When and where to best Invest

The age-old question that clients want to know is, when and where to invest. Even though the question sounds simple the answer is a bit more complicated. Investments in principle, be it private equity, shares, unit trusts or cash linked all have a few things in common.

Your own capital or exposure is used to generate growth over time and your funds are in most instances managed by someone.

To arrive at a suitable answer about when and where to invest ask yourself these relevant questions.

• When would you need to access your investment, thus what is your investment time frame?
• What do you want to achieve with this investment and why do you want to invest in the first place?
• How well do you understand the risks related to each type of investment vehicle or asset class?
• What is your risk tolerance? How does emotions affect your view and decisions?
• What is your risk capacity? Can you afford to lose capital when investing for capital growth?
• How realistic are you when it comes to returns? Do you know what sounds too good to be true?
• Do you understand your real risks if you invest conservatively or not at all?
• Do you understand your risks if you reduce your initial investment time frame?
• What is the real impact of fees on your investment?
• What is your effective tax rate?
• Do you understand the real impact and risk of inflation?

All of these questions are important to answer when considering any type of investment.
Risks are not always equally rewarded and past performance is no guarantee for future returns.
Yet patience usually rewards one well over the long term.

To understand what type of investment will be best suited for your needs as well as your personality consult with a qualified professional. Together you should arrive at a suitable answer.

Jacques Hodsdon – MCom Tax | CA(SA) | CFP ® is a Director of Affluence Group and specialises in Investments, Personal and Business planning.
For enquiries contact, jacques@afgroup.co.za or 0823011332