Top up RA now, or wait?

[the eskimo]

I had planned to top up my 10x RA after I got my bonus (not that great, but it's something) - bonus has now arrived and markets are now ~30% down, and my retirement funding assets are between 25% and 30% down too.

I don't want to put money in the RA now and then markets go down another 20%, then I could just have waited.

What's everyone's thoughts on this? Do it now? Wait a little? Rather put it into my flexi-bond to ensure some level of liquidity if things become tougher?

Please no FA talk of "It's not timing the market, but time in the market." I'm rather looking for views on which way (global) markets might be heading.

Some info (not that I think it's that relevant for what I'm asking):
I have very little concern over job security and no other significant needs/unsecured debt. I do contribute towards company PF apart from my RA (and projections indicate I should be comfortable in ~30 yrs time to retirement without any other investments). Risk tolerance is medium-high. I'm not keen to expand share portfolio without the tax benefit of RA at this time.

 

[Verde]

Definitely better to invest now than 2 months ago. I would go for it.

 

[bchip]

RA's are terrible investments wouldnt come near it.
Pension Provident funds are better.

I would pay off my bond first.

 

[supersunbird]

RA's are terrible investments wouldnt come near it.
Pension funds are better.

I would pay off my bond first.

How is a pension fund and a RA any different investment wise?

 

[frodob]

RA's are terrible investments wouldnt come near it.
Pension funds are better.

What do you think makes Pension Funds better than RAs?

 

[bchip]

How is a pension fund and a RA any different investment wise?

At least you can get the stuff out on resignation.
But meant to say Provident fund

 

[happyCoder]

Split it into 6 parts and put 1 part in for the next 6 months and keep the rest in your bond until you need it.
No one knows if we are at the end or not

 

[Napalm2880]

RA's are terrible investments wouldnt come near it.
Pension Provident funds are better.

I would pay off my bond first.

I've put a lump of inheritance money in my bond to reduce interest repayments. This is only temporary though. My plan is to push the money offshore when the rand improves but before the foreign market picks up.

SA is at a fair risk of going pear shaped - high unemployment, high crime and dysfunctional government. Therefore you don't want all your investments to be in SA.

 

[the eskimo]

RA's are terrible investments wouldnt come near it.
Pension Provident funds are better.

I would pay off my bond first.

At least you can get the stuff out on resignation.
But meant to say Provident fund

I think the factors for determine the effectiveness of a retirement funding product in no specific order (although some are more important than others) (assuming DC fund)
1. Tax efficiency (which isn't really an issue for either of the standard options) - but could be when you use a TFSA rather than a traditional product (for a low income earner for example)
2. The structure (the life companies' "traditional" products are the worst),
3. the underlying assets, and
4. the fee structure.

Nothing really bad with a 10x RA (apart from maybe a couple of options being a bit cheaper). I'm not too concerned about being able to cash in at some point - it is for retirement funding.

I don't think we've seen the bottom yet and it's early in the tax year. I would put it somewhere safe and wait a few months. Have you considered Thymebank's 10% interest rate option?

I'll explore it, with the recent rate cut, my bond rate is now less than 10%, so I do get a small gain.

Split it into 6 parts and put 1 part in for the next 6 months and keep the rest in your bond until you need it.
No one knows if we are at the end or not

I hadn't thought of this. Makes sense - could even add it to my regular debit order temporarily.

SA is at a fair risk of going pear shaped - high unemployment, high crime and dysfunctional government. Therefore you don't want all your investments to be in SA.

I do have a large part of my "discretionary" investments in rand-hedge local stocks and foreign ETFs given the concentration of retirement assets in the local market. Not sure I have an appetite for more at this stage given the exchange rate falling recently.

 

[MrGray]

I would try and open a global account if your bank offers it denominated in dollars or pounds and keep it there for a while.

 

[supersunbird]

Have you maxed out your annual TFSA contribution?

 

[WollieVerstege]

I'm keeping everthing on hold till mid May, Covid-19 and junk still needs to run its course, at the earliest. There wll also be second round effects that I am scared to predict at this time. Will keep it in cash till then.

 

[3WA]

I would try and open a global account if your bank offers it denominated in dollars or pounds and keep it there for a while.

That sounds like a way to lose money right now...

 

[the eskimo]

I would try and open a global account if your bank offers it denominated in dollars or pounds and keep it there for a while.

That sounds like a way to lose money right now...

Already have one for eBucks . Not adding anything further at 1 USD = 18 ZAR

Have you maxed out your annual TFSA contribution?

Monthly D/O to a mix of ETFs

I'm keeping everthing on hold till mid May, Covid-19 and junk still needs to run its course, at the earliest. There wll also be second round effects that I am scared to predict at this time. Will keep it in cash till then.

I'm thinking the same. It could catch us by surprise though, but it will likely recover almost all the way up if kim jong doesn't press buttons.

I'll consider this too. Thanks

 

[Tman*]

I would try and open a global account if your bank offers it denominated in dollars or pounds and keep it there for a while.

Not a bad idea to get a rainy day fund if you dont have one already.

 

[saturnz]

My plan is to push the money offshore when the rand improves but before the foreign market picks up.

all the best trying to thread that needle

 

[MrGray]

That sounds like a way to lose money right now...

Really? You expect the Rand to appreciate to the dollar and equities to recover going into a global depression?

 

[3WA]

Really? You expect the Rand to appreciate to the dollar and equities to recover going into a global depression?

The rands at an all-time low. You can bet on it getting weaker, or you can bet on it getting stronger. That’s betting, not investing. You may as well play online roulette.

 

[SauRoNZA]

At least you can get the stuff out on resignation.
But meant to say Provident fund

Get it out how? You’ll get at tax on it to the max which would negate every little bit of investment you ever made and in the current climate probably a huge loss.

 

[zerocool2009]

I topped my RA massively in end Feb. All that gains and tax perk is GONE, that is how much I lost. RA’s are poef, my 2c. (Then you might ask, why did I topup). Good question, money in the water....