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Growing my portfolio

Mar 19 2013 07:34
A Fin24 user who is close to retirement is still looking for ways to grow his diversified portfolio. He writes:

I have three years to retire and have investments across a number of classes.

Old Mutual Max Investments using these underlying funds:
Nedgroup Investments Managed Fund
Prudential Inflation Plus Fund
PSG Balanced Fund

2 retirement annuities (RAs) in 10X:
Nedgroup Stable Fund
Coronation Capital Plus Fund
SIM Inflation Plus fund
Prudential Inflation Plus
Old Mutual Enhanced income Fund
Fairbairn Capital Investment Frontiers (Capital Portfolio)

Employer pension fund
Allan Gray - Balanced Fund
Coronation - Top 20 Fund

SIM Dividend+ Index Fund A1
Satrix 40
Satrix Divi
Satrix Rafi 40
db x-trackers
50 BettaBeta
EWT 40
Ten Equity Fund
MSCI World Index

If I have R50 000 discretionary cash, which investment vehicle should I invest in for maximum growth?

Mannie Kambourakis, a market specialist for senior market advice at Sanlam, responds:

There is not enough information to answer the reader’s query and my advice is for the reader to seek the assistance of a registered financial adviser.

While there is a wide range of investments I have a sense that there isn’t a clear picture of what the purpose or aim of each investment is.

Investing an amount of cash as in this instance may appear straightforward, but more information is needed to make the appropriate decision.

For example:

•    What is the required term of the investment?
•    Are guarantees required?
•    Does the investment need to be accessible?
•    Should we be seeking tax saving opportunities?
•    Will the reader retire in three years or will he continue to work?
•    What is the income requirement in three years?
•    Does it need to be protected against rand depreciation?

If for example the investment is needed within a year or two, a money market investment would be indicated.

If the investment horizon is longer than three years, unit trusts would be more appropriate and the longer the horizon, the higher the percentage of equity that can be applied.

If the reader has done his end of year tax calculation and merely wants to make use of the tax deduction offered by the South African Revenue Service on RA contributions, he might even want to invest in one of his existing RAs.

A financial plan must aim to achieve specific goals in the future and the investments must be such that will enable the investor to achieve these aims.

It should be regularly visited to ensure that the plan is on track, and it should also be flexible enough to allow for slight changes that may be required.

A suitably qualified financial adviser would request all the appropriate information and would structure it in a manner that is appropriate and fits in with the user’s financial goals.

 - Fin24

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