Sanlam Liquid

[blunomore]

I opened the account on 1 May. Use it as a savings tool. Current credit interest rate on the account is approx 11,3%

Initial required deposit was R 1 000 and thereafter, my bf and I decided to desposit a monthly amount each. In the fIrst month the service fees were higher than the interested earned, but we have already overtaken that and now we earn real interest! Great to see our money grow.

 

[DJ...]

I opened the account on 1 May. Use it as a savings tool. Current credit interest rate on the account is approx 11,3%

Initial required deposit was R 1 000 and thereafter, my bf and I decided to desposit a monthly amount each. In the fIrst month the service fees were higher than the interested earned, but we have already overtaken that and now we earn real interest! Great to see our money grow.

Underperforming inflation - you would have been better off investing in an inflation tracking product - I know one was released a few weeks back as a hedge tool more than anything else. Difficult to find profit in equities at the moment but then again, this is just the trough of what will become a major upward cycle.

Any sign of inflation easing and the bulls are going to run! Make sure you have liquid, disposable capital for when that happens...

 

[Fuma]

I thought you said Sunlight liquid for a second there!

 

[stoke]

Inflation tracking product?

 

[blunomore]

Plain English, pleaseeeeeeee!

 

[DJ...]

Inflation tracking product?

Heard the launch being discussed on "The World at 6" a few weeks back. Searched for it but couldnt find it myself - spoken to me broker who is going to try help.

 

[DJ...]

Plain English, pleaseeeeeeee!

Which part is getting you confuzzled donkey?

 

[blunomore]

Compared to some other saving tools out there, it is not too bad and the best I could find at short notice. Easy to switch over to another tool should I find a much better one.

 

[DJ...]

Compared to some other saving tools out there, it is not too bad and the best I could find at short notice. Easy to switch over to another tool should I find a much better one.

You should have a look at linked products in SA - Sanlam subsidiaries and a few others are providing them - allows you to move your money between different funds at any given point with minimal fees...

 

[Ou grote]

Plain English, pleaseeeeeeee!

have a look over here :
http://www.fundsdata.co.za/UDT/data/catlist.html

I think this is maybe what DJ means
Domestic-Asset Allocation-Targeted Absolute and Real Return

 

[LancelotSA]

You should have a look at linked products in SA - Sanlam subsidiaries and a few others are providing them - allows you to move your money between different funds at any given point with minimal fees...

Most asset managers offer linked products.... Stanlib is another example. And there are always unit trusts, or collective investments as they are currently known. These investments are liquid to the extent that you can get access to your funds within a few days and offer stacks of portfolios to choose from.

If your time horizon is short then a cash investment may be your best bet but if you are thinking long term then you should be looking at slowly but surely buying into those asset classes and sectors that are looking down.... they may not be at the bottom yet but if you start buying into them you will be perfectly positioned to take advantage when the markets turn!

DO NOT TRY TO TIME THE MARKETS!

Not sure if you have seen this before but there are many studies of the sort out there...

The Penalty for Missing the Market
Trying to time the market can be an inexact - and costly - exercise. This chart illustrates a $10,000 investment in the S&P 500 Index from Dec. 31 1994 - Dec 31 2004.

Period of investment 	Average annual total return 	Growth of $10,000
Fully Invested 	            12.07% 	                    $31,260
Miss the Best 10 Days 	     6.89 	                     19,476
Miss the Best 20 Days 	     2.98 	                     13,414
Miss the Best 30 Days 	    -0.39 	                      9,621
Miss the Best 40 Days 	    -3.19 	                      7,233
Miss the Best 60 Days 	    -7.90 	                      4,390

Those few months you stay invested in cash or money market could well lead you to miss those 10 best days!


Remember any investing must only be done after completing a full financial needs analysis and a risk profile analyser to ascertain your needs, affordability and risk aversion! The information given above is of a general nature only and may not apply to all investors. Speak to your advisor!

 

[blunomore]

I am very lost when it comes to finances, Lancelot.

Don't you wanna say what you said but plain talk? What is wrong with the option I chose?

 

[DJ...]

I am very lost when it comes to finances, Lancelot.

Don't you wanna say what you said but plain talk? What is wrong with the option I chose?

He is salesmanning you. What he means in leymans terms is it depends on your objectives. Your personal situation will determine what investment products are best for you. And then don't try to be greedy with the markets and wait in hope that a stock or index might decline further - if you think it is cheap now, you buy.

The initial bit is just an example of where else you could put your money - linked products, unit trusts, or collective instruments. Liquidity refers to the ability to transfer that asset to cash pretty much. A 32 day call account with the bank is not very liquid because it takes 32 days to receive your money, a cheque account is very liquid though in comparison (as an example) In the bond markets liquidity can mean a few other things but that is for another day.

The middle bit is what I initially referred to regarding your objectives (time-horizons). What do you hope to achieve with your investment and in what time-frame do you realistically expect to accomplish this? This will help determine a suitable investment product.

Remember Blu, any whisper of inflation easing will result in a huge turn around in the equities market (a bull run if you want to call it that), which in turn means the funds make money. You have a choice: invest directly yourself which I wouldnt recommend, or invest through an independent financial advisor. Regardless of which option you choose, a long term investor will always make money, so long as there is not an economic crash, and you certainly want to be fully invested when the market turns, so now or very soon at least is the time to buy, buy, buy!

 

[DJ...]

Sorry, it is a bit of an arse-about-face explanation but I hope it makes sense...

 

[blunomore]

He is salesmanning you. What he means in leymans terms is it depends on your objectives. Your personal situation will determine what investment products are best for you. And then don't try to be greedy with the markets and wait in hope that a stock or index might decline further - if you think it is cheap now, you buy.

The initial bit is just an example of where else you could put your money - linked products, unit trusts, or collective instruments. Liquidity refers to the ability to transfer that asset to cash pretty much. A 32 day call account with the bank is not very liquid because it takes 32 days to receive your money, a cheque account is very liquid though in comparison (as an example) In the bond markets liquidity can mean a few other things but that is for another day.

The middle bit is what I initially referred to regarding your objectives (time-horizons). What do you hope to achieve with your investment and in what time-frame do you realistically expect to accomplish this? This will help determine a suitable investment product.

Remember Blu, any whisper of inflation easing will result in a huge turn around in the equities market (a bull run if you want to call it that), which in turn means the funds make money. You have a choice: invest directly yourself which I wouldnt recommend, or invest through an independent financial advisor. Regardless of which option you choose, a long term investor will always make money, so long as there is not an economic crash, and you certainly want to be fully invested when the market turns, so now or very soon at least is the time to buy, buy, buy!

1. What do you do for a living?

2. Thanks. It makes a bit more sense. That was nice of you.

3. You keep on talking about invest, and buying shares, etc. All I wanted was to take a few rand every month and put it into an account that would attract more interest than my existing account. I wanted to save and I wanted a seperate tool for that. I am sure the bank uses my money to trade but I never intended to buy & sell shares myself.

Does it make sense?

 

[LancelotSA]

He is salesmanning you.

Please DJ! Certain posts are open for jokes and digs but others you should perhaps consider being a little serious. I am never going to see blu in real life so I am not sure how I am salesmanning her? Of what benefit to me would that be? I am giving her free advice.

The rest of what you say pretty much says what I said in different terms. If this makes more sense to Blu then thanks but I am not sure why mine would be salesmanning but if you change the words you use then it is not? And if you say it is because I mentioned Stanlib then you are equally guilty for your comments about Sanlam. The fact that Stanlib was top of the Plexcrown ratings and has recently won numerous raging bull awards perhaps shows that my mentioning of them as an asset manager is not a bad thing. I am sure you probably said it in jest but in doing so you may detract from the truths I have told.

What he means in leymans terms is it depends on your objectives. Your personal situation will determine what investment products are best for you. And then don't try to be greedy with the markets and wait in hope that a stock or index might decline further - if you think it is cheap now, you buy.

This is something I stress everytime I post as regards finances as it is true. A 65 year old will not have the same investment strategy as a 20 year old. I know you are just reaffirming it but it really cannot be said enough times.

Regardless of which option you choose, a long term investor will always make money, so long as there is not an economic crash, and you certainly want to be fully invested when the market turns, so now or very soon at least is the time to buy, buy, buy!

Something I would like to add to this and that is the importance of differentiating between lump sum investing and recurring (monthly for example) investing. If you are paying a monthly contribution you should not be so concerned if the markets still drop further. The reason for this is that you are buying your units on an ongoing basis so a further drop means you will be getting future units at an even lower cost. Yes, your initial "purchases" may lose value but over time you will benefit from rand cost averaging over time

Rand cost averaging(simplified) : In a falling market, you buy 10 units at R10 one month, 10 units for R8 the next and 10 units at R5 the following month. You may be concerned that you have lost on your initial ten units but it fact you are now sitting with an invest for which the average cost of the units you hold is R7,66. Keep purchasing units and you are then perfectly set for when the markets turn! By the time it gets back to R10 per unit you will in fact have made money overall.

Obviously lump sums would be different as any drop in value would directly affect your investment and you would then be spending time trying to get back to where you started. Obviously you could use phasing in to over come this but I will not delve into that for fear of being told I am selling!

 

[LancelotSA]

1. What do you do for a living?

2. Thanks. It makes a bit more sense. That was nice of you.

3. You keep on talking about invest, and buying shares, etc. All I wanted was to take a few rand every month and put it into an account that would attract more interest than my existing account. I wanted to save and I wanted a seperate tool for that. I am sure the bank uses my money to trade but I never intended to buy & sell shares myself.

Does it make sense?

You don't have to actively buy and sell shares yourself Blu. If you were invested in a linked product you could have exposure to asset classes besides cash without actively buying them yourself, they could form part of your investment portfolio. The same way you are investing now but just via a different portfolio.

Bottom line though is you are doing the right thing. Everyone should be saving. We are merely discussing the options and where you could possibly do better but there is nothing wrong with what you are doing now from a pure savings perspective.

 

[Ou grote]

1. What do you do for a living?

2. Thanks. It makes a bit more sense. That was nice of you.

3. You keep on talking about invest, and buying shares, etc. All I wanted was to take a few rand every month and put it into an account that would attract more interest than my existing account. I wanted to save and I wanted a seperate tool for that. I am sure the bank uses my money to trade but I never intended to buy & sell shares myself.

Does it make sense?

Confusing part is that Lancelot and DJ are both right.

But from what I'm seeing, you're actually doing the right thing already.

 

[LancelotSA]

Confusing part is that Lancelot and DJ are both right.

But from what I'm seeing, you're actually doing the right thing already.

Ha ha that is the part I found confusing myself... perhaps just saying it in another way made it easier to see. I have to admit I do sometimes slip into jargon. Suppose we all do sometimes...

As stated in my last post the fact she is investing is the right thing to be doing but if this is a long term plan then the asset class she is invested in is not.

Something confused me a little on the Sanlam liquid website and appears to be a little deceiving. They state that "your investment in the SIM Money Market Fund is safe as the underlying assets are widely spread, which means 'not putting all the eggs in one basket'". ?

 

[Ou grote]

...They state that "your investment in the SIM Money Market Fund is safe as the underlying assets are widely spread, which means 'not putting all the eggs in one basket'". ?

Probably buy lots of different ncd's.