The Navigator is Anchor’s quarterly review of the major themes affecting markets and gives an overview of our current strategy and asset allocati document. The Navigator provides our clients with insight into Anchor’s thoughts on various asset classes and our near-term market outlook.

The renowned financial historian, economist, and investor Peter Bernstein observed that “The fundamental law of investing is the uncertainty of the fut particularly relevant during US President Donald Trump’s second term, and especially so in the wake of the US/Israel strikes on Iran in 1Q26 – an even case scenarios.

In this environment, investment outcomes have been shaped less by forecasts and more by portfolio construction, discipline during p and the ability to adapt to changing circumstances. Our point is that it is neither practical nor effective to construct portfolios in anticipation of World War III or other highly improbable scenarios. Nor can that considers all possible outcomes.

Instead, portfolios should be built around clearly defined risk tolerances, long-term objectives and robust diversi investing requires the patience to adhere to this framework, while making measured adjustments as risks and opportunities evolve. In this context, many investors keep dry powder (cash available for unexpected opportunities) as part of their portfolio construction.

During the recent deployed some of that dry powder within Anchor Capital’s portfolios, nibbling at assets that have become unexpectedly cheap. These assets may lose term, but for longer time horizons, we have bought good assets at prices that might not otherwise have been available. Diversification across asset classes has also proven beneficial.

We note that investors with exposure to alternatives (including hedge funds, protected physical property, etc.) as a small part of their portfolio construction will have fared better through the past quarter than many who did not. We have, f alternative assets with better defensive characteristics during volatile periods. This is a new asset class for most South Africans, even though it comm the investment wallet for family offices abroad.

We expect most domestic investors will benefit by increasing their exposure to this asset class over tim down through the rate-cutting cycle, we believe that the attractiveness of alternatives will increase. Anchor Capital is a proponent of balanced portfolios and diversified risks. We maintain that it is crucial for investors to have a long-term plan for wha their investments, and we think that the year ahead will likely see them move towards their eventual desired outcome.

In our view, this is an excellent t in your portfolio. We advocate that a healthy portion of your investment portfolio should be offshore to leverage diverse opportunities and return profi specific risk. Finally, we maintain that a meaningful allocation to offshore assets remains essential. The current rand/US dollar exchange rate presents a reasonab portion of your portfolio.

Although we expect the rand to hover around these levels over time, we also find that investment opportunities abroad are co a broader opportunity set while mitigating domestic-specific risks.

The key to successfully managing your wealth is understandingManage the changes the world in which we live and adjusting (when necessary) your investm a boutique asset manager, we can more readily navigate these twists and turns of global developments. Our team of experienced investment profession