Current Markets Situation

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Gendibal

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Hi

Need some advice/guidance here.

I haven't actively invested in the markets since about 2008 when I withdrew all my investments to buy a house. Now I've got some cash to play with (R100k) and was wondering:
1. Is it a good time to enter the market? Methinks yes because of the recent slide in share prices in some sectors (banking, heavy manufacturing) but I'd like your opinion.
2. Which shares would you recommend? I've been looking at Sasol, Standard Bank, Richemont
3. Alternatively, would it be better to buy Satrix Top40 and if so can you buy these (shares?) via Standard Bank Online Share trading?
4. Is Standard Bank the cheapest (read: lowest fees) way to enter the market?
5. Is it better to invest in companies directly or via unit trusts/indices? Do you still get dividends with unit trusts/indices? Although not dependant on dividends as income - want more capital growth.
6. Last one - Shares or futures? I've dabbled in futures before but didn't make much money, probably around 5% profit. But was working with small amounts.

Any information would be really helpful. Thanks in advance.
Gendibal.
 
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You can always buy treasury bonds in the meantime, until you decide what you want to do with the money.
 
I think it is a good time, though it depends what market you want. I am not big into shares, more into currency which has been extremely volatile lately. Always carries the risks that it does but if you know what you're doing there is money to be made.
 
If you're going to buy, do it now. What you should do, (unlike 90% of people) is to be willing to consider that 100k gone as you shouldn't have need for it in the next 3+ years. In a terrible metaphor: Investing is the opposite of sex, pull out too early and you're stuffed.
 
Gendibal said:
Hi

Need some advice/guidance here.

I haven't actively invested in the markets since about 2008 when I withdrew all my investments to buy a house. Now I've got some cash to play with (R100k) and was wondering:
1. Is it a good time to enter the market? Methinks yes because of the recent slide in share prices in some sectors (banking, heavy manufacturing) but I'd like your opinion.
2. Which shares would you recommend? I've been looking at Sasol, Standard Bank, Richemont
3. Alternatively, would it be better to buy Satrix Top40 and if so can you buy these (shares?) via Standard Bank Online Share trading?
4. Is Standard Bank the cheapest (read: lowest fees) way to enter the market?
5. Is it better to invest in companies directly or via unit trusts/indices? Do you still get dividends with unit trusts/indices? Although not dependant on dividends as income - want more capital growth.
6. Last one - Shares or futures? I've dabbled in futures before but didn't make much money, probably around 5% profit. But was working with small amounts.

Any information would be really helpful. Thanks in advance.
Gendibal.
Click to expand...

Let me quote some asset manager's comment I read this week:

"When you get up in the morning and have to throw up because markets are so bad you know its time to invest. I believe we have reached this point."

Put the money into shares now and don't look at it for a year.
 
Gendibal said:
Hi

Need some advice/guidance here.

I haven't actively invested in the markets since about 2008 when I withdrew all my investments to buy a house. Now I've got some cash to play with (R100k) and was wondering:
1. Is it a good time to enter the market? Methinks yes because of the recent slide in share prices in some sectors (banking, heavy manufacturing) but I'd like your opinion.
2. Which shares would you recommend? I've been looking at Sasol, Standard Bank, Richemont
3. Alternatively, would it be better to buy Satrix Top40 and if so can you buy these (shares?) via Standard Bank Online Share trading?
4. Is Standard Bank the cheapest (read: lowest fees) way to enter the market?
5. Is it better to invest in companies directly or via unit trusts/indices? Do you still get dividends with unit trusts/indices? Although not dependant on dividends as income - want more capital growth.
6. Last one - Shares or futures? I've dabbled in futures before but didn't make much money, probably around 5% profit. But was working with small amounts.

Any information would be really helpful. Thanks in advance.
Gendibal.
Click to expand...
My 2cents worth in same format you put qs

1) It can be a good time to enter markets and it can also be a good time to hold on to your money, cash maybe king for now as there's no clear direction where the markets are going. Slide in prices can be a good entry point but what if the price slides and doesn't pick up again? ask yourself that as well.
2) Well you need to first determine what type of investor are you, short or long term and how much beating can you take from Mr Market, if you investing long term SOL, WHL, SHP, might be good buys but it all depends on what type of companies you want and remember don't buy the share but the company, i.e. if you had all the money in the world would you buy out the company or not
3)Satrix 40 might be a good buy but I prefer direct so as to cut costs and transfer them to your Standard Bank OST a/c say in 6 months. Buying using the OST account might be a bit expensive.
4)By standard Bank I assume you mean Online Share Trading, I think it's the cheapest form of trading compared to others and remember that your costs should always be as little as possible
5)Unit trusts and ETFs are cheaper than investing directly in the JSE (and someone else with more experience handles your money saving you time to go fishing :D) and the distributions vary per fund you would have chosen. There's now unit trusts that track indices but the best is the Satrix.
6)I would say shares, futures are very risky as you might end up owing more than you put through. In futures chances of you losing your R100K are very high.

MHO
 
OMB - thanks. reading the thread now.
Also looked at govt bonds (thanks ice-cubes) but not too happy to lock my money in for 2yrs although this will probably happen on the stock market anyway.
Other guys - thanks for the advice.

Has anyone heard of www.moneymorning.co.za ? They also predict $5000/oz as predicted in the thread OMB linked to.

Also, do you guys deal through a broker or directly?
 
Depends on whether you can afford to lose R100k. I'd dump some of it into one of the Satrix portfolios TBH. Now would be a good time to invest it - just be sure that you're in it for the long haul, and don't panic when you see that you're losing a bit in the short term. Things will recover eventually.
 
If you enter the markets, you MUST diversify. NEVER put all your eggs in one basket. Use some of your money to buy futures, short a few contracts and buy long on other contracts. Put some of your money in unit trusts as well. Another thing is that chances are that we haven't reached the bottom of the market yet. NEVER use emotion when making investment decisions otherwise you WILL get burnt.
 
Sly21C said:
short a few contracts
Click to expand...

Right... and you really think the average person you are talking to here

a) knows what shorting is;
b) has a brokerage account which allows them to short; and
c) even qualifies to open an account which allows them to short?

stupid advice...

You also shouldn't recommend futures to people who possibly have no clue of what they are, how they work and what the risks are. Before you know it someone opens a leveraged position and loses their entire investment...

The rest:

Sly21C said:
If you enter the markets, you MUST diversify. Put some of your money in unit trusts as well. Another thing is that chances are that we haven't reached the bottom of the market yet. NEVER use emotion when making investment decisions otherwise you WILL get burnt.
Click to expand...

good advice
 
Seriously? Maybe I'm just holding all the charts upside-down... (Already checked that this isn't an old thread)

Like this chart.

Aside from shortly before the '08 crash I reckon this is pretty much the worst possible time to invest. Markets haven't crashed yet but are certainly starting to wobble.
 
HavocXphere said:
Seriously? Maybe I'm just holding all the charts upside-down... (Already checked that this isn't an old thread)

Like this chart.

Aside from shortly before the '08 crash I reckon this is pretty much the worst possible time to invest. Markets haven't crashed yet but are certainly starting to wobble.
Click to expand...

Nope. It is the best time to invest. But here is the trick. Buy only shares in companies that have a strong and robust plan for the future. We get bogged down by the finance side. Roic / PE / HEPS. ETC. Look at that, but also at the company fundamentals. It is a robust company. Do they have a good strategy? In the long term, you should get a good ROI
 
HavocXphere said:
Seriously? Maybe I'm just holding all the charts upside-down... (Already checked that this isn't an old thread)

Like this chart.

Aside from shortly before the '08 crash I reckon this is pretty much the worst possible time to invest. Markets haven't crashed yet but are certainly starting to wobble.
Click to expand...

Or you could be completely wrong and this is the best time as markets gave in due to fears but will turn bullish soon...

Sent from Android using Tapatalk
 
Your questions are valid, but I personally could write pages and pages on these questions you posted, however I'd like to know what are your goals, do you want to manage your portfolio passively or activly, do you want to manage it or do you want to give it to a broker, would you need the money and so on.

Futures or shares, that's a huge difference and risk. I think once you know the answers to those questions everything else will come into place, you'll know is it worth opening a Standard Bank online share account or any other company for that matter, I'd suggest meeting with a professional because there's just so much to your questions that could be discussed.
 
Gendibal said:
1. Is it a good time to enter the market? Methinks yes because of the recent slide in share prices in some sectors (banking, heavy manufacturing) but I'd like your opinion.
Click to expand...

How's your crystal ball doing? Seriously. Anyone who states that now is the time to buy is certainly missing the similarities between our current situation and 2008. Anyone who tells you it's not a good time to buy might also turn out to be a moron. The simple fact of the matter is that all market participants are split on the matter right now. Some believe that the major resources shares are extremely undervalued and therefore worth their weight in gold - Anglos as an example. However if the markets do move like they did in 2008, you'll be finding yourself on the wrong side of that trade very quickly...

Gendibal said:
2. Which shares would you recommend? I've been looking at Sasol, Standard Bank, Richemont
Click to expand...

I refuse point blank to outright recommend specific shares. What I can tell you is that if you are hell-bent on going the equities route, then resources are very undervalued right now. However that's not to say that they won't be coming off too...;)

Gendibal said:
3. Alternatively, would it be better to buy Satrix Top40 and if so can you buy these (shares?) via Standard Bank Online Share trading?
Click to expand...

1 - they're an exchange traded fund.
2 - ETFs are great when the market is on the up, however if the market moves in the wrong direction there is absolutely no stock-picking that can hedge against their downside. The other problem with ETFs is that in times of low liquidity they can trade at large premiums or discounts to their net asset value, which creates problems as an investor in a volatile market. Therefore you want to be careful what ETF you invest in. Satrix is good because the liquidity will always be there, however your costs are relatively high with ETFs and they do not pay dividends. The other issue with ETFs like the top40 is that most people invest in them for diversification, however all of the stocks in the top40 tend to move similarly so this diversification aspect is lost.

Gendibal said:
4. Is Standard Bank the cheapest (read: lowest fees) way to enter the market?
Click to expand...

Quite simply, no. There are multitudes of brokers out there on the market, however a cheap broker is not necessarily a good broker...;)

Gendibal said:
5. Is it better to invest in companies directly or via unit trusts/indices? Do you still get dividends with unit trusts/indices? Although not dependant on dividends as income - want more capital growth.
Click to expand...

If you want to take advantage of price action in a specific stock then it's always best to outright own that stock. Unit trusts are typically very long term investment vehicles if you want to realise a return. Capital growth versus dividend yield will determine your investment strategy, not whether to go into unit trusts or equities. Personally I prefer equities -you might differ. That's all dependant on how much risk you're willing to take on. Dividends and interest in unit trusts is dependant on the product you invest in - some pay them and others don't, although most don't. Not all companies pay dividends either when you invest in them...

Gendibal said:
6. Last one - Shares or futures? I've dabbled in futures before but didn't make much money, probably around 5% profit. But was working with small amounts.
Click to expand...

In my opinion, if you have to ask the question, then futures are not for you (right now). Investing in highly leveraged trading products requires an element of skill and knowledge that most average Joes do not possess - it really is as simple as that. If you'd like a quick overview of futures, then check out this post which was in response to a question about what futures really are - http://mybroadband.co.za/vb/showthr...on-the-forum?p=6632110&viewfull=1#post6632110
 
If you're going to hand over the cash to a professional, then the very next question you need to ask yourself is whether that professional is going to be a financial advisor or a broker. Both are salespeople in their own right, although their functions are completely different. The FA will do a complete needs analysis on you and thereafter look at putting your money away in what tend to be longer term investment products than brokers. A broker couldn't give a crap about your personal situation but is constantly watching the markets and interacting with the traders on the floor, so he knows what's happening right now.

In my opinion though, no broker knows where this current market is moving, so you might want to hold on on that front. In saying that, I haven't got a cent with any financial advisor nor any of the pricey products they punt. That's a matter of personal preference though...
 
DJ... said:
Therefore you want to be careful what ETF you invest in. Satrix is good because the liquidity will always be there, however your costs are relatively high with ETFs and they do not pay dividends.
Click to expand...
Satrix does pay dividends, and there's an option of reinvesting them.
 
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