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Simon’s weekly wrap-up: When to sell, investment ideas and the economy reopening

Also, investing in renewable energy infrastructure, Easy Equities’ run, the impact of the best 25 trading days of the last 20 years, using ETFs to hedge the rand, and more.
Image: Supplied

I had Gary Booysen of Rand Swiss on the show on Thursday to ask him a hard question: when to sell [stocks]? He answered that it really depends if you’re a trader or an investor and had three great ideas for investors.

  • First, a liquidity event, in other words you need some cash. Stocks are quick cash in that you can sell today, and you’ll receive the money in three days. Most other assets take weeks if not months to turn into cash.
  • Second, when a portfolio becomes unbalanced. Say you held Sasol as 15% of your portfolio back when it was R50, now at R150 it’s almost half of your portfolio and to de-risk you’d need to sell some.
  • Lastly tax, using your annual capital gains tax credit of R40 000 is a solid tax move that reduces your taxable liability over time.

This past week saw flights taking off again and on Wednesday evening the president announced relaxing of restrictions in the conferencing, restaurant, cinema and beauty industries. This is expected to bring another half million people back to work and, while volumes will be nowhere near pre-Covid-19 levels, it at least starts getting some cash flow coming in for otherwise stranded leisure industry stocks. Also in Thursday’s podcast, FNB Wealth and Investment’s Chantal Marx discusses the further opening of the economy, while FlySafair’s CEO Elmar Conradie gives an update on flight resumption.

Locally-listed property continues to struggle even as we see foot traffic and store openings hit the 70% to 80% levels. However, Mia Kruger from Kruger International has a great investment option: renewable energy infrastructure as an investment. You get a blend of a listed property stock with a utility offering high yield and lower earnings volatility as most often these projects have multi-decade long off-take agreements in place.

Also on Wednesday’s podcast, CEO of Easy Equities Charles Savage had some amazing stats about its clients. After opening 12 000 new accounts in February it’s now opening over 1 500 new accounts per day. He also revealed that clients bought R1 billion of Sasol stock at an average price of R55 and sold at an average of R99, resulting in some R800 million profit for those clients.

Don’t ever believe the theory that the small investor can’t compete against the pros.

Other podcasts from this week:

LISTEN: RMB’s Matete Thulare on Sasol’s update and Curro’s surprise rights issue. Schalk Louw of PSG Old Oak on the best 25 trading days of the last 20 years and its impact on investment returns. Sun International’s Anthony Leeming on the gaming and hospitality industry opening up under advanced Level 3 regulations.

LISTEN: Nick Kunze and Greg Katzenellenbogen of Sanlam Private Wealth discuss Hertz stock which was up 250% and gold as an investment. eftSA’s Nerina Visser delves into using ETFs to hedge the rand.

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