Real Estate Investor Magazine South Africa Real Estate Investor Magazine - August 2017 | Page 55

But, following the actual event, the currency turned
and strengthened for the next 6 months. Although it
then pushed higher than Downgrade levels in late 2015,
this was short lived, and the Ruble has strengthened
since early 2016 to back below pre-Junk levels.
Still not convinced? Let’s take a look at
Brazil…
Similarly, Brazil weakened consistently for well over a
year leading up to being downgraded in late 2015/early
2016.
And what happened once the last of the 3 rating
agencies pulled the plug? The Real strengthened - and
continued to do so for the next year! No economist
would have been able to explain - or predict this! And
yet, our Elliott Wave model, which uses the patterns
of mass psychology in the market to predict future
movement, had seen this coming.
Skeptical? I don’t blame you if you are, as this model’s
uncanny ability to forecast reactions to major shock
events still amazes me after 12 years of following it.
Here was our outlook on the Dollar/Rand for next
few weeks published on 3 April 2017 (with the Rand
at 13.40), which anticipated a move up into the 13.64
to 14.15 area before topping out and falling…which
it duly did by hitting 13.9550 a week later, before
reversing sharply.
Pretty amazing stuff, when market sentiment at face
value suggested the opposite!
Ensure that you have an objective, scientific based
view of the market that enables you to make informed
and objective decisions, especially at times of extreme
volatility, when panic decisions tend to take over.
For more info on the Rand and the way forward from
here, visit www.forexforecasts.co.za/go/weeklyreview
James Paynter is the Director and Head Analyst at
Dynamic Outcomes Inc.
SO, WHAT CAN WE LEARN
FROM THIS?
More often than not, the market will do the opposite to
what common sense would tell you.
Test out these theories based on Economics 101 to see
whether they have any historical validity (you will be
surprised at what you find)
When you are thinking to yourself, “Can the news get
any worse than this for the Rand?” … the answer is
more often than not “No, it won’t” (even when everyone
around you is feeling the opposite).
www.reimag.co.za
AUGUST 2017 SA Real Estate Investor
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