Satrix Investing made easy

If you had invested in a share portfolio in the last 4 years you would have good reason to have a spring in your step.  Stock market portfolios have been growing a brisk rate and retirement portfolios are looking very healthy. If you are one of the folk that thinks that the stock market is way too risky then it's time to think again. Over the last 20 years the JSE has delivered average gains of around 19% pa after tax.

According to the Momentum/Unisa Household wealth report released in May this year, South African households saw a net wealth increase in 2013. This was achieved despite some significant economic setbacks. According to the report, household net wealth was estimated at R7 044 billion in Q4 2013, this represents a year on year increase of 10.1%. These figures may appear perplexing in view of the litany of negative economic influences that materialised in the last 12 months. While strikes, interest rate increases, petrol hikes, a weaker rand and a general slowing of local and world economies, stock markets have remained robust. The equity markets, and stronger property prices have been major contributors to the growth and resilience of Household wealth.

When you read about the truly wealthy individuals of yesteryear, like Getty and Rockefeller, they had one thing in common; they bought stocks when everyone was selling out.  This does not mean that you should rush out and buy up a load of cheap shares but it does mean that you should consider the stock market as part of a retirement portfolio. If you approach the market with caution and do your homework it is an excellent long term investment.

Choosing the right stock needs a certain level of skill and it cannot be learned overnight. You can buy books or attend courses to get some of the knowledge you need. The JSE an excellent introductory course on share trading but if you don't want to invest time in becoming an expert then there is another way to get your feet wet and it is called SATRIX.

At the end of November 2000 the JSE launched this new security into the market. It was the single largest initial public offering (IPO) to date by raising over R2, 6 billion.

Satrix 40 is basically an exchange-traded fund that gives investors exposure to the top 40 stocks on the JSE. These stocks also make up the ALSI 40 index (top 40 shares by market capitalisation or value).

By simply signing a monthly debit order for a fixed amount SATRIX allows investors to buy a single investment that is hugely diversified over the 40 largest South African listed companies. The paperwork is rather onerous but it is worth going through the process.

The attraction of this fund is that you can take a position in the JSE's largest capitalisation companies and receive their average growth. One SATRIX 40 security is priced at 1,000th of the ALSI 40 index (the average price of the top 40 stocks on the JSE). So this fund gives you an easy way to gain representation across the most conservative and therefore stable listed investments in SA. So say for example you had a portfolio of 12 shares ranging from low to high risk, SATRIX 40 could be considered as your 'low risk' element. There are other funds available in the stable and you should chat to your financial advisor about the other options.

If your debt is under control and you would like to start investing for your future, then signing up for this investment could be an important part of your long term investment strategy. You can invest a lump sum or put in cash on a monthly basis via a debit order. The great thing about this kind of investment is its flexibility; you are not tied into a fixed period and can sell out at any time. Although it is a flexible investment, it is not a good idea to view it as a get rich quick endeavour. You should adopt a medium to long term view.

This is a suitable investment for those who are risk averse but would still like to take part in the growth opportunities that the share market offers. It should form part of a long term balanced strategy.  In order to get more information on SATRIX you can log onto their website www.satrix.co.za

If you are interested in getting a Free Investment Quote please click here: http://bit.ly/1rlNu92