How do you deal with a crazy world where reality TV stars become presidents, crooks become CEOs, the climate is heating up and banks charge you interest on a fixed deposit? When so much is turned upside-down, how do you manage your money in the best way possible?

Information that provides basic common sense is not nearly as dramatic as a prediction about the end of the financial world. We are all genetically programmed to avoid danger and so we will naturally respond more emphatically to something that could threaten our wellbeing than something that might help us understand the world a bit better. Our genetic programming might work well in helping us avoid being eaten by lions, but we are terribly designed when it comes to making rational investment decisions that will help us in the long term.

Once you realise this, you can take steps to protect yourself from the hype so that you are able to make better decisions for your own benefit.

This starts with ignoring the noise created by fear mongers who are forever predicting the end of the financial world. As an example, in 2018 an old financial commentator started telling people to cash out of their investments in South Africa so that they could send all their money overseas.

If you had followed this hype, you would have lost out on the growth of the local stock market in 2019. The JSE jumped 12% in 2019 and the Rand grew stronger over the year. After a decade of terrible Emerging Market performance, I suspect that the 2020s could be the decade of emerging markets, which would not be helpful to those sending all their money to shares in the USA, which is at all-time highs!

Question the reasons for media hype

I have a concern that many commentators in the financial media are simply telling you what they need you to hear.

For example, there are quite a few international brokers who operate in South Africa. The only way they get paid, is when they convince South Africans to send their money overseas so that the money is invested in products offered by the international brokers.

I cannot think of any reason why these international brokers would tell you anything good about South Africa.

Another example is the South African commentator who sells property on offshore islands and also sells very expensive offshore unit trusts. Would you like to guess what he is saying about South African investments right now? Sadly, there are only a few financial journalists who see through this and can provide balanced views.

Chart your own course and don't be a follower

When making important decisions about your financial future, it is always best to make financial decisions that are based on your goals and needs. Don't make decisions based on what you read in the media.

One of the big decisions that all South African investors need to make, is how much of their capital is invested in SA and how much should be invested overseas. It is a really good idea to have a portion of your money overseas, but the amount should be determined by your own lifestyle objectives and not by the financial media.

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This is especially true when some commentators are clearly biased and self-serving in their commentary! When deciding how much to invest overseas, you should be influenced by where you plan to live in the future.

If you plan to live in SA, you need to keep a portion of your money here. In addition, if you have big expenses that need to be paid here e.g. private schooling, deposits for houses or cars, then you should keep some money in SA.

Your age and wealth are also big factors in this decision. If you are wealthy and have enough money to leave to the next generation of your family, you should have a significant portion of your capital overseas.

Wealthier investors need to plan for two or more lifetimes, and you don't know where the future generations will live. If you are older, you can keep more of your money in SA as you are probably going to spend the remainder of your life here whereas a young person might travel or live overseas.

The same factors can be used to determine how much you have in shares, property and cash. The beauty of a strategy based on your lifestyle objectives is that it allows you to be more rational and to have a longer-term focus. It also should help you to ignore the hype created by fear mongers who want to take profit from your fears.