Do I need help to invest?

DO YOU really need expert help to invest in shares? It depends on a number of factors, advises a financial planner.

A Fin24 user asks:

What is your advice about choosing my portfolio? Should I invest the money myself or opt for a broker? 
I have not invested in the JSE, but would like to start.
 
Gregg Sneddon, a certified financial planner with thefinancialcoach.co.za, responds:

One man sells and another man buys and both think that they are astute.

Investing takes time (lots of it) and research (even more of it) and patience (and still more of it), so I guess it comes down to the intention.

If you want to invest the money, then you would probably be better off buying something like the Satrix Divi or a unit trust fund such as the Coronation Top 20 Fund.

You won't have to make any decisions about which shares to buy or sell, and when to do it.

There will also be no capital gains tax (CGT) implication on any trades, and research shows you will more than likely do significantly better by investing in one of these funds than by trying to buy and sell on your own.

You could also invest directly into shares via a stockbroker, but you need to watch out for brokerage fees (if you have a broker with a discretionary mandate). Also look out for CGT and fees.

If you want to learn about buying and selling shares, perhaps you should invest the bulk of your money into an exchange-traded fund (ETF) or unit trust, and then set aside about R50 000 with which you could open an online share portfolio.
 
This will allow you to buy and sell as you wish - the fees will most probably be lower than if you work through a stockbroker.

Before you do any of this, though, you need to make sure that you have a long-term time horizon and that you do not require any of this money in the short to medium term for things like school fees, holidays or anything else that requires a certain return or amount of money.

You should also make sure that you have an emergency fund in place to cover those expenses, and also ensure that your basic financial planning risks are all covered sufficiently (death, disability and retirement).

You should also not have any debt.

It would be unwise, in my opinion, to invest this amount of money if you could settle debt with it.

 - Fin24