“I've freed up R500 per month and would like to invest this amount every month in a unit trust account, but I don't know anything about unit trusts, how they work or who to contact to do this,” writes Thami. Maya replies: This is an excellent...
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Jargon buster: outperformance
The best way to define outperformance when it comes to investing is by way of an example. In the investment world, a fund manager aims to outperform a specific benchmark that his or her fund's performance will be measured against. In that way, a...
How to buy ETFs
It goes without saying that not all Top 40 exchange traded funds (ETFs) are alike. You need to consider what you expect from them before you include them in your portfolio. As with unit trusts, ETF managers use the Top-40 benchmark for their...
The RAFI explained
RAFI-based products, particularly ETFs, have made a good showing recently and people want to know more about them. RAFI stands for "Research Affiliates Fundamental Indexation". Research Affiliates is a California-based financial services company...
We really do want clean, green products
If you could choose to buy products from companies supporting fair trade and campaigning to end testing on animals and child trafficking, would you do so? What about companies that reduce their carbon emissions and opt for cleaner, greener...
Jargon buster: Alpha vs. Beta
Andrew Kemp, head of asset consulting at Liberty Corporate, gives Maya on Money the low-down on Alpha and Beta. Maya on Money: What do Alpha and Beta mean to an investor? Kemp: Alpha and Beta are two investment terms which are often bandied around...
What you need to know about trading derivatives
When the JSE partnered with Deutsche Bank to launch International Derivatives (IDX), an asset class allowing South African investors to trade single stock futures (SSFs) on internationally listed companies, investors revelled in the opportunity to...
Why is life-stage investing a good idea?
Simply put, investing when you're 20 and investing when you're 45 are two completely different ball games. It's good to know that, increasingly, retirement funds are taking this into account and offering members a "life-stage" investment option,...
Investing for inflation: part two
The first choice for most retirees is to purchase an inflation-linked annuity that will pay a set income for life that increases with inflation. This provides predictability and you know that you have enough income to meet your needs for the rest...
Investing for inflation: part one
It's no secret that inflation is set to rise. This is bad news for everyone, but especially for pensioners, who need their retirement savings to generate an adequate real return while preserving capital, or at least minimising the risk of loss....
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Jargon buster: absolute return funds
Rob Zagey, manager of fund research and development at Stanlib, explains what Absolute Return Funds are. "Absolute Return Funds are unit trust funds that use a variety of investment strategies to accomplish the following: Target a return over a defined investment time...
Why socially responsible investing affects you
The environment wasn't the only thing to suffer with BP's oil disaster. Investors – including more than 1 000 institutions that owned portfolio stock in BP to the combined asset value of $2,7-trillion – took a serious hit. BP lost more than half its market value,...
What should be in my financial plan?
Pay off debt: It is always best to pay off high interest debt like your credit card. If you want to use your credit card for convenience set up a debit order so that it is paid in full at the end of every month. Emergency fund: Everyone should have an emergency fund....
How do I start investing?
You need to take your personal circumstances into consideration but here are some points to consider: Beware of cash: Over time cash will not keep up with inflation so unless you are only saving for one or two years, it is best to invest in a growth asset like...
Deciding between a unit trust or an ETF
I recently wrote about how a R200 a month investment became worth R35 000 by just investing investing in Satrix 40, an index-tracking exchange traded fund. I mentioned that the returns could have been even better if I had selected one of the top performing unit-trust...
The secret to creating wealth
Earlier this week I was interviewed on radio about savings accounts for children. I related a story about the savings account I opened for my son -- a story I have written many times. For the last eight years I have invested R200 a month into Satrix 40, the latest...