Experiment: Am I smarter than a fund manager?

Fund managers build an investment fund by investing in many shares they feel have long-term growth potential. Even with their hard work most equity funds are outperformed by the equity index in South Africa (the JSE ALSI), this means that rather than investing in a fund managers unit trust you would be better off putting this money in all the companies comprising of the index these funds are trying to beat. This is usually done by buying an ETF product.

So I wondered to myself how would I stack up against the many equity funds offered by fund managers in SA by creating my own investment portfolio based on a pure random method of selecting the shares which will make up this portfolio.
I do understand that equity funds offered by fund managers are long-term investments so comparing only ones year of returns is not the ideal comparison but I think it will still have a story to tell. There is also a possibility to run this experiment over more than one year and change my shares based on a …

Biggest Lessons of the Year - 2017 is a wrap

It is the last day of the year and what a year it has been. Although short of water I am not short on lessons learnt this year and I want to share some of the biggest ones I experienced this year with you:
Time rewards generously
Finally, 3 years of sideways movement from JSE market has finally broken with the all share index giving us a 17% return for the year. Many of us in the market would have felt a bit anxious that this trend could continue even longer and would be glad that it seems to be past us.
Many of our top40 companies on the JSE earn their money internationally and these were the companies which showed most of the gains this year, although there has been a surge at the end of the year in South African based shares.
The rand has also strengthened about 10% to the dollar this year, meaning in dollar terms our markets gains are even greater.
Despite all the negative sentiments towards investing your money in South Africa over the last few years and urges to send all your money…

Shares, Shares and more Shares

Buying shares is something many people find daunting. They associate the stock market with trading and losing money, with big market crashes and daily noise which can sound exceedingly complicated and volatile. At the end of the month after their house repayments/rent, car repayments and large family expenses many people are reluctant to put money into something which they feel is very risky and requires vast amounts of knowledge.
I agree that you shouldn’t put a significant amount of money into the market (or anywhere for that matter) knowing nothing. I do however recommend that the story shouldn’t end here. Everyone starts with exactly zero knowledge of this subject at some point in their lives, but what is important is that you start a journey of learning. I know that not everyone’s circumstances are equal and it is considerably more difficult for some people to learn this area than others, but it is really something that every single person should do at some point in their lives.

Bitcoin - the only certainty is uncertainty

Everybody has noticed Bitcoin. At this very moment many people are talking about it over lunch with their colleagues or around the braai with friends (probably one of the more dangerous places to get financial advice).

After a period of hype in late 2013 cryptocurrencies in general have once again become a big talking point and are receiving deserving attention as a completely different way to transact by cutting out the usual financial institutions and banking systems. This allows for transactions to be completed within minutes rather than days through a system called a blockchain. Someone from another African country and working in South Africa could use a system such as this to send money back home from their cellphone without the need of a local bank account to facilitate these transactions. The market cap of cryptocurrencies as a whole has grown exponentially in the last year by gaining over 600% as seen in the chart by coinmarketcap below:

Bitcoin isn’t the only horse in this race…