Investing for your future

With world markets currently posting flat or sluggish investment returns, you should not be fearful of investing your hard earned money to provide for your future. Meeting with an accredited advisor will enable you to develop an investment strategy to meet your goals and most importantly identify the best products to get there and manage your expectations at the same time. A full analysis will help identify your personal tolerance to risk i.e. are you prepared to lose some money over the short term to have better returns over the longer term.

Timing the market

When an investor tries to time the market they want to buy (invest) and sell at exactly the right time to maximise profits and avoid making losses.

These investors try to buy shares or unit trusts when the prices is at its lowest and then sell when the price is at its highest. Very few of them get it right consistently as nobody knows which way the market or investment will move.

Whilst it is normal to want to make money with an investment, timing the market is generally not a recommended investment strategy.

It is easy to fall into the trap of trying to time the market, which is impossible to do. Instead time in the market is key.

Time in the market

Time and time again it has been proven that it is wise to spread an investors risk through diversification in a longer-term investment strategy know as 'time in the market'.

From time to time, markets can experience high volatility resulting in constantly fluctuating share prices that can result in investors being fearful and selling their shares at the wrong time thereby making a loss.

Those investors who are patient and understand that this normal stand to benefit most as they have the opportunity to purchase more shares at lower prices and make greater returns once the market recovers and prices rise.

Popular Investment Platforms

Unit Trusts

Unit Trusts, also known as collective investments, are popular investments whereby investors' money is pooled into a fund of shares managed by professional fund managers. Investing in shares can be expensive so Unit Trusts allow people to get into the market at a much more cost efficient level.

Because your money is often spread across many investments, the risk of major losses is relatively low as not every share price in the fund would be expected to drop at the same time.

Due to Unit Trust funds being diversified across different investments and geographical regions, there is no guarantee that you will not lose money, however remaining invested for at least a 5 year period with the correct investment strategy will generally produce a positive return.

Flexible Investment Plans

Flexible Investment Plans are commonly used to invest monthly contributions or lump sums for a minimum 5 year period into unit trusts through a single entry point.

Investors have access to their funds at any time with the ability to start, stop, increase or decrease their contributions to suit their personal circumstances.

Contributions into the investment are not tax deductible and investment gains will be subject to tax at your individual rate of tax taking your rebates into account. It is your responsibility to pay the tax on your Flexible Investment Plan.

In the event of your death whilst invested in a Flexible Investment Plan, the investment will be payable to your estate.


An endowment is an investment plan that helps you save over the medium to long term. This type of investment offers estate benefits and tax efficient structures and a choice of investment funds through one entry point.

Under current legislation, the minimum investment term is 5 years after which you have the choice to take the proceeds, continue investing or make the policy paid up.

All of the necessary taxes are taken from within the investment so that at maturity, the proceeds are payable will become tax free. This is therefore a very tax efficient structure if you have an average tax rate of 30% or more.

You also have the choice to nominate a beneficiary to receive the proceeds of the policy on death.

Tax Free Savings Accounts

Saving is an important part of planning for your future. The Income Tax Act allows financial institutions to offer a tax free savings account to investors. This means you don't have to pay tax on any growth on the amount invested in your tax free savings account.

You can invest up to R33,000 annually with a lifetime limit of R500,000. Should you decide to make any withdrawals from the account during the tax year, this cannot be replaced.

Investors have a comprehensive range of investment funds to choose from.

Offshore Investments

Investing offshore opens up more investment opportunities to you. When you diversify internationally, you get access to a much wider range of investment opportunities to grow your money across countries, industries, companies and currencies.

Spreading your investments across markets and currencies also minimises the impact of currency depreciation or specific political or market events on your wealth.

As an investor you should not adopt an investment strategy that focuses purely on South African assets.

Guaranteed Return Plans

Guaranteed return plans give you the benefit of knowing exactly what your investment will be worth at the end of its 5 year term. These are low risk investments well suited to volatile times.

Investors have the choice of either a guaranteed growth plan which invests 100% of the capital and pays out a pre-determined amount at the end of the term or a guaranteed income plan which provides a guaranteed income for 5 years as well as a reduced guaranteed cash lump sum at maturity.

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