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If you are your twenties, the current market crash may offer the perfect entry point to start building an investment nest egg.
When you buy shares, property or any assets at a much lower entry level, then, in the long term, it can be a huge advantage for your life and retirement savings, according to Amelia Morgenrood of PSG.
"If one looks at opportunities offered by local stocks, for example: if normality returned again soon or in a few months’ time, then you would have been able to buy some of the (best quality) South African shares currently trading at very low valuation levels," she says.
She thinks some of the big retailers and banks are offering high dividend yields, but are trading at low valuations. Morgenrood singles out Nedbank, the global beer group Anheuser-Busch Inbev, Remgro, MultiChoice and Standard Bank.
- READ | Investing in your twenties
Financial advisor Gregg Sneddon of The Financial Coach explains the current market situation by using a shopping analogy: you go to your local shopping mall and see a quality item that was more expensive last week – like Levi’s jeans that are on sale.
"Always do your homework before you invest. Yet, it seems people will do more research before buying a washing machine than when investing in shares," he says.
He suggests young people wanting to start investing consider exchange traded funds (ETFs) or unit trust funds as they are "simple and transparent".
"In this way you get an investment portfolio with diversification," he says.
Don't stop investing
If you are already investing on a monthly basis, don’t stop now just because of the current market situation. "Many people decide to stop investing during a crisis in the markets," Morgenrood cautions.
"It is very important never to do that. And if you happen to have some extra cash, it is a good idea to add it to your investment plan."
