Majority of local investors miss out on strong stock market recovery
By Opinion
Share
The local Collective Investment Schemes (CIS) industry reported net inflows of R13.69 billion in the first three months of this year, taking to R203.83 billion the total net inflows for the 12 months to the end of March 2021.
The CIS industry statistics for the quarter and year ended March 2021, released today by the Association for Savings and Investment South Africa (ASISA), show that while net inflows in the first quarter of this year tapered off from last year’s high levels, the total annual net inflows of R203.83 billion are the highest ever achieved by the local CIS industry over a rolling 12 month period.
nine months you ve seen better news across the board in housing because inventory is tight. it s actually at 50-year lows, inventory is down 25%. when you constrain or choke off supplies, prices rise. incomes are stagnant, unemployment is high and credit remains as tight as it was since lehman collapsed. inventory is so tight because maybe the spread between what they paid for their house and what it s still worth is too big. that s certainly part of it. not ready to sell yet. people with negative equity is a big part. the other part is people with low equity. people forget when you have a home and you want to sell, you become a buyer or a renter. rents are at very high levels. you want to buy, you have to qualify. maybe 10% down five years ago or ten years ago was fine. you sell it for break even get your 10% back, but you need 20%.
maybe the spread between what they paid for their house and what it s still worth is still too big. they re not ready to sell yet. people with negative equity is probably a big part. one in four mortgage holders have negative equity. but the other part is people with low equity. people forget that when you have a home and you want to sell, you become a buyer, or a renter. rents are at very high levels. you want to buy, you have to quali qualify. maybe 10% down five years ago or ten years ago was fine, you sell it for break even, you get your 10% back. but you need 20%. so if you re going to trade up, you re short. they re not under duress, they just can t sell, so they re going to wait. i want to talk about stocks. 15,000 on the dow this week. i mean, five years of a bull market, s&p 500 up 140% since march of 2009. do you think we still have room to grow here? i really do. everybody out there thinks they re too late to the game. typically the fifth year of a bull market, which w