2025 was a great example of why, as a South African, you should never have 100% of your investments offshore.

It was a sensational year for local assets, while the double digit appreciation of the Rand (ZAR) versus the US Dollar (USD) reduced returns from locally held offshore investments.

You may remember

If you were one of those South African’s reading Magnus Heystek’s sell everything, pay the tax and go 100% offshore a few years ago, this would be a good opportunity to recognise the value in a more balanced approach.

When you live in SA and the majority of your costs (liabilities) are in SA, you cannot afford to have all your money offshore for this exact reason. 

I would go one step further. Mentally store this information for the next time someone urges you to go 100% offshore. (there will be a next time)

Even just one year ago it was easier to believe the Rand would trade at 25 to the US Dollar than to think 15 was possible……  how things change.

The past returns of an asset are the returns
you are not going to enjoy.

A comparison between the 1 year returns and the average return over the last 10 years, can provide some insight.

The real question remains what comes next?

Asset Class Returns – 1 & 10 Years to end December 2025

Looking at average returns over longer time periods suggest that returns over the next few years will probably not match 2025.

This is not the same as saying 2026 will see a major sell-off. 

Fact is:

– Strong recent performance makes assets more expensive.
– Future returns are determined by the price you pay for the assets you own.
– Ergo periods of sustained strong performance are likely to be followed by more tepid returns.

You know what helps

Managing your expectations around returns and accepting that occasional sell-offs or downturns are what inevitably bring us closer to long-term average returns over time is important. 

Sell-off’s are a feature of investing, not a bug that can be fixed or avoided altogether. 

Matching your investment strategy to what you are trying to achieve, knowing you can’t predict future returns is why you build a diversified portfolio.

100% Offshore is never the right option if you are looking at your overall financial position.