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A Fin24 user says he has some spare cash to invest and wants some suggestions. He writes:
I would like advice on the following.
I am 25 years old, I have R20 000 spare cash to invest for a period of 5 years.
Please advise which investment vehicle would be most promising in today’s market.
In addition, should I invest the lump sum in one investment or split it in two separate investments?
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Simon Brown, a financial educator of JustOneLap, responds:
Five years is about the shortest time period to invest in the stock market as time is always important.
On that point, being young really counts in your favour - the sooner one starts the better.
READ: Putting money in bond, car or elsewhere
For a simple, yet broadly diverse portfolio, I would suggest two exchange traded funds (ETFs) that can be bought via a stock broker or ETFSA.
BBET40
This ETF includes the 40 largest JSE listed companies covering the range of industry and a fair component of international exposure, even though they are locally listed.
DBXWD
This is a global ETF tracking the US, Europe, UK, Japan and Asia.
It gives a wide range of industries and also great currency hedge against a weaker rand.
While it is an international ETF, it is bought in rand within South Africa, so it is a simple way of getting direct international exposure.
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