Facing Investing Fears

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Facing Fears, Finding Value in Rising Rates

History shows big tech and cash-rich firms can thrive amid risk and rising bond yields, a lesson for South African investors today.

The Motley Fool podcast reminds us how Amazon, Google, and Meta faced seemingly dire risks early on—competition, monetization threats—and yet turned those challenges into growth engines. This experience offers perspective for investors wary of current AI fears or bond yield hikes. On the JSE, this translates into keeping an eye on financials like Standard Bank and FirstRand, which are cash-rich and stand to gain from rising rates improving their net interest margins. In contrast, growth-dependent sectors or stocks like Naspers and Prosus may feel the pinch as funding costs rise and global tech sentiment cools. Meanwhile, watch the USD/ZAR closely: a stronger dollar could squeeze importers and fuel inflation, complicating monetary policy and corporate earnings. Investors should trim outsized, speculative growth positions while considering quality banks and insurers for income and stability. The risk? A sudden rand rally or slower global rate hikes could upend these dynamics and favor growth again. this is just our opinion and not financial advice