🚨 February's Mixed Signals: Are We Missing Something Big?

Welcome to this month’s edition of our newsletter! As we navigate through a landscape filled with market fluctuations and tax season deadlines, it’s essential to stay informed and proactive.

🌟 Here’s what we have in store for you:

• Market Insights: Why February's signals might not align with the headlines.

• Tax Strategies: Three actionable tax moves that could benefit you now.

• Hidden Opportunities: Discover the 73% of SA investors who are missing out.

• Portfolio Tips: A simple shift you can make before month-end.

But first, a message from our CEO, Travys Wilkins:

Tax Preparedness | A Message from Our CEO

 🎯 Three Market Opportunities

1. Current Market Update: The Rand's Strengthening Trend

What's Really Happening: While everyone's focused on tax deadlines, the Rand quietly strengthened which creates a rare offshore buying opportunity. As of February 1, 2026, the South African Rand has surged to approximately R16.14 per US Dollar, marking a significant appreciation from previous levels of R18.00 - R19.00.

The Signal: A rapid appreciation of 2.35% to 2.54% against the USD has been observed, providing local investors with a favorable entry point for offshore investments.

The Move: Now is an opportune time to consider diversifying into offshore assets as your Rands stretch further. If you're looking to invest in international markets, the current exchange rate offers a strategic advantage.

2. Navigating Tax Efficiency in 2026

February Tax Considerations: As we enter the final month of the tax year, it's essential for investors to consider strategies that enhance tax efficiency without offering specific investment advice.

The Insight: With the end of the tax year approaching, individuals should review their investment portfolios for potential tax implications. This includes understanding how capital gains tax (CGT) can affect returns and considering tax-efficient investment vehicles that may help to mitigate tax liabilities.

The Nugget: Engaging with a tax professional can provide insights into available deductions, credits, and strategies tailored to individual circumstances, ensuring that investors make the most of their financial situations as the tax deadline approaches.

3. Time-Sensitive Tax Strategies: Utilize Your Annual Exemption

The Strategy: Each individual is allowed an annual capital gains tax exemption of R40,000. This is a perfect time to review your portfolio and consider realizing gains on investments that have appreciated. By selling off some profitable assets before the tax year closes, you can utilize your exemption effectively.

The Actionable Step: If you have investments that have performed well, consider selling enough to realize gains up to your R40,000 exemption limit. This way, you can enjoy the profit without incurring any capital gains tax. Conversely, if you have underperforming investments, you can sell them to offset any realized gains, minimizing your tax liability.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

⚠️ Two Reality Checks

1. RA Contribution

Everyone’s Saying: “Max out your RA by February 28th.”

The Reality: A Retirement Annuity (RA) is not just about locking money away for retirement. Its real power lies in the tax deduction it creates today. When used correctly, an RA can actually increase your monthly cash flow, without reducing your standard of living.

The Strategy:
RA contributions reduce your taxable income. This often results in lower PAYE each month or a tax refund. Instead of letting those tax savings disappear into everyday spending, you can intentionally redirect them into a Tax-Free Savings Account (TFSA). You are not spending more, you are simply redirecting money SARS would have taken.

The Outcome:
You end up with two powerful benefits working together:

• Disciplined, long-term retirement saving through your RA

• Flexible, fully tax-free savings in a TFSA

• No increase in monthly financial strain

• Improved liquidity alongside retirement security

Action:
Use your RA primarily as a tax-efficiency tool, not in isolation. Capture the tax saving it creates and immediately channel it into a TFSA. This combination builds long-term wealth, preserves flexibility, and maximises the value of every rand you earn.

2. The Offshore Obsession

The Hype: "Get your money offshore before the Rand crashes!"

The Facts: South Africa's top 40 shares already provide around 70% offshore exposure through companies like Naspers, Richemont, and Anglo American. You're effectively paying forex spreads for exposure you already possess.

The Positive Shift: Recently, South Africa has been removed from the grey list, which enhances the country’s credibility and can improve foreign investment flows. This development signals a more stable economic environment and could strengthen the Rand, making local investments more attractive.

The Better Play: Local shares are currently trading at 12x earnings compared to 25x for their US equivalents. Even if the Rand weakens by 10%, you’re still better off investing in quality local companies.

The Insight: With the improved outlook for South Africa, focus on diversifying within your local market before rushing to offshore investments. This strategy capitalizes on undervalued local assets while minimizing potential currency risks, especially in a recovering economic landscape.

🚀 One Action

The “February Reset Strategy”

What's Happening: As markets position for potential rate cuts and inflation concerns linger, February presents a prime opportunity for investors to reassess and realign their portfolios for maximum tax efficiency.

Your Move:

1. Week 1: Lock in your Retirement Annuity (RA) contributions to take full advantage of tax deductions while they remain available.

2. Week 2: Rebalance your portfolio to reduce cash holdings and increase exposure to undervalued local assets, capitalizing on the improved economic outlook post-grey list.

3. Week 3: Complete any offshore transfers at current favorable exchange rates, ensuring you’re not overexposed to currency risks.

4. Week 4: Finalize your RA/Tax-Free Savings Account (TFSA) top-ups to maximize your tax efficiency before the tax year ends.

The Contrarian Angle: While many are preoccupied with tax deadlines, savvy investors are positioning themselves for the upcoming post-tax season rally. Historically, the March-May period has been strong for South African markets.

Risk Check: Avoid chasing FOMO (Fear of Missing Out). Stick to your investment strategy while optimizing the timing and structure of your actions.

The Key Difference: Successful investors act on the right information at the right time. Now is the moment to take decisive steps toward enhancing your financial future!

Take the Next Step Don't know your risk profile? Discover if offshore investing matches your goals with our free 3-minute assessment: Find Your Finimal.

Your money matters. Make it count.

The FinMeUp Team

Your money matters. Make it count.