Investments
There are many different options available to you when you decide it is time to invest. I would like to outline some of the more popular ones and detail some of the pro’s and con’s of these investments. Keep in mind that all the information available on this site is researched by me and is in no way endorsed by any financial institution in any way.
Cash Investments: This kind of investment is often a short term investment with the returns in the form of interest on the invested amount. Fixed deposits are an example of cash investments. These investments can be long term if you choose to keep your funds invested but due to the liquidity of these investments, the return is usually low. On the flip side, the risk is very low as well.
Money Markets: Many people also consider the money market to be another kind of cash investment. I agree to a certain extent although with an investment in the money market, the risks are a little higher than with, say, a fixed deposit at a major bank. As with fixed deposits and other cash investments, money market investments can be opened at any major banks. One thing to keep in mind with the money market is that you usually need a minimum investment of R20 000 in order to qualify on the money market.
Stocks and Bonds: Many people think that stocks and bonds are the same thing. They aren’t but they are similar. Bonds have a lower risk portfolio but the returns are lower. If you are investing for retirement, bonds may be the way to go as the longer your investment “lives” the better your ultimate return will be. Stocks on the other hand, require more active trading and you should have a firm grasp of how stock markets work and understand that the risks are much higher. On the flip side, if you invest well on the stock market, or if you are lucky, the return will be worth the risk. Many investors prefer to have a combination of stock and bond investments so that they might offset whatever losses you may experience.
Property: Investing in property is always a wise decision. Instead of paying someone else’s bond off by renting a property, you should look into buying a property of your own. At the end of the day, the mortgage payments may be a little higher than simply renting, but the property you occupy will ultimately be yours.