Basic Investing and News for February 2018

smart phone with share investing graph

Basic Investing

For those of us who are regular people, compared to the investment mavericks who stare at 6 PC screens for 20 hours per day, it might feel like you are jumping into the deep end when you first start investing. We all want to ensure that our money grows but how do we do that with limited investment experience and without taking too much risk.

A proven method to make money in the long term, while ensuring that you are not shooting from the hip, is to invest in the JSE Top 40. What is that, you may ask? “The Top 40 is South Africa’s best-known index. It includes the 40 largest companies listed on the JSE. This is the index that most people monitor as an overall benchmark for the local exchange.​​​​”

Both the Top 40 and the All Share Index have shown that they are able to beat inflation over the long run. With the introduction of the tax-free savings account during the 2017 financial year (available from most banks and investment houses) this could prove to be a very inviting prospect in the long run.

Other options to possibly discuss with your financial adviser could include:

  •         Retirement annuities
  •         Unit trusts
  •         PPS (for graduate professionals)

If you are looking to save for a short term goal you may be better served by looking into perhaps investing in a cash fund or a money market fund.

News for February 2018

Moving on to the News of the month, we are taking a look at the Asian and European markets that have slumped due to the increasing worries that the United States might have an interest hike.

The expected interest rate hike in the US is mostly due to an economy which seems to be performing well, bringing with it increased consumer spending as well as an increase in the inflation rate.

This seems to have had quite a positive impact on the strength of the US dollar which in turn has taken great strides against the oil price. Luckily for the South African economy the lower oil price and stronger rand (discussed below) is almost certain to lead to a reduction in the fuel price. Many consumers will naturally breathe a sigh of relief.

Back on home front investor confidence seems to be returning to SA because of our newly elected South African president Cyril Ramaphosa. This renewed confidence has had a huge impact on the economy leading to a South African Rand that has strengthened against most major currencies.

We have also seen the unemployment rate drop by a whole percentage point down to 26.7%. Although it is still too early to make a call on the total impact that a change in leadership may have had and still may have on the future of South Africa, things are definitely on the up and up.

With the 2018 budget speech also behind us a silver lining has emerged for small businesses with R2.1 billion fund being developed to benefit small and medium enterprises during the early start-up phase.

This should provide the proper incentive for those looking to start their own business, side hustle or just follow their passion. Fortunately Priavis Business Solutions is at the forefront of aiding entrepreneurs to register their companies, stay compliant and get everything set to build productive customer relationships.

Get in Touch and we will be more than willing to advise in any of the matters mentioned above.

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