Investment Help

[brentg]

Hi

I started my own thread to keep the "Proof in the Pudding" on topic of R500pm

I have R3500 that I want to invest every month. Who should I invest with?

I've signed up with Satrix just need to send in my FICA docs. Should I put the R3500 in one fund or split between two?

I'm planning to leave this for 3-5 years

*@SauRoNZA says i should try two different ETF's or possibly even three but not choose ones don't overlap too much buying the same type of shares.

What will you guys recommend for the above time period and amount?

Thanks
Brent

 

[Hendrix]

I personally like Satrix RAFI, it's a "smart" ETF.
As Pegasus says, a Balanced fund is not a bad idea either...

Another AM you can look at is Ashburton, their fee's are rather low

 

[Hamster]

As you probably know from the other thread I do use FNB's Share Saver. It is a combination of two ETF's (RMB TOP40 and RMB MIDCAP) and buys equal amount of shares in each, so it is a very easy/lazy way to diversify.

Do you have any debt though? With an extra R3500pm paying of a car loan or home loan is probably a way smarter thing to do.


What are the fees and cost of that Coronation balanced fund?

 

[Hendrix]

What are the fees and cost of that Coronation balanced fund?

It has a TER of 1.61%
http://www.moneyweb.co.za/moneyweb-click-a-unit-trust/coronation-balanced-plus-fund?sn=2012+Detail

 

[brentg]

Thanks Guys

I have no debt.

Is a balanced fund better than a high risk fund over 3-5 years?

I would like to split the 3500 between a balanced and slightly higher risk (70% balanced, 30%HR) ?

 

[R13...]

A higher risk portfolio requires a term longer than 3-5 years. 3/5 years means you should look at moderate risk products like balanced fund, I think the balanced fund (at least the coronation one I have) allows to decide asset allocation within a range.

 

[Hamster]

I'd put a small portion in high risk. Might get "lucky".

 

[Hendrix]

A higher risk portfolio requires a term longer than 3-5 years. 3/5 years means you should look at moderate risk products like balanced fund, I think the balanced fund (at least the coronation one I have) allows to decide asset allocation within a range.

You can't choose asset allocation within a fund... You buy units, they decide where to invest...

 

[Hendrix]

Thanks Guys

I have no debt.

Is a balanced fund better than a high risk fund over 3-5 years?

I would like to split the 3500 between a balanced and slightly higher risk (70% balanced, 30%HR) ?

Sounds like a plan, just don't panic too much if there's a correction in the short term (its bound to happen), you don't want to sell on a low...

 

[eitai2001]

I'd put R3000 in ETF's and R500 in 1 or 2 penny stocks (very cheap shares, say only a few Rands or Cents each) that are relatively new companies and have good potential for growth. You're probably young enough to not have to worry about losing your investment if they go bankrupt ... it's only R6k a year. And it's rare that they shoot through the roof, but like gambling, if you're lucky, then you're really lucky ... go look at what the Capitec share did from when they listed a few years ago

 

[Galactica]

I'd put R3000 in ETF's and R500 in 1 or 2 penny stocks (very cheap shares, say only a few Rands or Cents each) that are relatively new companies and have good potential for growth. You're probably young enough to not have to worry about losing your investment if they go bankrupt ... it's only R6k a year. And it's rare that they shoot through the roof, but like gambling, if you're lucky, then you're really lucky ... go look at what the Capitec share did from when they listed a few years ago

R500 on one or two stocks per month will slaughter him on costs...unless he saves that money until it's a significant lump sum and then buys.

BTW congrats on becoming a CA!

 

[eitai2001]

R500 on one or two stocks per month will slaughter him on costs...unless he saves that money until it's a significant lump sum and then buys.

BTW congrats on becoming a CA!

True, my bank would charge me about R50 in fees for that, but it's bank dependent. But I'd say put R1500 in penny shares every 3 months. It's important to understand this is super high risk. If you buy a 5c share and you have R1500 in there and it drops 1c, you will lose R300. By the same token if it goes up 1c you will make R300. It's no different than going to a casino, maybe with a more educated gamble. But at our age, it's fun to toy around with. If it goes up 10c for example, you would make R3000. But its only in exceptions where it goes up a lot. They usually fluctuate up and down between 1 to 2c.

And thanks

P.s for the other 3k, look at the unit trusts offered by www.anchoraspirant.co.za ... They are targeted at people our age. I made some cash following their model portfolio last year.

 

[R13...]

You can't choose asset allocation within a fund... You buy units, they decide where to invest...

I meant you can decide what % goes to equity, to property, etc within their set maximums on the balanced fund.

 

[Hendrix]

I meant you can decide what % goes to equity, to property, etc within their set maximums on the balanced fund.

You cannot choose anything within the fund, the AM decides.