akescpt
Honorary Master
nedbank has a retail savings bond guaranteeing 9%. im thinking about that!
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Investment help please
- Thread starter Lament
- Start date
ld13
Honorary Master
The Nedbank Retail Savings Bonds (for clients less than 60 years of age) of 9.25% interest on maturity one?
I have had a look at that, but it seems like the 9.25% is the total interest. It is inclusive of the effect of compound interest. I.o.w you still only get 7.75% per year.
1 100.000 x 1.03875 =103.8750000
1 103.*** x 1.03875 =107.9001563
2 107.*** x 1.03875 =112.0812873
2 112.*** x 1.03875 =116.4244372
3 116.*** x 1.03875 =120.9358841
3 120.*** x 1.03875 =125.6221496
4 125.*** x 1.03875 =130.4900079
4 130.*** x 1.03875 =135.5464957
5 135.*** x 1.03875 =140.7989225
5 140.*** x 1.03875 =146.2548807
46.2548807 / 100 = 0.462548807 / 5 years = 9.25097614 %
Capitec gives you 8.50% per year excl the compounded interest effect and is the better bet. Will post up comparative figures later after I check my facts a bit.
with all due respect, taking current inflation into account 8.5% is a very thin return. any of the JSE blue chip top40 stock will return way more if your timeline is 3-5 years. devaluation of the rand and high domestic inflation justify and should indeed demand a more aggressive approach to investment options/instruments
akescpt
Honorary Master
so i pick a top40 stock and then just leave it for 5 years? do i put in one of those loss indicators? im looking for a safe haven (ie. capitech/nedbank) and an aggressive investment (jse). then also im going to get a retirement annuity - aggressive for the next 15 and then smooth after that.
Greg C
Well-Known Member
Sensational suggestion.It amazes me that people just sort of it ignore it.
Do you want him to put bold happy smiley faces and exclamation marks before people read his suggestion.
Only issue is the possibility of not being available at his required time. To be honest with you he will struggle for great returns and such immediate availability.The best funds are a minimum of 1-3 year outlook mainly 3.
And he also wants to put in money monthly, which a bond unfortunately you cannot.You can repurchase a bond,with the returns sure but once you purchase the bond thats it until maturity date or you take it out before that and take the penalty.Bond 101 the longer the bond has to maturity the higher the returns,closer to maturity date the smaller.Ie taking money out from your bond 2 months into a 1 year bond will kill you.
Note one thing here:It is expected of you that to receive the promised returns on a bond that YOU REINVEST the return at similar or better returns or the real rate of return will not be what you expect.
I would suggest having a look at what was mentioned by this(bond wise) if guarentees to a certain level is what you are looking for.
But my main suggestion would be to use a trust fund/money managed fund currently on the market via prudential or coronation as these are the best performing currently.
Diversify the 100 000 up into 3 chunks,50 000 for the guarenteed portion allowing for returns of around the 3% mark(under inflation sure but your money is safe),take 30 000 and stick it into the inflation + account with returns of around 9%,you can offset the fact that your bond returns are being eaten by inflation by this account and further diversify by selecting slightly riskier markets that the investment will focus on.The last 20 000 will be your baby,the bread and butter of risk and return.
As offshore is shocking and for the immediate 1 year future doesnt look promising I would avoid offshore for this portion however make sure you look at something with relatively high risk but potential huge capital returns.
Shares are what this investment will focus on with a risk level of 8 or so
Take the 5000 that you were going to put into the investment and split it again using the above and set the debit order up for a 12 month period.
All the accounts require a minimum amount of lump sum of R5000(you have 100 000) not a problem and minimum debit of R500 for most of them(also no problem)
The accounts have a 30 day call.
Ie notify via writing on the 1st of the month and 30 days later it is deposited straight into the account you setup via the debit order.
Summary:50% Guarenteed fund 30% riskier level 5-6 and 20% in levels 7-9.
Diversify far enough to eliminate risk.Use coronation or prudential here.
Or Purchase a 1 year bond,reinvest the returns monthly into a similar account for real rate of return,but suffer possible inflation issues.
It is unfortunately a fact that your money is better off in equity currently.A well selected equity
Hope all this helps
Greg C
Well-Known Member
You realise with all due respect that this answer is abit pathetic to be honest.
You are 100% within your right to ask for the cost break down,they cannot respond to you with ''you signed for it'' but you accepted that answer according to the post. You might not have had the chance to change any of those costs,but for the goodness of your own mind you could have pressed them to atleast diclose how they calculated the expenses to you which you are 100% in your right to do so.Dont just accept anything,if you dont ask you'll never know
if you consider the JSE as a option my advice would be to avoid any index related instument ie. all share index etc, go for single stocks like AGL,BIL,SAB,MTN,VOD etc. compare those returns on a 3-5year graph, then look at the best liquid money market return over the same period. before choosing an investment try clear any withstanding debt you may have and then plan your investment strategy
best of luck!
best of luck!