Many retail investors are bombarded with ways to invest through exchange traded funds (ETF), most of which passively track an index.
The ETF platforms highlight how cheap they are, but in actual fact they aren't cheaper. If you have more than R80,000 in the account, its expensive. The ETF platforms charge between 0.35% and 0.65% ex VAT just for annual admin fees. That's on top of the other fees... ››› more
A week ago I was nearly convinced low-cost RA's are the way to go. I read a well written article on the web, promoting the virtues of low-cost RA's.
The article uses the following example:
Someone has saved R3 000 every month for 40 years into a retirement annuity (RA), and earns a return of 6.5% above inflation.
If you pay an investment fee of 3% you'd end up with R3 million at the end ... ››› more
Do you know the difference between minimum investing and low-cost investing?
Well, most investors would usually say they're the same thing. But this is far from the truth.
Low-cost investing deals with the investments associated with investing your money, while minimum investing implies the least amount of money you can invest.
In fact, failure to understand this can actually lead to... ››› more
“Francois: I read your article on using ‘buy limit orders' to buy shares at lower prices and decided to do it. But something seems to have gone horribly wrong. I tried buying R5,000 worth of shares with a limit price of 51c. But when I checked my account it only traded about R500 worth. My cost per share, after brokerage, is now 67c per share. What's going on???” - BM
The right tools, u... ››› more
Let's face it, investing has always been something for the richest 2%.
The minimum for opening share trading accounts at many stockbrokers is R10,000. Then there's the rule I've always stuck by, don't invest less than R5,000 in a single share…
That's all because of minimum brokerage costs. Whether you buy R50 or R5,000 of shares your transaction cost will amount to around R100. So only onc... ››› more
Essentially, there are three ways of buying shares: You can use the stockbroking services offered by your bank; you can do it over the telephone via a traditional stockbroker; or you can buy shares online using a share dealing service. Online share dealing is growing in popularity. Let's take a closer look at the ins and outs of online share dealing…
Online brokers offer ‘execution-only’ d... ››› more
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