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Young investors should read this

 Equity investing

The problem you have mentioned is that you have had difficulty finding the time to manage your portfolio. First you need to make the distinction between speculating and investing. If you aren’t taking part in speculative trading, you don’t need to be sitting in front of your laptop watching the markets all day.

The time required for investing is in the form of research prior to making an investment. This doesn’t mean you need to monitor your portfolio constantly but rather make good decisions at the outset and practice restraint when you are tempted to react to short term market volatility.

This is where it may be in your interest to appoint a manager with the necessary expertise, who will build and run a bespoke portfolio for you. You want to find one that will allow you to be involved in the stock picking, but also provide guidance.

You have stated that you have learnt a lot so far through trial and error and would like to learn more in future. This would be a great way for you to continue learning, rather than pulling out of your share portfolio completely.

While there would

what you’ll do after retirement?

However, more and more people are having to ask what happens next. In a time when life expectancy is steadily increasing, the idea of throwing away your briefcase and putting your feet up to live out your ‘golden years’ in peace and quiet is looking increasingly less appealing, and less practical.

For a start, there is little point in retiring ‘to do nothing’. Many retirees find that they are actually busier than they were during the working lives, but the difference is that they can do what they enjoy.

“We are finding more and more people who are re-thinking retirement,” says Kirsty Scully from CoreWealth Managers. “In most cases, they have been professionals in their careers and they want to stay employed to continue with their personal and professional growth and development, yet they don’t want a typical work schedule. They are looking for flexible working arrangements so as to have a good balance between work and leisure.”

Wouter Dalhouzie from Verso Wealth says that from both a mental and physical well-being point of view, it is important for retirees to keep themselves occupied.

“I had a client whose health started failing shortly after retirement,”

Risk And Opportunity

 The threat of a downgrade has been hanging over the market for nearly a year, ever since S&P put South Africa on negative watch in December 2015. With the country’s sovereign rating only one notch above sub-investment grade, the next step down would be into ‘junk status’.

This has worried many investors, as the obvious question is what they should be doing with their portfolios. How do they manage the risk of a potential downgrade?

For Ian Scott, the head of fixed income at PSG Asset Management, however, this question should always be asked alongside another: what if South Africa isn’t downgraded? The outcome, he argues, is not guaranteed and therefore investors should be seeing not only the risk, but also the opportunity.

“What’s important to think about is that the downgrade is already reflected in South African bond pricing,” says Scott. “The country’s offshore credit spreads are trading in line with other countries that are already in junk status like Brazil, Russia and Turkey. Nobody knows what the market will do if we are downgraded, and there will probably be a knee-jerk reaction, but a lot of that negative news is already reflected.”

This means

Plant Power Investing

Low-cost index investing has become a popular approach to achieve market returns and will continue to be used by more individual and institutional investors. On the other hand, sustainable investing is also a growing trend, as more investors recognize that an “all-of-the-above” index investing strategy conflicts with their worldview. Index investors are accepting the status quo by owning companies as they are. Sustainable investors are driving change by using fund managers who engage with companies to adopt positive changes or by simple divestment (i.e. avoid investment in the company or sector).

I envision three groups of individuals who would find plant power investing attractive – vegans, vegetarians and advocates of a healthy eating / living lifestyle (ironically, HE/LL for short). The majority of individuals in this category, however, are not in a position to take on an extraordinary amount of investment risk. Investing in “pure play” meat or egg substitute start-up companies is beyond their financial reach.

The growth in the number of mutual funds that divest from fossil fuels provides an example that plant-based investors might want to follow. Why not simply avoid companies that are in obvious conflict with your worldview? Truth is, there are sufficient large, established companies to choose from in order to develop an investment portfolio that may satisfy both financial

Give the Gift

This time of year sees both children and adults preparing their wish-lists for the upcoming festive season. But as many South Africans continue to grapple with rising debt, now is a good time to shift the focus from giving material items to providing future financial well-being.

Giving a child an investment as a gift will not only promote a culture of saving from a young age, but will also show them how you can make money grow.

There’s a powerful story of one customer’s commitment to leave a legacy for his family, and the value of sound financial advice. In November 1968, a customer made an initial deposit of  R400 into the Old Mutual Investors’ Fund and 48 years later, his investment is today worth over R600 000.

More precious than the value of his money, however, was the culture of saving and the legacy that he passed on to his children and grandchildren. On special occasions such as Christmas and birthdays, he invested a set amount of money on his children’s or grandchildren’s behalf. With this investment, his daughter was able to provide for her daughter’s schooling.

If South Africa is to develop a generation of financially savvy adults, it is crucial to not just talk about it, but actually practise good money habits. It is

Tips to Save Their Kid’s School Fees for Parent

Here are some tips below for parents to ensure that they have planned appropriately for their children’s education costs:

Start early

Parents should start saving for their children’s education as soon as they possibly can. Many people do not consider, or are not aware of, the great advantages of compound interest, and how accumulated savings grow over several years when invested properly. By investing from an early age, parents will eliminate the financial worry of not having sufficient funds to give their children the best education possible, as the funds in their investment will grow every year.

Automate savings

The best way for parents to ensure they are regularly contributing towards their children’s education is to open a dedicated savings account and set up a monthly debit order. This way the parents will automatically save money every month towards this cause. However, they must have a strict rule in place to never withdraw any money from this account if it is not related to the child’s education.

Explore ways to get discounts

It is advisable to do some research and contact schools to find out whether they offer financial incentives that could result in long-term savings. Many schools offer a discount if the fees are paid as a once-off amount in advance.

The Way to Make Huge Finance Gains

The Power of a Raise

Let’s say you currently make $60,000 per year and you’re able to negotiate a 10% raise (more on how to do this below).

Assuming that 25% of that new income goes to taxes, that means you now have an extra $4,500 to save each year, which is almost enough to fully fund an IRA.

Looking at it another way, that extra $4,500 represents a 7.5% return on investment, which is right in the range of what experts expect from the stock market.

So by negotiating a raise, you’ve given yourself a stock market-like 7.5% return. And unlike the stock market, that 7.5% return will be consistent year after year.

And if you’re investing that $4,500 each year, you’ll earn additional returns on top of your contribution. Assuming a 7% annual return, that investment will grow to $197,393 after 20 years and $454,828 after 30 years.

Plus the increased salary sets a higher baseline for future raises and for your salary at future jobs, making it more likely that your income will increase even further over time.

And all of that comes with pretty much no risk. As long as you present your case respectfully, the worst that happens is you get a no. And even then

5 Innovative Finance Products Launched

SmartRand

Developed by financial planning firm Galileo Capital, SmartRand is one of South Africa’s first ‘robo-advisers’. The online service gives anyone, with any amount of money to invest, access to advice and the ability to invest securely through its platform.

SmartRand takes users through a detailed questionnaire that assesses their risk profile and their investment goals before recommending a suitable product for their needs. It currently uses a selection of just five passive fund choices to keep things simple and the costs low.

Just Retirement

With the reform of the pension fund industry a government priority, Just Retirement’s ‘enhanced annuities’ offer potential benefits to anyone with a below average life expectancy. Since the likes of smokers or those with medical conditions have different risk profiles, enhanced annuities can potentially increase their retirement income.

Based on a telephonic questionnaire, Just Retirement assesses an individual’s risk profile and offers them an annuity rate based on that risk. It therefore moves away from the one-size-fits-all approach that is currently the norm.

RMB Krugerrand Custodial Certificates

A first in the world, Krugerrand Custodial Certificates give investors to own Krugerrands while enjoying the liquidity of an exchange. The certificates offer a low cost way to invest and store gold, with the option for investors to take

How to Invest the Long Run

Being an optimist myself, I don’t particularly like busting other people’s bubbles — we’ve had enough of those lately. Nonetheless, for my inaugural Long Run column, I have to begin on a negative note: Investing isn’t going to be easy the next few years.”For the long haul, we’re going to be in for a period of fairly tough markets,” says Ralph Wanger, manager of the ( ACRNX) Liberty Acorn fund since 1970. “You’re going to have to have substantial skill to prevail, because you can’t wait for the markets to bail you out.”If you’re still reading — indeed, if you’re still checking out TheStreet.com and other financial news publications — then the bear market hasn’t scared you away. That’s wise, because stocks remain investors’ best bet for the long haul. However, we are in a new era, only not the one people were touting a few years ago.From August 1982 to March 2000 — the greatest bull market in history — real returns averaged 15.6% a year, according to Jeremy Siegel in his book Stocks for the Long Run . That’s more than double the historical rate of equity returns. Regression to the mean hasn’t been fun.This doesn’t mean that you can’t make money. It simply means that the rules of the game have changed — and some

Consultant of Financial Planner

On my blog, one of the topics I like to cover is explaining how the personal financial advice industry works. Most people get financial advice from someone who is a salesman of insurance, annuities, mutual funds, and other products. You can also get help from someone whose main profession is something related like a CPA or lawyer who offer advice as a side business. The best way to get advice however, is from someone who functions as a consultant.

There are financial advisors out there that charge by the hour for financial advice. They often call themselves financial planners to distinguish themselves from financial advisors. You can find these financial planners through industry associations like the Garrett Planning Network and NAPFA.org.

I say it’s best to work with a consultant style of advisor because the consultant works only for you. Ask yourself what someone’s motivation is. A financial advisor employed by an insurance company or investment company (like Merrill Lynch, Morgan Stanley, Fidelity, Vanguard, etc.) has sales managers above them making sure they sell a certain number of contracts every month. You don’t want to be one of those sales targets. It may work out for you, and there are representatives who do look out for their clients, but ask yourself what their motivation is before signing anything.