A 17-year old matric student wants to save small amounts each month, but is confused by the investment world. He writes:
I am a 17-year old matric student, who is already looking to my future and wanting to invest.
I'm not entirely sure how to do this, as I would be looking to invest tiny amounts (R100-R150) each month, knowing that in the future this could help significantly.
There are many options that I have found on the internet, but I am not sure where to go.
So, please could you give me some advice on this matter, as it is something I'm interested in doing, but am a little lost about.
Gustav Potgieter (jnr) of Aurum Trust responds:
It is great to hear that you want to start investing from such a young age - maybe you will end up being the next Warren Buffet.
When looking at an investment, it is important to take into consideration the period for which you want to invest. The investment period is important for the simple reason that the impact of market fluctuations is smaller over longer periods.
If you are planning to invest for a short period of time - between one to five years - it is a good option to rather opt for conservative or stable funds as they will be likely to be less volatile than other fund options.
A good five to fifteen year investment option would be balanced or flexible funds. These funds must comply with Regulation 28. Regulation 28 funds are allowed to invest up to a maximum of 75% in shares.
More aggressive route
The more aggressive route to follow, would be to be fully invested in equity. If you are considering this route, you look at least to a 15 year investment term.
Unfortunately, your options are very limited with the amount available to invest, but start out with the options available, build up capital and then you can invest in a broader variety of investment vehicles.
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