I have just sold a property and the return is about R900000.My question to all u clever guys is where to invest it.I do not trust the stock market just know as i feel it is due for a correction or even a big fall in the longer term.i therefore would like to gradualy fase it in.Where do i then park the money short to medium term for a save investment with best return.
Speculation, the rands as strong as it should be, there is a massive appetite internationally for emerging market exposure and we're pegged as one of the least risky ones to go to. A succesful world cup probably also helped to stoke this view. Problem is, its a very unstable position, the elastic is stretched. On that note, if you just leave it in your trading account you'll beat year on year inflation as it stands at the moment, thereby earning a real return, safes short term option in my book, but thats if your short term = my short term.
NEVER TRUST WHAT YOU "FEEL" ABOUT THE MARKET. Everybody "feels" something. The problem is we all tend to feel the same thing; which negates the perceived advantage. Buy stocks at valuations that are compelling. There is plenty of value in the market - just not so much in the "hot" stocks. As with the 3 rules of property (sic. location, location,location,) buy quality!
whats your time horizon? i would invest R75k per month for the next 12 months. each month put R15k into 5 blue chip multinationals listed on the jse (BAT,SAB etc) with good emerging market exposure (i also like mtn, bidvest and billiton) which also pay decent divs. this phasing in should be more adavantageous if you fear the risk of a correction from current levels.
Thanks for all the comments.I think my plan as follows.Daugter just bought a new house.Change her bond account to a revest account.Borrow the money to her at 7.7%(same as she is paying the bank).Take the interest monthly and invest in stocks.Every time there is a big correction buy stocks for about R50000.
I wouldnt go back into property yet. I dont see the rand crashing but Id hedge my bets. Gets SARS clearance and move some offshore. Internaxx allow you to buy equities on many other exchanges. If you like mining copanies like myself you get exposure to the TSX in canada where a lot of the junior miners are (although junior miners come with risk). Id advise some precious metals as an inflationary hedge too. Given the money printing by all central banks you wont go wrong in the long term. As far as local equities go I feel they are overpriced (in fact most world markets are) so I would hold some cash and wait for a pullback.
Whatch out for tax implications here - if SARS gets wind of it, you could end up with a fairly *****py investment. As for how to invest the 900k, this is where value investing steps up to the forefront - because a value investor first and foremost looks after capital preservation. Momentum based, buy the winner strategies requires a phased in approach, IMO, but value or contrarian approaches, look to minimize the downside risk - both through diversification (although Buffet argues against too much diversification) as well as through careful share selection. As a share tip, check out hte life insurers. Big dividends, healthy cash, stable businesses and all on relatively low PE's
What about an allan gray stable fund unit trust - you can invest directly with them so no broker fees and then your got a nice investment in money markets, bonds, property, commodities, Equities as well as Hedged Equities... hassle free
Just buy Gold and Silver Bars.Pack them away,safe.Get a Landrover. Go Fishing till Gold hits $4000 and Silver $100.then Sell everything.Simple stuff.You're in the country where the currency is going to get hammered sooner or later. And I mean...H-A-M-M-E-R-E-D ! The more it gets nailed, the more Rands you make.And there you go.These mkts are for Pro Traders only. Why ? Broken System.now entering the wildness of a Hyperinflationary environment.You want to play there ? NO...you don't.Just buy Gold and Silver bars.Cheers.