Satrix ETFs

[Patty]

Hi, Im a noob to shares etc. I got a basic understanding of ETFs in the past few days. Im looking at investing R700,000 in Satrix. I was planning to split the investment in 4, balanced between 2 medium risk and 2 high risk funds. Since im a total noob at this, is there anything to watch out for?

I have chosen Satrix as their fees seem low.
My modus operandi is if the investment heads downwards I will withdraw funds before too much damage is done.

Thanks!

 

[Fuzzbox]

You really need to do your homework on ETFs.
The old saying of "how to make a SMALL fortune on the STOCK Exchange is to start with a BIG one".
Be very careful.
Talk to a broker if you are not sure.

 

[ny152]

Have a look at Investec's savings accounts

+1 for talking to a broker

 

[Patty]

Would unit trust be a safer option then?

 

[KingRat1]

Satrix is the safer option than buying the shares yourself. The different Satix funds can make up a balanced portfolio with low costs.

I believe it is a good choice choose the funds to match you appetite for risk and growth.

Never forget that the underling investment is on the stock market so there will be some volatility, it is a medium to long term investment so don't be to quick to liquidate.

 

[Mike Hoxbig]

Would unit trust be a safer option then?

I would split it between an Allan Gray balanced fund, RMB40 (if you bank with FNB - lower fees), Satrix T40 and Satrix Divi...

 

[KingRat1]

Would unit trust be a safer option then?

Not really, depending on what funds you choose. Coronation and Alan Grey have great funds at low costs if you do not use a broker. This is the route I have taken, two funds with Coronation.

 

[Dubes]

Seriously! R700k to invest and admission of being a total noob yet you're reluctant to speak to a broker?

You can negotiate 1.5% or less upfront (around or even under R10k) and a 0.25% ongoing. For the peace of mind that you have advice on hand at all times. And if you want no ongoing advice then just pay upfront and do it yourself thereafter, no going back to the broker for advice.

 

[killerbyte]

Take a look at the Investec Top 40 Accelerator

Min R100k investment but they guarantee your capital and you can expect some serious growth (according to their ad on 702)

 

[Dubes]

And people advising on fund choices, have you asked the investor what their time horizon is, their aversion to risk, their tax situation, whether this is their only savings, what the rest of their financial situation looks like? Easy to give advice when there are no come backs or consequences to the advise you give. With a broker you have ombudsman looking out for you and personal indemnity insurance.

 

[Mike Hoxbig]

And people advising on fund choices, have you asked the investor what their time horizon is, their aversion to risk, their tax situation, whether this is their only savings, what the rest of their financial situation looks like? Easy to give advice when there are no come backs or consequences to the advise you give. With a broker you have ombudsman looking out for you and personal indemnity insurance.

People are giving him options as well as their opinion on what they would do if it was their money. Of course he should speak to a broker, but at least he then has options in mind that he can raise with the broker. No need to get so touchy...

 

[Dubes]

People are giving him options as well as their opinion on what they would do if it was their money. Of course he should speak to a broker, but at least he then has options in mind that he can raise with the broker. No need to get so touchy...

If he wants a list of options I can send him a multiple page document listing all portfolios and funds available on various platforms. That is not advise.

 

[Dubes]

My modus operandi is if the investment heads downwards I will withdraw funds before too much damage is done.

Oh dear... I'll refrain from commenting on this investment strategy in detail but will strongly advise against it unless you have all analytical data on hand to assess market movements. And even then timing of markets in usually only successful over time in the markets less than one out of ten times.

 

[Shard]

Hi, Im a noob to shares etc. I got a basic understanding of ETFs in the past few days. Im looking at investing R700,000 in Satrix. I was planning to split the investment in 4, balanced between 2 medium risk and 2 high risk funds. Since im a total noob at this, is there anything to watch out for?

I have chosen Satrix as their fees seem low.
My modus operandi is if the investment heads downwards I will withdraw funds before too much damage is done.

Thanks!

Its been mentioned before, but yeah, you need to pick how you invest based on a set factors. Investing isn't necessarily going to result in growth in capital in the short term - the market is over priced at the moment, so its not a great time to get into equity for the short term (This is my opinion based on 10 years as a trader and 5 in Risk Advisory). That said, it was overpriced a year ago and has continued to climb.

Be careful in your selection of someone to advise you, most of the people that advertise are just salesmen with very little knowledge of Markets. Ask your well off acquaintances who they use, its always better to go via referral because the guys that know what they're doing don't need to advertise. 700K is substantial enough to get some personal attention.

If that's not your bag, the balanced funds at the strong Management houses are always a good place to go. You've already got the first principle down and that's to Diversify. Allan Gray, Foord, Coronation are my personal recommendations, Investec would be there too, but they've suffered recently from having too much exposure to Resources.

It you want to look at some ranking info for various funds, you can find it here (as at June 2014), it gets released quarterly by Riscura:

http://www.riscura.com/press/surveys/riscview-june-2014

 

[shadow_man]

What's the cheapest way to buy Satrix? Should I just open up an FNB share trading account or would another platform be best?

Thanks,

 

[Alton Turner Blackwood]

What's the cheapest way to buy Satrix? Should I just open up an FNB share trading account or would another platform be best?

Thanks,

If you're already banking with FNB then its easier to just open a share account with them as well.

 

[Verde]

My modus operandi is if the investment heads downwards I will withdraw funds before too much damage is done.

Thanks!

This is a terrible strategy. Select an asset allocation which suits your need, willingness and ability to take risk and follow a buy and hold strategy. market timing is dumb.

How do you intend buying Satrix - using a stockbroking account, or through their platform.
If you want to use a broking account be very careful, the spreads are huge, don't ever place market orders. You have to watch the market and place limit orders.
If you use their platform it costs more.
They also have unit trusts, which is probably the best bet, but I think you need to use an adviser, which can be expensive.

 

[Dubes]

They also have unit trusts, which is probably the best bet, but I think you need to use an adviser, which can be expensive.

Fees were mentioned above. Unscrupulous advisers can charge up to 5% upfront and 1% ongoing, however, a respectable one would probably charge as little as 1.5%-2.5% upfront and as little as 0.25% per annum ongoing. Consider what an investor stands to lose by making ill considered investments or irrational timing of the markets that really doesn't work out to much.

Of course, you could also find a fee based adviser but probably cost much the same anyway.

 

[chrisc]

I think the OP's ideas are sound

 

[patrick]

'Scuse the linking to my own site, but it's easier than retyping everying.
Fees can suck over 50% of future profit: http://investorchallenge.co.za/those-fees-are-blatantly-robbing-you/
And no you can't sell a good investment when it's going badly because you'll get it all wrong: http://investorchallenge.co.za/how-to-lose-money-in-the-stock-market/

Cheapest way to hold R700k satrix shares is in a stockbrokers account. If it was under R100k then consider satrix directly.