A Fin24 reader writes:
I am still at school and I've taken an interest in
investing.
I currently have R5 000 I have no intention of spending. I
want to invest it and am uncertain as to what would be the best route.
I don't mind if it is a long-term investment. What should I
put my money in, if I'm looking to invest for 30 years? What would give the
best return over that period of time?
If I invested for five years, what would the best option be in that case?
Gerdia Kleynhans-Bosch, financial planner with PSG
Konsult in Vredenburg, responds:
Every learner should have the opportunity to start investing
as soon as possible.
Equities are the best-performing asset class over the longer
term, although in your case the amount you want to invest is too small to buy
shares directly on the market.
The best alternative will be a unit trust fund over the
30-year period. Choose either an equity fund or a flexible fund. The fund
should include approximately 65% SA equities, 20% foreign equities and 15%
property funds.
For the shorter term of five years, you will get the best
returns with a balanced fund.
If you ask a registered financial planner for advice, you can always keep the following aspects in mind:
- What was the past performance of the fund over a 10-year (or longer) period?
- Which brand do you feel comfortable with?
- How do the asset management skills beat their benchmarks over the period?
- What investment philosophy and approach is followed?
- Is there an
investment process and how is it maintained?
- Fin24