Moneymarket Investment

[CathJ]

OP: why moneymarket though? It tracks inflation so there's no real profit derived. Bonds track inflation better but I doubt you'd want to go that route. If you have the cash lying around and are not nearing retirement, then why not just speak to a financial advisor for advice on how to invest it better?

Why not bonds? Just because it's fairly low return?

 

[Pitbull]

I personally hate the Moneymarket but hey, that's just me.

 

[Pitbull]

Why not bonds? Just because it's fairly low return?

No because it's kinda stagnant. It doesn't move anywhere. When last did the Euro really make any gains, or the Dollar or even the Pound ? The gains for time invested is very little if any at all. The money market boom is long gone and we all missed that boat. Get into shares rather

I'm trying to look into companies pushing for biofuel. Also there is a company doing research on depositing carbon under the sea bed, There was a program about it on TV a few nights ago (Discovery). These are things that will end up being big big big game players later in our lifetime. It's a bet ofc so don't take my personal view as scripture.

But I would play the Shares market any given day of the week above the Money market. Hands down.

 

[xrapidx]

Endowment policies also suck - I was convinced to take a 5yr one when I was younger (and naive) - I'm currently loosing -R5000 compared to the cash I've put in... thank goodness this is the last year.... NEVER again - I also took a 3% guaranteed return insurance, so at least I'll get 3%.

I had a look at the broker fee, service fees, etc. they make up about 15%-20% of the premium...

 

[Maelly]

I was gonna blow it up (remember I spoke about mags sum tym ago), but I decided against that idea. So, I have about 10k to invest. I only have FNB products like Your 32DayIntrestPlus (formerly WimAMillionAMonth), Flexi Fixed deposit, Share Investing. And I also have a Capitec Savings account PLUS one STDBank Fixed dep account (with sum cash in it). I guess I will just spread the cash across these products.

 

[DJ...]

Why not bonds? Just because it's fairly low return?

Bonds aren't necessarily low return depending on what type of bond you're buying. High yield bonds for instance (junk bonds) or even asset backed bonds. But again, it's the risk you take that determines the profit.

I doubt most private investors could afford to invest in the bond market directly. There is a minimum subscription amount indicated in the prospectus of every bond which is often out of financial reach of the average joe.

However that is an aside point I suppose. The government bonds are what will track inflation better, and they are not used as profitable investment instruments, but rather a hedge against inflation or inflation-sensitive investments. So unless the OP is wanting to hedge against inflation, it doesn't really make sense to invest in money market or government bonds. Yes it's safe, but so are long-term blue-chip investments which will always outperform inflation over the long term - usually substantially so, with the added benefit of a dividend...

 

[Pitbull]

I was gonna blow it up (remember I spoke about mags sum tym ago), but I decided against that idea. So, I have about 10k to invest. I only have FNB products like Your 32DayIntrestPlus (formerly WimAMillionAMonth), Flexi Fixed deposit, Share Investing. And I also have a Capitec Savings account PLUS one STDBank Fixed dep account (with sum cash in it). I guess I will just spread the cash across these products.

To touch on what DJK said.

If you don't need the money for the next 5 - 10 years. Put in on the stock market and write it off. But don't put money in there that you will need in the short term. Once your money has made significant gains pull it and re-invest. But the time frame for these gains to happen can take years. Thus the need to have it written off for atleast 5 years.

You might make a killing over night but don't budget on it

 

[DJ...]

No because it's kinda stagnant. It doesn't move anywhere. When last did the Euro really make any gains, or the Dollar or even the Pound ? The gains for time invested is very little if any at all. The money market boom is long gone and we all missed that boat. Get into shares rather

You're talking about forex trading. Very different to a money market account. The money market accounts track short term liquidity, not forex. Your risk with a money market account is the ability of the bank to meet it's short term obligations to other banks - linked to the inter-bank offering rate. This doesn't necessarily track a specific currency. It is linked to the interest rate at which banks lend each other money. Which is why it is an inflation hedge...

 

[CathJ]

To touch on what DJK said.

If you don't need the money for the next 5 - 10 years. Put in on the stock market and write it off. But don't put money in there that you will need in the short term. Once your money has made significant gains pull it and re-invest. But the time frame for these gains to happen can take years. Thus the need to have it written off for atleast 5 years.

You might make a killing over night but don't budget on it

I'm hesitant to do this with a large amount of money, since the R40-50K that I put in to ETFs over the last two years is now worth less than when I started. I'm not too concerned, because I know it's a long term thing, but it's not really conducive to putting another 100K in!

 

[Pitbull]

I'm hesitant to do this with a large amount of money, since the R40-50K that I put in to ETFs over the last two years is now worth less than when I started. I'm not too concerned, because I know it's a long term thing, but it's not really conducive to putting another 100K in!

The world is a funny place. Like they say history repeats itself. Markets have the exact same thing. a Sahre in Sasol for the people who bought that BEE shares at discount is now worth enough to cover the broker fee's more or less with the current fuel things going on.

That was a great investment back in the day and will prob be one day in the future.

Technology is growing and the new Yahoo/Microsoft is in the making. Just keep your eyes open and you will spot it. But again, it's long term. Your 40/50k will still give you the returns you want if you invested in something that will not end in the next year or so.

I'm putting a little here and a little there trying to keep my portfolio open and wide. I have seen some pretty good gains and will be pushing in more funds on those investments when I have money later in the year. And these investments have been in emerging markes There is nothing but growth. I caught it early though. Who know it might still crash tomorrow but the prospects are good of it going all the way.

 

[DJ...]

I'm hesitant to do this with a large amount of money, since the R40-50K that I put in to ETFs over the last two years is now worth less than when I started. I'm not too concerned, because I know it's a long term thing, but it's not really conducive to putting another 100K in!

Well you put your money in ETFs though, which is essentially a pool of equities with a combined risk factor depending on the pool - and equities have had a rough ride over the last year. Which ETFs did you put your money in? IIRC you were quite interested in SATRIX at one point last year or the year before.

Over the long-term, equity investments are a sound bet. Short term volatility often shocks people, but I suspect you also invested your money when the JSE was climbing above the 30k mark. It was considered over-priced even before it hit 30k so it had to swing down, but the global turmoil just made it plummet. There was a lot of speculation in commodities at that time and SA being a commodity driven market shot through the roof - speculation is not sustainable and I lost a fair amount on trading CFDs and futures because of it as well. It will swing back up, and imo we are heading towards that upward trend fairly soon. We're already seeing signs of it...

 

[CathJ]

Well you put your money in ETFs though, which is essentially a pool of equities with a combined risk factor depending on the pool - and equities have had a rough ride over the last year. Which ETFs did you put your money in? IIRC you were quite interested in SATRIX at one point last year or the year before.

Over the long-term, equity investments are a sound bet. Short term volatility often shocks people, but I suspect you also invested your money when the JSE was climbing above the 30k mark. It was considered over-priced even before it hit 30k so it had to swing down, but the global turmoil just made it plummet. There was a lot of speculation in commodities at that time and SA being a commodity driven market shot through the roof - speculation is not sustainable and I lost a fair amount on trading CFDs and futures because of it as well. It will swing back up, and imo we are heading towards that upward trend fairly soon. We're already seeing signs of it...

Yes, I did unfortunately invest just at the peak, which was bad timing. I'm in one or two of the Satrix ETFs, and ABSA's NewRand and the gold one as well. I put a bit more in when it was quite low, and I'm trying to have a long-term outlook, but am a bit nervous about putting too much more in

Actually it's not so much that I don't want to put more in, as that I have a fair chunk of money sitting in a marketlink account. Some of that I want to keep there as emergency money, and the rest I want to do something productive with, but where I can still get to the money if I really need it - which I don't feel I can do with ETFs. Which is why I'm planning to go see a financial advisor, as soon as I get around to it...

 

[DJ...]

The financial advisor is the best bet in that case...

Good luck...

 

[Lord Anubis]

Sasol, Absa, MTN shares will rocket in the 2010/11 bull market upturn...buy now

 

[tco21]

Lol. everyone is always a stock market advisor

Buy low, sell high!

 

[Wynsam]

Speak to your bank or a financial advisor, although the latter is unlikely to suggest a moneymarket investment. Your bank will have moneymarket investment products...

Why would a good financial advisor not suggest a money market account if it was appropriate to the needs of the client? They would have too.

 

[DJ...]

Why would a good financial advisor not suggest a money market account if it was appropriate to the needs of the client? They would have too.

That's where the salesman in them comes out. They'd more than likely suggest a money market fund, not an account. They don't earn a commission on money market accounts...

 

[Wynsam]

That's where the salesman in them comes out. They'd more than likely suggest a money market fund, not an account. They don't earn a commission on money market accounts...

Agreed. A financial advisor is not a salesman though. Someone who sells financial products should not call themselves a financial planner.

 

[DJ...]

Agreed. A financial advisor is not a salesman though. Someone who sells financial products should not call themselves a financial planner.

That's a matter of perspective. Financial planners earn a commission on the products they sell - they are effectively salesman, albeit skilled in the financial markets to an extent. And there are always the bad apples, and in this day and age where 18 year olds are being recruited with a 3 month training course to become financial planners, they do not see the job as providing a service to a client, but merely a means to the end. I applaud those who are able to put their clients before their own greed though...

 

[Barefoot Billionaire]

Get an independent financial adviser. Even if he charges you a R1 000 ph, at least you know he or she's not incentivised to sell you any specific product.