Smart, 25 and looking for share investment ideas

houseLaura sent this email: I am a regular follower of Moneyweb and more recently your blog. I enjoy the more personal articles and am in awe if your success. I was sad to learn of (your son) Travis’ passing, as we were in the same class for a few years at Mondeor Primary. He really had a great mind.

I have a keen interest in the financial markets being an actuarial analyst at one of the banks. What is your opinion of how the markets will fare this year?

On a more personal level, with what I studied and my own stubbornness, I have yet to consult a financial consultant regarding my finances. I currently invest monthly in a unit trust and some Satrix funds. What shares would you suggest for me as a 25 year old to start a good investment? I considered a buy to rent property, but I didn’t want to worry about maintenance and upkeep. I now am in the market for a small property for myself. I have a deposit saved up but think it is time for me to start investing in some shares as well.

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Alec replies:

Hi Laura

Good to hear from you. I miss Travis terribly but with great affection. He was the kind of son any father would be privileged to have known. I learnt much from him, perhaps most from his passing. I’m sure he’s resting peacefully. Delighted to see the Mondeor Primary graduates continue to do so well. Your headmaster Dave Shute was an unsung hero. Sadly, educationalists so often are.

On your investment questions, one never knows with markets and a year is a long time. But all the guys who do it for a living think there’s a lot better value offshore than in SA right now. Had a fascinating chat to Investec’s John Biccard today. His Value Fund is busy polling its unit holders to increase the percentage it may hold offshore. He started moving in that direction in September 2010. As John is one of the best you’ll find, I’d take heed.

Starting your own share portfolio is a brilliant idea. It might be an idea to invest through the JSE’s IDX programme into the global pharma majors like Glaxo and Bayer; and also my favourites Berkshire Hathaway and Apple. You need a local flavour, too, and here right now I’d be with Barloworld, Bidvest and Afrimat. Satrix is also a good place to keep some money.

If you’re thinking of property, there’s really no rush. The buy-to-let market is likely to bump along the bottom for some while yet. Best to invest there when the interest rate cycle peaks and rates haven’t even started rising yet. Similarly with your own home. Take your time. It’s very much a buyer’s market and will be for a few years yet.

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