Investment decisions in a changing South Africa from 1990 to 1999 (transition) : analysis of the decade of the 1990s

ENGLISH ABSTRACT: This study is an investment performance review covering the ten years from 1990 to 1999. To many investors the 1990s were a tough decade because of the political, economic and social changes, which caused investment uncertainty. The primary focus is to examine the implications of these changes during the 1990s on the investment strategies of South Africans. Furthermore, the aim is to provide insight into investment decision-making during the period of transition and transformation. The analyses specifically address the importance of the investment environment on portfolio construction and maintenance. The objective is to see how far the investors ventured in their efforts to 'beat" the South African share market under changing conditions. The structure of the portfolio was evaluated as well as the investor's preferences and beliefs during the period under review. It also looked at the investors' attitudes and philosophies. Effective portfolio management was important because changing conditions were becoming challenging. The investor's investment mix and the risk associated with each investment determined the effectiveness of managing the portfolio. Furthermore, this study examines the investors' objectives, constraints and strategies. In the final analysis, this study examines investment strategy and investment performance in retrospect. It presents a ten-year historical analysis of the South African environment which was affecting investment decisions. It was also found that investors were fulfilling their expectations, they were looking at medium and long-term investment opportunities. Furthermore, stock-picking was done with greater caution. The opening of global investment markets further enhanced the investment opportunities. Moreover the investors realised the importance of diversification in order to reduce risk. The investors will be presented with challenges and opportunities in the next decade (or century). Therefore this study also concludes with an assessment of possible future investment scenarios for the South African investors. Finally, investment decision was interpreted against the political, economical, social and other changes that took place during the period of transition. The key to investment success was the investor's ability to manage the changing South African environment.