Moneymarket Investment

[Johand]

I suggest looking at the Cadiz Money Market unit trust. As far as I remember the MorningStar reports had them as the top money market fund in South Africa several months in a row. Their 1 year historic return on Nov 08 was 12.07% - with current 3 month return on 3.07% (about 12.3% annualised).

It is relatively painless. Download the forms from their website, fax it with copy of ID and FICA.

You have daily liquidity, monthly compounding, no transaction fees and low fund fees.

I have been with them for a couple of months now and they really do make my money grow at this stage.

http://www.cadiz.co.za/personal/wealth/structuredproduct.aspx?productid=31

 

[Wynsam]

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.

Thats the right way.

 

[thatdamnJoe]

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...

Blue chips like Ford, GM or chrysler?

 

[DJ...]

Blue chips like Ford, GM or chrysler?

Good point - however we're in a totally different financial climate to what they were going through and I'm referring to local shares, however anything can happen - you have to keep abreast of news in the market when you're exposed to certain industries. There is an element of risk associated with any investment, even moneymarket (to a far lesser degree) but I'd personally choose a long term equities investment over moneymarket any day of the week.

The previous post about Cadiz is interesting because the returns merely tracked inflation for the period - the effective profit is practically nil but your investment maintains its value over the duration and at least there is a fair amount of liquidity. However liquidity isn't all that big a deal if yo're looking long term and merely tracking inflation is not profitable. It is however secure...

 

[kryptik]

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.

Agreed. Read up on the possibilities open to you, make notes and then approach an independent adviser. It'll be money very well spent, imho.

 

[Johand]

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

Good luck...

Not really. A lot of financial advisers don't know anything Plus their fees can come up to 1.5% of the money you invest on unit trust and an stagering 30% on RA's. Which means your investment needs to outperform other investments quite a bit for it to make sense.

I suggest people should do their research themselves or go directly to Alan Gray/Cadiz or similar - read the way their funds are structured and risk profiles and make the choice themselves.

They will save money. And the question is- if somebody is so good at investing why is he giving advise for pity money????

 

[Ou grote]

It's a bit hard to decide where to put your money this year.
Interest rates will apparently come down by 3% or more this year (so less return on cash), and nobody knows what's up (or down) with equities.

 

[DJ...]

Not really. A lot of financial advisers don't know anything

Like I have been saying for ages now, in this thread as well..

Not really. A lot of financial advisers don't know anything Plus their fees can come up to 1.5% of the money you invest on unit trust and an stagering 30% on RA's. Which means your investment needs to outperform other investments quite a bit for it to make sense.

I suggest people should do their research themselves or go directly to Alan Gray/Cadiz or similar - read the way their funds are structured and risk profiles and make the choice themselves.

They will save money. And the question is- if somebody is so good at investing why is he giving advise for pity money????

As stated before - CFAs should only be consulted with regards to long term investments as far as I am concerned. And even then, if you know what you're talking about, their input is pretty much worthless as they have very little experience in investing themselves and are mostly driven by profits derived from sponsored investment products. While CFAs provide a valuable service to those who do not understand how the markets work, they are a rarity to find in a financially educated person's portfolio...

 

[DJ...]

It's a bit hard to decide where to put your money this year.
Interest rates will apparently come down by 3% or more this year (so less return on cash), and nobody knows what's up (or down) with equities.

I'm honestly surprised that you're not seeing what is right in front of your eyes right now - you know what I mean...