My Current Investment Strategy

I’m still learning the stock market and investments. So far, so good. I’m making a better return on my investments than leaving that in a bank account with a flat yearly rate.

If you’re interested to starting investing like I have, but haven’t started and it’s all “French” to you. Be sure to check out my getting started article.

As mentioned previously I am still learning how to understand the stock market to try and make more confident decisions when investing in a business. Currently I’m working on building up my Tax Free Savings portfolio (South African’s, I’m looking at you).

Please note that I’m not a financial advisor and just wanted to share my findings on my own research. Please seek professional financial advice if you are uncertain on where to invest your funds.

The goal of my investing is to hit a minimum of 15% per annum.

My Investing Ratios

One rule I live by when investing is, use money you’re okay with losing. My wife and I have a general savings account (and other ‘normal’ savings) that we can easily access our money and we’re blessed enough to be able to invest the surplus cash we have ‘left over’.

Surplus Cash

The surplus cash comes from reducing some of our ‘wants’. For example, I buy less video games each month as I have such a huge backlog of titles to get through, reduce eating out and of course lockdown has helped. Instead, let’s turn that into profits.

My ‘Golden’ Ratio

I’m working on building up our Tax Free Savings Account (TFSA) investments as part of our retirement plan. With the TFSA, you are able to purchase ETF’s which is a great starting place for beginners to get into the stock market.

Each month we invest in a couple of ETF’s and I like a 60/40 split between certain ETF’s. 60% international ETF’s and 40% local ETF’s (sometimes I stray from this and do even more in the international indexes) but this should be a good place to start with, it’s been good to me (so far).

Here’s a couple of ETF’s I follow:

Satrix S&P 500
Satrix Nasdaq 100
Satrix MSCI World (this is my latest one I’m following)
~~Satrix Top 40 (local)~~ I’ve put a pause on this ETF for now and looking at Sygnia 4th Industrial Revolution Global ETF

Now with ETF’s, you get multiple ETF companies that have the same underlying indexes. I chose to go with Satrix because they’ve been around for 20 years – please leave a comment below if you have any company you’ve gone with that was a winner and what ETF.

For example, I may invest R2000 a month and I would break up around R1200-R1500 between (or in a single) international ETF’s ~~and the~~ r~~est I’d invest in the Satrix Top 40 ETF~~. All gains from these investments are tax free and as of this writing I’m sitting at around 15.8% profits for YTD and already over the yearly goal of 15% (However this is not guaranteed, and can be much less than 15%).

Some Useful Information

I invest using Easy Equities, they give you access to a couple of markets and even properties (more on properties to follow suit).
TFSA allow R36,000 deposits per year (and R500,000 lifetime – which is around 14 years at R3,000 per month). If you’re investing less than R3,000 a month this may be worth it.
Target here is to reach 15% minimum per annum compounding for 30 years (for retirement).
Do a little reading about the ETF’s and find which ETF you are interested in/what businesses in the ETF you’d really like to own (I just look at the top 10 companies).
ETF’s reduce risk as your funds are backed by 40-500+ companies across multiple markets.
Invest in an ETF that works for you, don’t just invest in the one’s I’ve mentioned.

There is a lot more that I’m doing with investing, ETF’s are currently my ‘major’ investments and I’ll be sure to blog other opportunities that I am trying out or that I find worth-while. Do not hesitate to leave any comments down below.

Photo by ian dooley on U nsplash