Decades ago, a family friend from the Eastern Cape was transferred to his employer’s US headquarters. He enjoyed a successful career and although now happily retired in Florida, keeps in touch with events “back home” and visits regularly. There really is no such thing as an ex-South African.
Our friend, naturally, is also a member of our tribe. Last night dropped me an email about our new $10,000 portfolio – asking whether he should invest a lump sum or “dollar cost average” by staggering share purchases over our usually recommended three months. It’s a question also being asked by other BizNews community members.
In principle, it is always best to reduce the timing risk when considering lump sum investments. Especially for SAs taking money offshore, because we have to contend not only with share price movements, but also the volatility of Rands being converted into hard currency.
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With the BizNews Shyft portfolio, however, we were unable to acquire fractions of shares. So with the portfolio capped at $10,000 it would be impossible to achieve sufficient spread via three $3,333 buying orders – ie the portfolio has 2 shares each in Netflix and Spotify; 4 in Microsoft etc.
So for practical reasons, the notional $10,000 was invested as a one-off purchase. Those who have the resources are advised to create their own “dollar cost averaging” by adding another $10 000 next Thursday; and then a final $10 000 a month later. That’s what I’ll be doing.
More for you to read today:
- Through cadre deployment, state capture continues unabated – Leon Schreiber. DA MP says the practice has remained ubiquitous under ANC president Cyril Ramaphosa. (video above)
- US Inflation Hit 7% in December, Fastest Pace Since 1982. Consumer price rise exceeded 6% year over year for third straight month
- UK slammed for ‘baffling’ response to SA expertise, as Omicron sweeps the world. Medical Brief says dismissive approach by the UK is now being strongly criticised in Britain.
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