the maximum that you can have in listed markets mainly, and maximum that you can have offshore.

But in essence, a conservative mix of funds is really a fund or a number of funds that have got the following elements. They've got some money in the listed stock market, like the JSE. It's got some money in cash assets that give you an interest. There's some money in government and corporate bonds, which provide an interest and a little bit of capital gain. And then you've got some exposure to offshore markets as well. You put those together and you've got a mix of assets that are able to carry you through times such as this, because not all of it is exposed to, for example, the stock market. Now we're in an interesting time at the moment because stock markets have come off, so we expect them to rebound at some point, as Michael was saying. But we're also having interest rates that are being cut. So you've always got to have this mix of different assets in a conservative mix. And the more cash and bonds you're having there, the more conservative it is. But you have to remember that conservatism costs you when markets rebound, because then you're not exposed to the stock market where the money is being made. I hope that answers the question. It certainly does, and it's a very interesting point that you raised there.

But this, again, is something that you guys at Global and Local Investments are on the lookout for all the time with your clients. This is something that you tell them, listen, I think we should move this year. We should do this. We should do that. So they're in good hands if they're with you. If I can interrupt, about a month ago, all of our clients, we had an itch. And our itch said the markets would fall heavily. So around a month ago, we amended our general clients find allocation to a much larger portion in cash, just in case. And we were right. Okay. All right. Well, talking about being right and about you guys sort of predicting what's going to come, the equity markets, Michael, have taken a massive knock. Why is that? Panic, pure panic. So up until the end of February, the world was a wonderful place. Everything was rosy, airlines were full, hotels were full, everyone was planning their holidays in Italy and economies were going fantastically well. And then there was a blind panic about this tiny virus, which no one can see and no one knows if it will affect them or if they will live or die. Everything went out the window, logic gone. In a blind panic, everyone said, I have shares, let me just, let me just exit out of them all and enter them into American, American government bonds earning practically naught.

Obviously American government is at risk. So that was the thinking. In March, there's over the last 135 days of American markets being measured. March had five of the worst trading days in history and they had the five best trading days in history. It's the most bizarre thing I remember watching on a Thursday. The markets fell 11%, 11%. If the American markets fall in excess of 10%, they are locked down for a period and open again. It fell so quickly, it was locked. That hasn't happened from 2008. The next day, the markets were up 10%, within 24 hours. So it's blind panic, but it is also, in our industry, there are many index funds, algorithmic funds, which no person physically buys or sells shares. It is a computer program, which actions everything and that has also added to the panic because those programs follow logic and because there isn't any now, it made the whole situation worse. Okay, it is what's involved and it is probably brought to you by global and local investment advisors. We'll be back in just a bit. I want to ask a question of Moro when we get back. Sure. But we're back, it is mix 93.8. What's involved? Proudly brought to you by global and local investment advisors.

Moro, just before the break, we said that I wanted to ask you a question because a lot of people are talking about this and there's people on both sides of the fence here, with the markets being hit so badly, is this a good investment opportunity, a good time to maybe enter the markets? Yes, it is. However, so if you look at the markets, they've all come off and if you remember that markets represent companies, those companies haven't by nature changed. So you look at a South African company like Standard Bank, it was a good bank before all this happened. Inside Standard Bank, realistically, nothing has changed. All that's happened is that the valuation of Standard Bank is now lower. So if it was a good company before this turmoil and the price was at that level, the price where it is now is reflecting that you're getting the same company, the shares in the same company at a much lower price. So if you look at that, it presents itself at the moment as a perfect opportunity. But in markets, there's always the but, and the but is this, we don't know where the bottom of this market is. In previous markets, if the market was down 25%, 30%, you'd start saying, well, we're getting to the bottom because that's typically how it works.

This coronavirus has brought in something we don't know how to measure just yet. And that is, we don't know, for example, how America is going to do with this coronavirus and that could set the whole world into recession. So it is a good opportunity. And it might be a good opportunity for those who are taking a long term view, because when these markets turn around, they're going to turn around fast. And then, obviously, investments, yeah, investments will go up, yeah, correct, yes. But if you go in now, you might see some loss before you see profits picking up again. Okay, Michael, we're talking about Mora just mentioned that, you know, we don't know where the bottom is. How long have you guys sort of done your research, etc, etc? Have you got an idea? How long do you think these markets are going to continue to underperform? And till there's hope. So when the numbers in the countries that matter, which isn't Africa, unfortunately, when Europe, America and England, once their cases peak and they come down, there'll be hope in the markets. If overnight, someone, some company said I have a cure, the markets could within a week go up 30%. That is unlikely. We think that England will probably in the next couple of weeks turn the corner.

America appears to be in a hurt, hummus, they don't know what they're up to. Donald has lost the plot. Hilton hotels are empty, his own hotels are empty. So we don't really know if he is his own interest at heart or America. I don't know. But yes, interesting man that very interesting. So there are 35 companies plus now working on a cure. They all say it's going to take a year to 18 months. But there are also medicines out there that help. Now that's all beautiful, but it hasn't happened yet. So my thinking and the company's thinking is until the end of the May, it's going to be all over the place. The markets will probably for a further 10%, it will then probably for a while go up down, up down, up down. Then there is that Eureka, a moment, the markets could within a period of a couple of months make up everything. In 1918 when the Spanish flu peaked and came down within four months, the American markets had gone up 50%. Wow. So I wish I had a crystal ball. In this situation, if I can use a good example, over the last week I probably read 150 articles plus on all these experts. And all of these experts don't have a clue in simple English. Looking at it logically and practically, there is a lot of damage being done in the world right now and there will be further damage.

Now to measure that is unknown right now, the general consensus is once the virus slows down within half a year to nine months, the market should be back to normal. Okay, well that seems fair, I mean I don't think anybody is celebrating about that but it does seem fair. David, can I come in there quickly? Yeah, sure. So the one thing I wanted to add is when markets turn, it's different to when they start going down. So when they start going down, it's splashed all over the newspapers, markets tanked x percent, when markets turn, they do it quietly. So there is going to be a whisper, that whisper turns into hope and all of a sudden you start seeing markets coming back and it's so difficult to predict that bottom and that's why we were saying we don't know. Because you hear a whisper today and it's the wrong whisper so we just need to be aware that if you are invested, stay invested. So now the question is now, while I'm chatting with you, investing offshore, is this now a good time? Okay, so again, no country, no market has been spared from this outbreak. Is it a good time to, well it's the same, there are many buying opportunities offshore. I mean, if you just look at how much the fangs have come off, you know, the Facebook, Amazon, Netflix and Google, those all are presenting as great opportunities at the moment.

You've even got the big large industrials offshore. I mean, you look at Volkswagen, you look at companies like Nestle, all fantastic. But are we at the bottom of the market and that's the question we are asking. So my view is this, if you want to do it, do it, but just understand that you've got to take a long term view at the moment and you know, at the best you're probably nine months away from having a good return to maybe longer. And it all depends as to what happens with the virus when cures or vaccines are found and what happens in the United States. The United States is the biggest economy in the world and you know, they say that when the United States sneezes, the rest of the world gets pneumonia. So if they have a slowdown of the scale of Italy, for example, we're all in trouble. But you know, when again, this market will turn as soon as we sort of come to grips with dealing with this either as a long term solution or somebody finds something and like Michael says, there's hope. Yeah, you know, straight to you in a second, Michael, but this is this is my concern is that, you know, I've been following quite a lot of what's happening in the States and the US and I know a couple of people over there and they just really don't seem to be taking this seriously and I sit and I watch those figures climbing like a skyscraper and they're still going.

Yeah, no, we'll still go out. We'll still do this. It's I think it's nuts and I think that's going to have a big impact. Sorry. Yeah. Just an answer to your question, is it a good time to invest offshore? The other factor as well is right now our brand has collapsed. A month ago, one dollar was equal to 15 grand. It's now over 18 grand. Yeah. Ask me about it. It has a whole lot of internet services and I pay in US dollars. Ask me how much it hurts. Also as well in the last while a rating agency Moody has made South Africa junk. What has also happened is our top five banks has also been made junk. What that means is that the country and our banks if they are making offshore loans, they have to borrow from interesting countries and they have to borrow at rates in excess of the rates now. So our thinking is the brand could get worse before it gets better. The new brand level in our thinking is around 1650, but in order to get there, we have to first of all get over the virus and get the country operating again. If the brand comes back to 1650, our thinking is at that time absolutely of your assets, you need at least between a third and half offshore at all times. Alrighty, it is what's involved.

Proudly brought to you by Global and let me try that again with my teeth in proudly brought to you by Global and Local Investment Advisors. You see the brand is starting to go here. When we come back, we'll be turning to the guys a little bit more, I'll have a question again for you more when we come back. It is mix 93.8, some legendary radio for you. It is what's involved, proudly brought to you by Global and Local Investment Advisors. So we were talking about offshore, when to invest, when not to invest. A question that came in, somebody just said here, Mauro, I just had a look at mine and my children's investments and it looks like we've lost quite a bit of money. In your opinion, what should we do? Should I take all of my money out and keep it in my bank account? The same for my children, I mean what advice do you have for us? I know people are now wanting to hide money under the mattresses like in the old days again. Okay, I'm going to answer that in a second, I'm just going to first add to what Michael was saying quickly. So the Moody's downgrade and the subsequent downgrade of the South African banks by Fitch. The downgrading of the banks is, it doesn't mean that our banks are sort of bad at what they do or that they're not secure.

It's simply because they are in South Africa. So South Africa as a sovereign has been downgraded so by nature, the banks have to be downgraded. So I just wanted to sort of highlight that point. Okay, so somebody who's looking at their and their children's investments, they haven't lost money, they've lost value. So in essence, the investments were valued at let's say 100,000 rand and they're now valued at 60,000 rand. If they're taking money out, effectively what that means is they are removing the chance of going back to 100,000 rand. Because they're now taking money out and they've got the cash in hand and it's no longer invested in the assets it was. So the first thing is don't panic. We know it's hard to say and every time you look at the news and you look at your statements, you get that sort of mini heart attack and that sort of sweat that's coming out at the back of your hands. But just realize that half of our investment strategy is don't listen to your emotions and stick with a strategy. So don't panic, doesn't matter if the world is taking a battering, like Michael says close your eyes for the next six months and just be aware that this will happen and it will come back. Now the other thing that you've got to understand is if somebody is in that position and they are dealing with an advisor like Gloven and local, pick up the phone and phone your advisor and they're going to tell you exactly what I've told you, which is don't panic, stay the course, don't pull all your money out.

And there's a secondary thing. If you've been invested for a long time, so let's say you're putting money away five years ago and you put in $100,000 and it's now worth $200,000 for example. And from $200,000 and it's gone back to $150,000. If you withdraw it, you're also entering into a capital gains tax situation. So rather just leave it invested, especially if you don't need it, if it's long term money that you're putting away for children's education, that comes up, leave it. The markets will recover and when they recover, you'll make it back. Okay, well I mean I'm sitting with a very similar situation. My mom is in her 70s and number one, her advice is she hasn't even heard from, which I think is pretty poor, but secondly she's going, "What do I do? What do I do? Do I take my money out?" I mean now suddenly it's money is lost, I can't do this, I can't do that. And I, with my very limited knowledge, I said to her, "Just relax for now. Let's wait and see when the water is clear." So thank you for that. That's great advice guys. Somebody else has said here, Michael, that they've been getting communications from your offices about signing a CAT II mandate. Why should I give you power over my investments?

Is that not a bit risky? Let's start off with what is a CAT II mandate. Okay, in our industry we have a number of licenses. License level one, it's a general advisor who can give advice. But if he wants to make any changes on your investments, he has to contact you. You then have to authorize it in writing. And that often takes a week or two, you send an email, it gets lost, he answers you. That's license one, category one. Category two is a limited number of advisors have earned the right to amend a client's investments without having to ask them. A client signs a mandate and in essence that document says, "I trust you, change anything you like at any time," as long as it is in my name and not in your name, please. That's a joke. So our company has a category to mandate. So as I outlined earlier, a month ago at a press of a button, all of our clients' portfolios, we could make a lot more risk averse. Category one advisor who probably looks after your mom doesn't have that license. And if he had, he could have amended her a while ago. Okay, but then that would make sense to me because in times like this, I mean, this is what you guys do for a living, you've got your fingers on the pulse, I want you to make decisions on my behalf.

Prompto, exactly. Okay, that makes some sense. So in terms of risk, I mean, obviously to get this license, you've got to have a fairly decent track record. We have to write five online exams and then we have to write another open book exam. That open book exam I must have spent starting 20 hours in order to pass it, you have to get a minimum pass rate of 65%, I'm not going to say what I got, but I passed. I know others who have written it often and they haven't passed. So it is extremely onerous in order to have that license. Also for a period of three years, a person that has that license has to every action you make oversee so that no errors can be made because the responsibility on an independent financial advisor with a category two license is immense and a real honor of trust. Okay, I've got it. It is What's Involved, proudly brought to you by Global and Local Investment Advisors. We'll be back in just a bit. A couple of questions, lots and lots of questions coming in so guys, if you don't mind, we might go a little bit off the beat and talk about some general things that people are concerned with. Perfect. Right here, we are back. It is Mix 93.8. What's Involved, proudly brought to you by Global and Local Investment Advisors.

Just before the break, we said that we were going to come back and talk about some other things because people are concerned, everybody's concerned rightfully so. Guys, I don't know if this is entirely in your wheelhouse, but let's give it a bash. See what you guys can say. Moro, lots of income policies. Is that something that would be covered for coronavirus? Okay, so lots of income policies are, well, there's two different types. There's one that, a lot of income cover, let's call it, is part of people's employee benefits, so that's the benefits they get from the company at work. And then you can also take it out privately in your own policy. And there's two different kinds of benefits, you either get a lump sum benefit or you get a loss of income, which pays you up to 75% or in some cases up to 100% of the income you're earning before you lost the income. Now, typically these cover disability. So disability is the inability to work. And if coronavirus, Michael, what do you say, would that be covered? I've actually had a number of emails from various life companies over the last week. And it is a classified illness and most companies, if you get the illness or you have a family member that has the illness and you are forced to remain at your house, you do have cover.

If you are sick, you also do have cover. Now I have only had this from a couple of life companies. So if I would recommend to the listeners, contact your head advisors and ask them to contact your individual underwriter and ask them, are you covered and in what situations? Sound advice. One of the things, and I'm bringing this home again in terms of family wise, my sister works for a company that supplies food for the airline. So obviously that's not happening now. She said to me, obviously after this 21 day lockdown, apparently they may be closed for up to three months, if not longer. So and then they're talking obviously retrenchment. Now, if we get retrenched, because I imagine there's going to be retrenchments, what sort of options do you have with your provident, your pension fund? Do you have options? Are we going to go with for this one? Moro, Michael, Michael, let's stick with you for the time being. OK, so if your company says, I'm terribly sorry, we've got no income, you have to go. By law, for every year you have work, they have to give you income a week. That's if they have money, number one. Number two, if you are retrenched, you can claim UIF for up to eight months. That's number two.

Number three, if you have a company, pension or provident fund, your initial instinct would be I need the money, I can't cash it in. If you cash it in, a large portion of it will be taxed and that tax you can never get back. If you enter it into a preserve pension fund, you have access on it at any time there after, less tax. You can have out a rent or you can have out all of it. If you have to have money up front, when you transfer your pension, provident fund into a preservation fund, the first 25,000 rand, you can access tax free. The balance you would then enter into a preservation fund, if you have done that, you cannot access it until age 55. If you are over age 55 and you have a pension or provident fund and you are retrenched, your options are to have out a third of that fund as cash up to 500,000 tax free. The balance you would enter into a living annuity or a fixed annuity and off that, you can have a monthly pension which is taxable. Can I add something to that, David? Sure, absolutely. If you are retrenched, the same rule applies to when you have resigned. What Michael outlined, first of all, for the very provident and pension funds, if you resign the same rules apply, but also have a look at your group life cover.

Your group life cover, you can normally continue it on your own without needing to have a medical normally. If you want to and you get retrenched and you want to hang on to the life cover, you can. You would just have to pay the premiums yourself and that would depend on how much cover and who the underwriter is and so on. Okay, that makes good sense as well. Nora as well, I mean, this I think is such a critical question. When we come back, we're going to chat about that. We might actually run over today if you guys are okay with that because I think there's so many things that people want to ask and they want to know about. With your permission, if we do run over a little bit, are you okay with that? Yeah. No problem. Absolutely, okay. I thought you were going to say, no way there, Michael. The issue is I'm in my house right now and I don't have much else to do, so it's great. As on most of us, as on most of us, it is MIX 93.8, what's involved, proudly brought to you by Global and Local Investments. When we come back, I want to ask about businesses. Right, and we're back. It is MIX 93.8, proudly brought to you by Global and Local Investment Advisors. This is a big concern, gentlemen.

Small businesses, medium businesses, we are sitting looking at this for our own business because when this whole thing hit, we make money a couple of ways. One of the ways is we do training. My fiancé does all of the Microsoft-based training and I do sales-based training, everything was canceled. Bang. One, two, three, there you go. All your projected income on that side was done. We're fortunate enough, we do a lot of stuff as well in the digital space. She does e-learning development, so we've got some income coming in and fingers crossed we'll be able to continue with that, but if your company is going to go under, what advice can you give to people to survive a bit longer, specifically company owners, because I know a bunch of people, a bunch of friends, a bunch of the listeners are really, they're staring the end of their companies in the field. What do we do? First thing is be honest. Be honest to the people that you deal with, your staff, your suppliers, your bankers. Turn around to them, let them know what's happening. That would be the first thing. The other thing is if you have company loans, talk to those loan providers. Say to them, listen, it's going to take us a bit longer to pay you back.

Michael, your side, what comes to mind? I would contact my landlord and say I have been your tenant for the last five years, I haven't ever missed a payment. Can I please for the next couple of months make a plan with you? I haven't got the funds now, but when things get back to normal, I will make a plan and every month pay a bit extra, but in order to survive, I need a gap and if you give me a gap, it will help you also survive. For workers, the government's UIF fund is offering some amazing benefits for people that are at home and their companies are not giving them an income. You can apply at UIF now, I think for a maximum period of 90 days, they will cover a portion of your income. The banks also, I know for one, EBSA is offering an option now, if your various payments are up to date, they will give you a holiday of 90 days. There is obviously on that, be very certain of the fine prints, but they are offering it. Also, those company owners, as Maura said, be honest with your workers, tell them I'm terribly sorry, the factory is closed. I can only afford to, for the next month, pay you half. If I am forced to pay your whole income, the company will not survive, but if I pay you half once this is over, we can probably get back to normal quickly.

Third, analyze your fixed costs versus costs which are adjustable. Set your offices all of the electrical appliances, are they off, the geezer, this, that, have you a leaking pipe outside, is the water off, where are their costs right now you can cut and cut them to the bone. You don't need lights on in the boardroom when there isn't a meeting going on. Sound advice there. The other thing that I've been asked as well is, for those people that are sitting with bonds now, what about bond repayments? That I think is a sizeable chunk of a lot of people's income. David, can I go back to the previous question quickly, there's been a couple of South African billionaires that provided access to money. The Rupert Foundation for one, the Nikki Oppenheimer and his sister Patrice Mutsepe, they all work in different ways, but there is opportunity for people to have some relief by approaching this. I think there's also a trust that's been opened by government that is able to help as well. In this particular time, there's quite a couple of avenues for people to look for relief. Be they employers, companies, general public, I'm not sure, but each one of them works differently. The listeners out there would have to just assess that and just do some research on it.

Let me answer that question. If you can't pay your bond, I think I answered that earlier, that banks want your money, they want you as a client. If you have a bond on a house that's normally over 20 years, under a company property, it's normally over 10 years without you, the banks will not survive. It isn't an issue for them to actually add on a couple of months extra, so it's for them, as long as it's at the end of 20 years or 10 years, they get their money plus interest. If you approach your bank's hat in the hand and say, "I've been a good pay off forever, I am in a situation, can I only pay from August?" They will probably say yes, but ask tomorrow morning at eight o'clock, don't wait. I think that's the most important thing that you guys are saying is communication is key and don't default and then go to them and go, "Whoops, sorry." Yeah. Exactly. Maura, did you have something to add there? If the bank gives you a couple of months holiday from paying your bond, be aware that in most cases, the interest will continue to melt, so you don't have to pay them, but they're going to charge you interest, so when you start paying them back, the repayment amount, the installment might be a bit higher than it has been.

But I suppose at least we'll kind of get through. A couple more questions that I want to ask you guys, so when we come back, we'll be continuing with the questions. As I said, we might be running over a little bit in this particular episode, but hey, I think it's worthwhile chatting about it is what's involved, proudly brought to you by Global and Local Investment Advisors. And we're back. Mix 93.8, some legendary radio for you. What's Involved, proudly brought to you by Global and Local Investment Advisors. Gentlemen, I know you don't have crystal balls, but obviously, you've been monitoring the situation very, very carefully. A lot of people are asking, 21 days, is it going to end at 21 days, or do you think we should start preparing ourselves for a bit of a longer lockdown? Maura. Okay. I'll take the hot potato and throw it directly at Maura. Okay. All right. So let me tell you, I've been doing a bit of research, so what I've done is I've checked the COVID-19 reported cases in South Africa, since patient one was reported. And so far, it looks like that the number of reported cases per day is starting to flatten. So that curve is starting to flatten. Now, what I don't know is how much we've been testing.

So it could be as a result of slower testing that results in slower increases in numbers, or the fact that numbers are actually starting to slow down. The other thing that I've been tracking is those number of cases versus Italy. And what I've done is I've ignored the dates and said, "Well, when Italy reported their first case, that was day one for them. When we reported our first case, it was day one for us." And if you look at the trajectory of Italy versus South Africa, they were way ahead of us, and they were in the 6,000 or 7,000 reported cases, and we're sitting at about just under 1,400 at the moment. So essentially, if you look at that, we're doing a lot better than them. Is the 21-day lockdown period going to be enough? I don't know. So it could be, but it could also be extended in that maybe just to make sure that we get this one properly, government ... Actually, I'm going to rephrase it. I actually think we're going to be extended by at least two weeks. Yeah, I must be honest. My feeling is that we're looking at an extension. I'm just also just looking around and chatting to a couple of people, and it's not going to be easy. It's not going to be fun, but it's going to be necessary.

Look, if I can add on that, that's all very well and fine, but our problem is a country like America, England, their governments have hugely larger assets than ours and can help the people. Those countries will, once this is all over, bounce up. South Africa's economy before the virus was on its knees. If the lockdown is made longer, hundreds of thousands of people could potentially lose their jobs and income, and the ultimate effect on the country could be disastrous. Yeah, it is indeed some troubling times. But there is some good news out there. I was reading yesterday or the day before that Eskim is using the lockdown period. They're an essential service. All their guys are working, all their technicians are working, and they're using this lockdown period to do much needed maintenance. We might have a little bit less load shedding going forward. Well, that is indeed good news. Some of the other good news, which I don't know how long it's going to be like this for, but the Reserve Bank cutting their interest rates, do you think they're going to do it again? What does that mean for somebody like me? Let me answer that. You asked me about the bonds earlier. Well, the interest rates now, the prime interest rate is 8,25%.

When I bought my first house in the 90s, my interest rate peaked at 26%. So now I'm paying 8.25 less 1%. So in essence, everybody on their bonds is paying less. South Africa could drop its interest rates an additional 2%. Generally, the Reserve Bank is conservative, and they only dropped the rates by 2,5%. But right now, the government is bringing out its full armory as much as it can. And I feel, if this gets worse within the month of April, they will have to drop interest by at least 1%. If they really want to help, they can easily drop the interest rates by 2%. Now that helps a lot if you have a debt on a car, a house. But if you are a pensioner that has all the assets in the bank, and they are accessing their interest every month, that means their interest is less, and their income is less. So it is a real double edged sword. I'm actually saying, and I don't have any answers. I wish we could. We've seen during this time, we've seen I think both the best and the worst of South Africa. I do hope that the best does prevail. Before you go though, guys, and Moro, you can give us something, maybe a little bit of liberty here. You've been and you are an investment advisor in this drama.

You asked both of you guys, but we'll start with Moro. You guys must have aged about 20 years in this period. How do you keep saying, have you got a routine? What do you guys do? We drink a lot of whiskey, copious bottles of the stuff. The only thing we can do is, what I do is I tend to look up, take into consideration what's going on around us, devise a strategy for our clients. This is why we're here. This is why we do what we do. On the personal side, working from home, it's very important to keep a discipline. Before we went into lockdown, before we told all our staff to go work from home, Michael called everyone together and said, "Right, this is what you have to do." You start work at normal time. At distance. Yeah. You get dressed in the morning as if you're going to work, you sit down at your desk, wherever it is that you're working from home, you work, you take a little break for lunch like you would normally. It's all about keeping the pace going and yes, watch what's happening in the news and all that, but also not too much, and just carrying on. You can't let this period rule your life. Look at the bright side. If I look at it, my wife and I were talking last night, she was saying, "It's nice to have you here." Even though you are at the desk working, your presence is in the house.

I'm not at the office most of the day. There's a lot of that stuff that's going on. I think everybody who's in lockdown at the moment and is working from home, don't start working in your pajamas. Actually, get up, brush your teeth, have breakfast, sit down in the normal time. The other thing is find ways to exercise while you're at the house. You may not be able to ride your bike. You might not be able to jog or go for a walk or take the dog for a walk or go to the gym, but find ways to keep the body moving because that also releases those endorphins, those feel-good improvements. Yeah, and it combats stress as well, yeah. If I can add in there, have a fixed routine, laugh as much as you can, phone a mate every day, encourage everybody that this will pass, this will pass. Think of the world at war, we at war, the war's end. I have aged a lot, but this is why Mara and I are in this industry now because at its darkest we give hope because things will get better. I think that is so important, hope and faith and belief that it's going to get better. Of course it will. Talk to your elderly people. If you think about it, those are the people that are most vulnerable to this disease and by and large those ones that are in retirement homes have been completely isolated from anybody and everything and these are the people that yearn for contact with their family, contact with their friends.

Pick up the phone, call your parents if they are still around, call your aunt and uncle that are elderly. Just say hi, even though you can't go and visit them, just say hi. Yeah. Gentlemen, I think we should wrap up now, but just to confirm, you guys and global and local investment advisors are working as normal, so business is normal, although it's from remote locations, if people want to get hold of you, if they want to get hold of you, if they want to talk to you, if somebody's been listening to this and they go, "Oh, I need to ask questions," you're up for that? We are. Yep. Okay. And I can call us on our normal number. Okay. Normal number as well and then obviously the email info@globallocal.co.za, that's global local, so two Ls in there, G-L-O-B-A-L-L-O-C-A-L, globallocal.co.za, info@globallocal.co.za. And another little bit of light, I believe, at the end of the tunnel, is we're going to be chatting to you guys again next month. Yep. We are and I promise all listeners, it will be a much happier show. Wonderful, wonderful stuff. Gentlemen, thank you so much and great chatting to you. As always, we look forward to our next chat. Thanks, David. Thank you so much. Good evening. Cheerio.

Good evening, everybody.