How to Invest R100k

[Counterstrike]

Okay so I have about R100k currently sitting in a very conservative Stanlib Unit Trust.
I'm looking at a long term (3-5 year) investment period but something a bit more aggressive.
I've been reading up a lot on Satrix but would like to hear the opinions of people currently investing through them.
What's the preferred model, ETF or UT and what else should be taken into account.

On a side note, I don't have any debt (no bond or car payments) and I have a separate savings account towards a deposit for property so liquidity is not an issue.

 

[nakedpeanut]

Suppose we should start out asking what's your current ROI and what are you realistically trying to achieve?

 

[Garson007]

For that kind of wealth and given a fixed term, the UT is the better option. The lows aren't as lows, but the highs aren't as high. However, from my experience it outperforms the market over a long period of time. Where ETFs are a benefit is that they're cheap to get into and easy and cheap to get out of - whereas a UT is more of a long term investment; but neither of those define you. I'd go UT.

 

[Counterstrike]

Suppose we should start out asking what's your current ROI and what are you realistically trying to achieve?

The average performance for the fund I'm currently invested in is 5.5% per annum, I've only been investing for the past 5months though.
My goal is to attain above inflation returns over a 3-5 year period with the goal being to have a decent deposit for an investment property. Realistically I'd like to achieve a ROI better than my current investment as it's just sitting there anyways.

 

[Counterstrike]

For that kind of wealth and given a fixed term, the UT is the better option. The lows aren't as lows, but the highs aren't as high. However, from my experience it outperforms the market over a long period of time. Where ETFs are a benefit is that they're cheap to get into and easy and cheap to get out of - whereas a UT is more of a long term investment; but neither of those define you. I'd go UT.

Thanks, makes sense.
Regarding Satrix, would it make sense to spread the capital across different funds or invest the full amount into a diverse fund like Satrix40?

I'm 26 and I don't mind accepting a bit of risk when investing.

 

[Garson007]

The average performance for the fund I'm currently invested in is 5.5% per annum, I've only been investing for the past 5months though.

Cripes. I hope that is real growth, because 5.5% is terrible. You could get better even with inflation linked bonds.

 

[nakedpeanut]

The average performance for the fund I'm currently invested in is 5.5% per annum, I've only been investing for the past 5months though.
My goal is to attain above inflation returns over a 3-5 year period with the goal being to have a decent deposit for an investment property. Realistically I'd like to achieve a ROI better than my current investment as it's just sitting there anyways.

That is quite low. I'm currently with satrix and have been for almost 3 years. Growth hasn't been amazing but it's almost on 10% p.a. and thats me having started at R0 and investing a bit each month.

I'm happy with it and I too am using it as a vehicle for saving for a nice big deposit on my house one day..

 

[supersunbird]

ETFs came into existence because the was no framework for index funds to exist in unit trusts in SA back then. Now equity ETFs and unit trusts are all classed in Collective Investment Schemes. ETFs and index fund unit trusts are pretty much the same thing now, except you can buy ETF directly on the JSE (its JSE listed) with a share trading account or through a stock broker, not the same with unit trusts, I also find a UT as quicker to convert into cash than a ETF.

 

[bchip]

Wait for a correction, buy Satrix 40 and Satrix Indi
and then every year re-invest the dividends and take some savings from your salary as well.

If you were planning on buying yourself a property then dont try and time the markets,
rather just keep that money in a fixed deposit until you need it.

 

[Musicmp3]

I can send you my Bank Account number!

Seriously, have split into two balanced funds - Coronation and Allan Gray. Doing pretty well..................

 

[Aghori]

How to invest 100k? I would say buy gold.

 

[DJ...]

You could always use it towards starting up that business that you've probably always dreamed of starting...

 

[supersunbird]

How to invest 100k? I would say buy gold.

There are issues with gold, it delivers no income (like dividends and interest) so your amount of gold does not grow. Growth is only because there if someone is willing to buy it for more than you bought it for, which is not always the case.

 

[Garson007]

You could always use it towards starting up that business that you've probably always dreamed of starting...

Normal people don't have such dreams.

 

[DJ...]

Normal people don't have such dreams.

They do. Most just don't know how to do it...

 

[bchip]

How to invest 100k? I would say buy gold.

Buying gold is speculation, whether its a buy or not is a different arguement.
In the long run no-one makes money on speculation when they dont know the industry
because you dont know what your dealing with - for instance where do you sell?
As supersunbird also pointed out, Gold does not provide dividends and interest either,
over the long run this is the secret to creating wealth, re-investing your dividends into a growing asset.

Stick with safe easy investments, wait for a correction, buy solid companies hold for 10 years, re-invest the dividends.

 

[Counterstrike]

They do. Most just don't know how to do it...

True, I'm still trying to figure out a sustainable business model

 

[DJ...]

True, I'm still trying to figure out a sustainable business model

If I had time I'd offer to help. It's partly what I do for a living.

Unfortunately there's no time for that right now, but if in the future you need some assistance you can drop me a PM and I'll see what I can do...

 

[Counterstrike]

Wait for a correction, buy Satrix 40 and Satrix Indi
and then every year re-invest the dividends and take some savings from your salary as well.

If you were planning on buying yourself a property then dont try and time the markets,
rather just keep that money in a fixed deposit until you need it.

A Correction? Is this a quarterly or annual occurrence in the investment world?
Sorry for my lack of knowledge on this but could you explain in simple terms.

 

[Counterstrike]

If I had time I'd offer to help. It's partly what I do for a living.

Unfortunately there's no time for that right now, but if in the future you need some assistance you can drop me a PM and I'll see what I can do...

will keep that in mind, thanks!