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I have more than R5m to invest. How can I double it?

If you want to enjoy higher returns in any investment, you will need to have equity exposure.

I have more than R5 million to invest. Any suggestion or ideas with regards to how to double this? As you know, the return on interest and the banks have dropped. I am currently overseas but will return to South Africa this year.

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Dear reader,

There are a few details regarding the fund value I will have to know to be able to advise appropriately, but for the sake of answering, I will address a few principles. Depending on your personal situation the best investment option might be something different.

It will depend on your current age, the time frame you have with the investment, where the money is coming from, and whether the money is currently in South Africa or abroad.

Let’s start with asset allocation – if you want to enjoy higher returns in any investment, you will need to have exposure to growth assets (equity exposure). I believe in optimising an ‘all-weather’, resilient portfolio because we need to diversify among asset classes. One asset class is not a substitute for another.

They behave differently in different market cycles and should therefore be combined for the best performing portfolio consistently over time – by including cash, bonds, property, local and global equity exposure.

The growth assets will experience the most volatility in your portfolio, but they will also ensure the double-digit returns you are seeking over time.

Therefore, the only thing you will need is time. It’s not about timing the market – but time in the market.

The graph below illustrates the different returns the various asset classes have enjoyed over the different time frames:

Source: PSG Wealth

Source: PSG Wealth

Depending on your time frame and risk appetite, you could invest the majority of the portfolio in equity exposure.

If the funds are located in South Africa, and the funds are discretionary (not in any retirement vehicle), you will have the flexibility of increasing your equity exposure, but more importantly your offshore equity exposure too.

However, if the funds are in a retirement vehicle (such as a retirement annuity or pension, provident or preservation fund) you will have to abide by Regulation 28 of the Pension Funds Act, and will therefore be limited in terms of the maximum offshore and equity exposure.

If you are planning to return to South Africa, I would advise keeping the domicile of the investment in SA, as you will simplify your tax and estate duty by keeping the funds in your local portfolio, assuming you will at some point need these funds to live from at retirement. I would, however, advise diversifying offshore within the investment as well. This will give you the benefit of diversifying in terms of the economy, political environment, currency and fund managers, and provide access to many more listed shares and available funds to invest in compared to SA.

The final recommendation I would make when you have allocated your investment is to continue remaining invested, even during volatile times. The graph below illustrates how your investment value would have been different should you have missed just a few of the best days in the market:

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On these Readers Question Articles I have been told before that these questions are in fact real, so I will take it at that.

The reason I often question this is because of the nature of the questions. This one is the same. However when some one is trying to get money from you for an Investment of different forms this “doubling your money” is often used as a “hook” and it must work on certain individuals.

I think the answer should be “not possible” and that they should re-adjust their expectations as they are not stating their time line and when this phrase is being used I am pretty sure these guys are not looking at say a 9 to 10 year time line. I am also quite sure if you go and look at the MTI Global and other scams on MW previously some of the victims actually said that they looked at other investments but were promised to double their money and look what happened there.

I sent in a “reader’s question” about a month ago and it was just ignored, even though I am “real” as far as I know, so I don’t know what to make of these questions…..

Hi Daniel! Our apologies for the delay. We’ll look into this asap.

sê hulle Daantjie, sê hulle.

Oh dear Mr Jones! Doubling your money is child’s play these days if you are dabbling in the cryptocurrency craze.

Not entirely true.. And same goes for timing of the market. With being well read, having some time on your hands and access to internet, it is possible to more than double your returns by “timing” the market. I turned a potential financial crisis.. being retrenched in Nov 2019 into some what of a suceess. I generated over 1200% returns on Arcelormittal shares and over 550% on Sasol. It is possible, but not guaranteed.

Whether real or not… Doubling your money is 100% possible.

The question – as the writer said – is in what time frame.

By tomorrow? Well good luck.
In 3 years? Eish.
In some longer, more reasonable time frame – then the answers she posed seem quite reasonable to me.

Put your money in any interest-bearing bank account, and it’s almost assured that at some point in the distant future the Rand value will double.

Five years is feasible, reasonable and realistic.

A wise old friend suggested folding the money & putting it back in your pocket if you want to double it.

Investing it wisely may realise a healthy return, but you’ll need a lucky pic or two to double.

Why does everyone miss the “depends on the time frame” part?

At 8% growth p.a. it’s 8-9 years and you’ll have double. Assuming a decent portfolio and reinvesting dividends that doesn’t sound totally unreasonable to me.

Yep… but only if this countries economy has 8-9 years left and we are not carrying around R1mil notes to buy bread.

That final graph is the one that stands out to me the most.
Super interesting bit of analysis…

Essentially; Just stay invested as long as you can (& as long as your investments make sense).

But Echo Polska properties EPP

Thank me in one year.

You are welcome

Rule of 72.

10 years at 7.2% growth, after tax.

7.2 years at 10% growth, after tax.

True. a variation: you can double your capital in five years at 15% growth per annum, compounded. A bit more risk, but you’ll make it. Many instruments can give you this, if you do proper, extensive and and serious research and are willing to adjust your risk attitude (not profile, attitude).

Super article with great charts and reasoning. Thanks!!

Watch bitcoin price. If it increase to more than $100,000/btc by year-end and then ‘crash’ by dropping to about $20k-$30k, for me this would confirm the pattern and I think you are fairly safe to invest R5M at the low. Fairly certain that your R5M will not only double, but substantially increase in value in 4-5 year time period.

I’m not a supporter of BTC or owner of BTC but BTC performed quite well in the last major correction of March and November.

There are many other better performing cryptos out there. Besides, BTC is old technology now(1st generation, Etherm is 2nd generation, then you even get XRP/ADA and a newer one(3rd generation) Hedera Hashgraph (HBAR)

As a simple guide, an interest rate of 15% compounded will double your money in five years.

There are other combinations, of higher interest rates requiring less time, or lower rates taking longer.

If you don’t have the patience, you can (possibly) double your money today by going to a casino roulette wheel. But this carries a significant risk of not doubling your money.

Buy BTI (Bats) shares at R545 and get a R10 and more every 3 months.

Plus BTI is a Rand hedge share plus it can move to R750 easy.

I 100% disagree. Timing the market is one of the most important things. All stocks have cycles and it is critical to buy at the right time. (Maybe i misread her saying when she says it is time in the market that is more important than timing the market)
Even technical indicators will demonstrate this.
If you are 12 years in the market, you can have the same money as what you put in. (Example, October 2008 – KIO was R129, Dec 15, KIO was R40, Feb 2020, KIO was 280. However, if you time the market, you buy in March 2020 and by Oct you doubled your money in the stock)
With crypto, your cycles seem to be 2-5weeks, but now that the “skelm banks” start to lose money, they start to bad mouth crypto, as they struggle to manipulate all crypto.

Buy GBP or USD, have them offshore, care nothing for growth, play golf. The end

Well our High Growth Fund delivered X100 times client money in 21 years, meaning R1 000 000 invested then would be more than R100 000 000 today with similar risk as a typical Balanced Fund. Peregrine Capital, google it.

End of comments.

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