Have you ever missed out on doing something because you took too long to act? I have – in fact as recent as this weekend. Let me explain – every year tens of thousands of cyclists take on the London to Brighton bike ride in aid of the British Heart Foundation. A few friends have done it before and (they claim) the 54 mile ride is loads of fun so the current Mrs Smuts and I decided to give it a go. Applications opened on Sunday, the wife registered online and I was going to follow suit but… I was busy cooking a Sunday roast, then our guests showed up, then I had to (fill in the excuse of your choice).  

Bottom line is when I tried to register on Monday, all the spots were taken and I’m now on a waiting list. So I missed out - not because I didn’t know how to register or where to register but simply because I didn’t get off my butt and take any action. My reasons for not acting although justified seem trivial in hindsight. I could easily have made the time. I bet you have similar tales.

During my recent visit to SA I caught up with quite a few investors who first contacted me for help in early 2008 but who have still not purchased or even made arrangements for taking money offshore. 

A few who wanted to “wait and see” were very disappointed to learn that where last year we could still secure 85% mortgages we can now only manage 70-75%. For many this extra 10% that they will now need to put down make purchasing a UK property very difficult or even impossible.

Further more the exchange rate has gone from 13.6 in early 2008 to 14.7 at the time of writing. This translates into getting almost £11,000 less for your 2 million Rand. And here’s the thing – expectations are for the Rand to weaken further in the coming months.

Bank of America said in a research note dated February 17 that our current-account deficit of around 7% of gross domestic product "remains uncomfortably large," and predict that the Rand may lose more than 6% to a "trough" of R10,95 per dollar by September this year.

Rand Merchant Bank has a similar outlook claiming the Rand will hit 10.80 to the Dollar in the next few weeks. RMB currency strategist John Cairns said the negatives facing the Rand were simply becoming too much to handle. "We've been 'dancing near the door' for some time, eyeing the deteriorating positives and thinking it may be time to leave the party," said Cairns. "Well, now it's time to bolt."

Investec agrees saying that the slowing global demand for SA’s exports is also likely to weigh on the Rand as all of SA’s major trading partners are in or moving toward a recession. Their analysts put the Rand at 17.65 against the Pound by the end of 2010.

I’m still wishing people a happy New Year but we are already approaching the end of the 1^st quarter of 2009. Easter is around the corner and before you know it we will be back doing our last minute Christmas shopping wondering where the year went. Time is not your friend and I have never met anyone who has profits to show for “wait and see”.

If you realize the importance of hedging yourself against the weakening of the Rand, if you are serious about building an offshore portfolio and if you are in the fortunate position to be able to do so then I suggest you get off your butt and get going. At the very least get your SARS clearance and put what capital you can afford in an overseas account while the exchange rate is still favourable. I strongly believe that the next few months will present us with some of the greatest buying opportunities of the decade - but these will only be available to the few savvy investors who are in a position to act quickly.

Experience has taught me that no matter how deep a study you make, you really don't know what's going to happen until you do it. Don't let yourself be lulled into inaction.

Tomorrow may be another day – but it’s often the busiest day of the week.

Wishing you health, wealth and happiness,

Mike Smuts
Property investor and MD of Smuts & Taylor.