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03 February 2012 00:39

Equities look promising

There are opportunities those investors who are willing to face some short-term volatility.

The current economic environment remains challenging and both economists and investors find it difficult to know what to expect. In spite of this, there are opportunities for those investors who are willing and able to face some short-term volatility.

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01 February 2012 06:02

Beware of yield chasing

Money market funds lost almost R9bn during the quarter ended Dec 2011.

Investors appear to be acting smarter when it comes to earning income as the prevailing low yields start to hurt. According to the ASISA unit trust flow statistics for the quarter ended December 2011 and released last week, the category of unit trusts that attracted the highest net inflows was the fixed income – varied specialist sector.

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31 January 2012 11:43

Beware of yield chasing

Investors need to do their homework.

Investors appear to be acting smarter when it comes to earning income as the prevailing low yields start to hurt. According to the ASISA unit trust flow statistics for the quarter ended December 2011 and released last week, the category of unit trusts that attracted the highest net inflows was the fixed income – varied specialist sector. Considering their better yield due to fixed income - varied specialist funds being permitted to own real estate, listed debentures and even up to 5% in ordinary equities, their high inflows are perfectly understandable and perhaps even a little overdue. However, what investors and their financial advisors need to watch out for is irrational yield chasing.

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31 January 2012 11:35

ETFs are low cost

..but beware the downside.

Exchange traded funds (ETFs) have become popular because of their low cost and simplicity.  In addition, proponents of ETFs point out that the average active fund manager typically fails to outperform the market. 

However, they neglect to mention that because an ETF owns the same shares as a given index, such as the FTSE/JSE All Share Index (ALSI), it can never outperform it and when the index goes into negative territory, so will the ETF that tracks it.

The argument that the average asset manager fails to outperform the market is a little hollow as there are plenty of managers that do, particularly in volatile markets.  Granted, it can be difficult to choose the right manager, but that’s where a professional, independent financial adviser can help

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29 January 2012 06:40

Your RA has more advantages than you think

They offer the potential for tax and estate duty savings.

Retirement Annuities (RAs) offer more than just the opportunity to make additional provision for retirement;  they also offer the potential for tax and estate duty savings.  And the good news is that there is still time before the commencement of the new tax year to make additional payments into an RA in order to reap the benefits this year, or to begin investing in an RA if you haven’t already done so.

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