Correct - no guarantee but the kids still get to go to school because your strategy conserves 90% of the capital and that's enough to send them to school with a bit of borrowing. At least you have not tossed a reward opportunity out the window by not trying.
Surely you shouldnt be risking your kids school fees at all. Their education must surely be a base need. Even for a 20-30% gain on R100K, to me that isnt enough reward for the risk of not being able to send them to a good school - which for R100K - it must be...well an expensive school at least...unless you have 15 kids....you get the idea. Take risk and trade with capital that you can afford to lose. That's my HO.
Pay the school noe get a 10 to 15% upfront cash discount...then put the balence into Satrix ..if you do that each year..before long you will have enough to either skip a payment or better still pay the varsity fees from the starix fund.. as Varsity is much cheaper then private schooling..and if that is not neded its a very nice lump sum to send them out into the world with!
If the 100k is so important to you (you need to set it aside for the kids school fees...,) on might assume that this is a major portion of your capital base. If that is the case, you really shouldn't be on the market at all unless you are slowly introducing monthly packets into dividend yielding high-quality issues.
Do I understand you correctly, if I can tolerate a 10% loss you can get me a 30% return? How can I get hold of you and what's the catch? I only need R80k for actual school fees the rest is for other school related expenses.
@ John - that is an excellent point - glad someone remembered. You get 10-12% odd for no risk by paying off your bond. Far better that trying to risk 15-20% on the market. Assuming you have a bond that is.