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Covid-19 is a Black Swan Event

There is hardly a person on the planet who has not been affected by Covid-19 in some way. While people are acutely aware of the toll on the global economy, one cannot compare it to other financial crises of the past. Covid-19 is a black swan event:  an event that comes as a surprise, has a major effect, and is often inappropriately rationalised after the fact with the benefit of hindsight (Wikipedia).

The period since the 1980s has been characterised by four major financial crises, the worst of which was the global financial crisis of 2007-2008 which resulted in South Africa going into recession for the first time in 19 years. The global financial crisis sent shock waves across the world – this was an economic crisis that warranted the appropriate response and change in economic policy. By contrast Covid-19 is a health crisis, and the economic shock is a result of the almost-global lockdown and slowing down of industries. Unlike the global financial crisis of 2008, economics is not the driver here- Covid-19 has not caused a downshift in the global economy, our collective response to it has.

We do not have a choice about how we actively and physically respond to the disease, that is in the hands of our policy makers and Government, so we have no choice but to ride it out. Pre-Covid some of us would have used the weaker global and local stock market as the impetus for our financial decision, with many investors looking for ways to minimise their personal risk. Part of minimising risk looks like minimising share portfolios and investing capital into real, tangible assets with much less volatility.

Time and time again, property has proven a stable bet with its value tangibly realised and many ways to extract value from your asset.

Lush is an agile asset-  buy to use, buy to let or resell after transfer, and this gives owners the opportunity to see a return on their investment in a number of ways. Our owners are both end-users and investor-buyers , so as a result we have allowed for short-term letting at Lush, (we are one of the few) – owners can enjoy the dual purpose of their furnished apartment: use it for own use or to live in and then earn rental income by letting the unit during high season. “

– Clifton Smithers, Co-developer of Lush

Growth forecasts for areas like greater Ballito in KZN are staggering and with so much greenfield development happening in the area, the region is fast becoming SA’s most investable province

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