3 ways to make better financial decisions

It’s easy to ignore these external influences until you have to face tough decisions about managing your funds because these effects are now hitting closer to home.

It’s totally natural to fear losing money in the current environment, however it’s how you respond that will determine the outcome. The one reaction you definitely want to avoid is making rash financial decisions, which is easy to do if your judgement is clouded by fear.

We therefore suggest that you speak to a financial planner or expert who can guide you through the decision-making process. An experienced, impartial viewpoint can be a huge help in getting a better perspective on your position, and especially your options.

The most important outcome is that you choose a strategy or solution that will enhance your wealth rather than hinder it.

Here are three ways you can improve your financial decision-making, even in volatile times.

1. Adapt to stay relevant

Whether you’re taking your first steps in saving for the future, or already have some savings that you want to add to, it helps to have confidence in your decision.

That confidence comes from your faith in the institution you bank or save with, as well as the product and how well that aligns with your financial goals.

For instance, with interest rates expected to begin falling in 2024 you could lock in a higher rate of return now on longer-term fixed deposits or notice accounts. These accounts offer a fixed interest rate, which means you’ll continue to earn this higher rate for the duration of your deposit term, even if inflation and interest rates fall.

Another way you could have adapted through the recent higher inflation cycle would have been to move out of cash and into investments. This decision is a bit of a double-edged sword: on the one hand the returns from listed equities are traditionally higher than cash, which could combat the higher cost of living; however, the potential for higher returns also come with the potential for losses if market prices fall below your buying price.

While it’s important to respond appropriately to changing market and economic conditions, be wary of jumping in and out of savings products or investments. Rather, assess your options to find those that are most appropriate for today as well as the future.

This is certainly no mean feat. Which is why Standard Bank asset managers and analysts have devised pre-packaged deposits that take advantage of current market conditions to deliver more predictable returns. The nature and composition of these Structured Products are therefore adapted to benefit from emerging trends and future outcomes.

New Structured Products are released at predetermined times throughout the year, giving you the opportunity to commit a deposit for a fixed term that is typically three to five years. The composition of these products usually differs to reflect the views of the investment managers.

2. You don’t need to be an expert

Another key benefit of solutions like Structured Products is that you benefit from the expertise of the asset managers compiling these opportunities.

They draw on their skill and expertise to create products that could benefit from current and expected market performance. This means you can make your deposit confident in the knowledge that expert money managers have made informed decisions on your behalf.

In addition to the ease of access, any further decision-making is removed because Structured Products are fixed-term deposits that usually span three to five years.

Being locked in for a fixed term has big benefits over instant access accounts because you’re not tempted to dip into your savings. Also, longer or fixed term products typically offer better interest rates over instant-access accounts.

3. Diversify to reduce risk

The final way you can improve your financial decision-making is to place diversification at the centre of your financial plan.

The basic premise is that you want to spread your risk in a balanced manner so that you’re not over-exposed to any one stock, market, asset class or geographical region. With your risk spread effectively, the theory is that you can avoid outright losses if one aspect of your portfolio underperforms because it will be balanced out by another that is stable or peaking.

As a client with a Standard Bank Offshore bank account, you can apply these diversification tactics in a number of different ways. The easiest is currency diversification by holding funds in US dollars, pound sterling or euros. You can then also save in different currencies, which in the case of Structured Products give you the added benefit of exposure to different markets.

This means that in addition to a currency hedge, your deposit also has geographical diversification built in that further spreads your risk.

These unique characteristics of Structured Products mean you have plenty of options to choose from when fine-tuning your financial plan, no matter the state of the market.

How to make a Structured Product deposit

If you’re an existing Standard Bank Offshore client, you can contact your Relationship Manager or financial advisor to make the necessary arrangements before the closing date. If you don’t have any accounts with Standard Bank Offshore, please contact the nearest Standard Bank office in your country, or contact our Isle of Man office directly: