• IS provokes sea-change

    It has been a grave mistake to defy both Russia and France, says Leopold Scholtz.

  • Nene's SAA nemesis

    No political figure seems to have the guts to speak out against Dudu Myeni, says Solly Moeng.

  • The mp3 revolution

    Ian Mann takes a look at the war between digital music and the compact disc.

All data is delayed
See More

Buy shares, get in on the action

May 02 2010 21:38

Company Data


Last traded 91
Change 0
% Change 0
Cumulative volume 61328
Market cap 0

Last Updated: 27-11-2015 at 05:00. Prices are delayed by 15 minutes. Source: McGregor BFA


Last traded 867
Change 7
% Change 1
Cumulative volume 495492
Market cap 0

Last Updated: 27-11-2015 at 05:00. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

Backers ditch cash for equities

'Stocks are tops for 2010'

SA shares show 'fear premium'

Jargon buster: JSE/FTSE Top 40

Jargon buster: closed period

Small caps, big problems

Think of investing and for many people equities will be the first asset class that springs to mind.

Why? That’s hard to say, but equities – in this case, company shares listed on the JSE – are synonymous with investing.

Equities: easy to understand

Equities are almost regarded as a special asset class. Perhaps it’s because of long-term performance, where total returns tend to outstrip other asset classes.

It might also be because equities are relatively easy to invest in and keep track of.

But it’s probably because equities can be understood through the company that’s listed on the JSE, something investors can see and experience.

A top investment professional would tell the tale about taking a child, still fairly young, to a casino.

After a few hours of walking around and trying the roulette tables the young person exclaimed what a buzz it gave him.

“You like this. Do you want to own a piece of it? Then buy shares in Sun International,” was the parental advice.

Similarly, a keen cricket watcher might notice what seems increasing amounts of beer being consumed at matches.

When thinking investments, SABMiller would probably come to mind.

Or someone living near a port would see ships loaded with coal or iron ore heading for China. That could prompt research into South Africa’s coal and iron ore producers.

Those and many other examples make equities tangible to investors. They can see the companies, learn more about what they do and if prospects look good they can buy shares and share in the action.

It gets better with age

But most attractive is probably long-term performance. “Over time we expect equities to outperform other asset classes. That’s the equity risk premium an investor is paying for," said Ian Troost, head of multi-assets at Metropolitan Asset Managers.

"Ultimately, equities are a play on the economy,” he said.

Gerhard Lampen, head of Sanlam iTrade, agrees. It’s “definitely the performance” of equities that makes them a special asset class, especially if viewed over a long period of 30 to 50 years.

“There’s also the current scenario – especially if you look at the United States – where money is leaving money market instruments into equity markets.”

Much of that money is finding its way to emerging markets, including SA. At the time of writing (mid-April) R11.6bn in foreign currency had already been spent on local equities.

Lampen said most iTrade clients, who buy JSE-listed shares directly via the online trading platform, tend to be medium- to long-term investors. “Medium-term – more than six months – probably make up the biggest group.

"They have a target price and when that’s reached they sell and look at something else,” he said.

Long-term benefits

But longer time frames for equities can’t be emphasised enough. Troost reminds us that more than capital appreciation, equities should be bought for the dividend stream. Over time, dividends account for the majority of the total return from equities.

 - Finweek
sanlam  |  sabmiller  |  sun international  |  dividends  |  equities



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
1 comment
Comments have been closed for this article.

Company Snapshot

We're talking about:


Marketing is a big concern in SA's small business community, followed by a lack of confidence and partnering with the wrong people, according to a survey.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The 25 basis points interest rate increase is:

Previous results · Suggest a vote