Diversification SA Political Uncertainty 
Uncertainty makes any investor nervous. When it comes to South Africa uncertainty is a certainty for investors. Two credit rating downgrades, mass protest action of hundreds of thousands of South African citizens last week and our economy is still digesting the aftermath. South Africa is officially junk status.
One would expect an immediate global sell off of bonds, equities, properties and a currency in free fall. However, the expected financial storm has not yet hit. The question is why? Many economists believe that investors are taking a wait and see approach especially the upcoming vote of no confidence and how the newly appointed finance minister will behave. Others believe that our markets have already priced in "junk status".
The long term effects of junk status are much more worrying. South Africa has a shrinking tax base many wealthy and young graduates are seeking opportunities abroad. Unemployment is rife at almost 45% of the population and the need to attract foreign investment is crucial to the future of the South African economy.
Our debt to GDP ratio is at almost 50% and this year the past finance minister had to increase the tax rate in the high income bracket to 45%. How is South Africa going to manage it's debt repayments going forward with debt now at a much higher price.
Zuma seems to be steering the South African economy aground and likely his careless actions will put South Africa into a recession. A recession will have dire consequences especially to the poor.
From an investor view point, diversification is key to riding out the storm ahead. My view remain overweight offshore assets and cash.
