Investment Advice

[sykotik]

Ive been playing with the idea of investing, but dont know the first thing... almost went with FNB's share builder or share investor, but a gut feeling tells me thats a bad move? Im 25 with a less than desirable net income, so want to do what i can with what i have to secure my future id love some insight on options!!

[HugoStroebel]

ouch.

*I am not a financial advisor. I just gave Dirk something to consider.

(The idea about forums are not to PM people but to give advice on the forum so that it can have value to someone else at a later stage.)

[IanF]

Ian I asked a few questions and looking at the website wonn't give me the answers. A while back I wrote a post about Satrix and by the way I'm not dissing them, all I'm saying is that you can't base your decisions on what someone that has no idea what he's talking about, people love making uneducated comments and besides their money should be where their mouth is before telling someone what to do and how to do it. It's so easy to say things!

Google is my friend I see Moneyweb is quite happy with SATRIX.

So it looks like Satrix's claim stands, the cheapest (at least in terms of the tracking error/performance gap) way to get into the market.

Moneyweb article for the full article.
Nick what is better investment in terms of risk/reward/liquidity?

[Nickolai Naydenov]

Does cheap mean good? Well in terms of fees their charges will be 0.75%-0.65% + brokerage fees and etc then they add VAT, these will be your annual fees plus switch fees and monthly fees and that is considering there's no brain behind it like will be the case with a fund manager or a stock broker for example. Satrix 40 foe example will buy the top 40 shares, the process is a day behind the real time market. Nobody gives you advise on tax, estate planning, there is no personal touch, nobody will tell you to move money out of there and put the accumulated lump sum in a less risky assets depending on the cycle of the economy. Markets react different to news and assest classes in which you invest need to be activly managed to maximize your returns. Do yourself a favor and have a look at 5 years satrix 40 performance http://www.satrix.co.za/products/satrix40.aspx now show me one fund that had such a loss! On their webiste shows how they've made 20% or whatever, but can you see that it still hasn't reached the levels of 2007 never mind the inflation. Now if you look at say a fund that is activly managed you'll pay say another 0.50% more but you'll even have an advisor looking after you, ate we still gona talk about cheap? Just remember that sometimes more expensive things turn out cheaper. Please don't get me wrong satrix is good because you can buy a bucket of shares, it is cheap if you manage your investment, but expensive if you don't have a clue of what's happening. The reason why I was getting upset is because people just hear something and they think they know everything and offer it to others, so when you give an advice explain why that is what you saying.

[IanF]

When you use advice given it is always buyer beware.
Nick the link you gave is interesting I compared satrix 40 to the divi fund, and the divi fund outperforms the satrix 40 by a substantial margin. My gut feel says this should not happen. But I have been out of watching the JSE for 12 years so lots has changed.
What this means is do lots of research before investing.

[HugoStroebel]

Very interresting. Nickolai, has the all share gone back to the levels of 2007? I was thinking of making use of Satrix but now you`re making me doubt that. Thanks!

(Some paid for advise is also useless) :P

[Nickolai Naydenov]

All share is sitting at almost 34 000 which is a 1 000 mire than what it was beore the crash, however in real terms it still has to recover.

What are your investment goals, period, risk you are prepared to take, how much money are we talking about, is it lump sum or recurring monthly or both, in what tax bracket are you? These are just some of the things you have to consider first then you can see what platform to use and what asset classes to invest and etc

[wynn]

I would only consider investing in property, not necessarily residential (even if a bomb or angry mob destroys the building at least you still have the ground)

The advantages are short and medium to long term.

You get an escalating monthly income (short term rent) and escalating capital gain mostly tax free (medium to long term increase in the value of the property)

There are many cheap available residential properties on the market at the moment (here I am thinking 2 bedroom townhouses in secure complexes, which the sellers will probably be prepared to rent back from you, then buy back at a higher price in the future)

[Nickolai Naydenov]

I'm sorry but I don't really agree with you Wynn. Property growth between 2002 and 2012 was 98% considering inflation at 6% per annum in 10 years wouldn't have made more money in real terms, also you pay the property about three and a half times during the life of the bond so practically you've lost money. To compare that if we take Coronation Top 20 if you had R100 000 in year 2000 in year 2010 you would of had R692 000. I have a client that has made over 100% in five and a half years, I've also got a few clients that did just over 24% in the last year, I've got the documents to prove it. Petrol increased by 242% in the period 2002-2012 so you judge and make the calculation, I'm just giving you the facts. I thought the same before and I ended up on 4 properties the first of which I bought in 2007 and I still can't break even, I have to pay in every month. Another thing is as soon as you break even and start making money that income will be taxed, when you sell the property you will pay CGT and when you have more than one property then all the taxes and etc will be more as compared to a primary property. In the last 4 years property hasn't grown so taking inflation into consideration property has lost value, there was also an article in e mail and guardian recently that an economist had done some research and said that there is a bubble in SA property. You also think that there is property is cheap but it's not really. My feeling is you don't have any properties because otherwise you would of known about all the concerns that exist and it sounds like you heard that from someone, please don't take offence that's my feeling.

[roryf]

So what you saying is that we should have invested in petrol....