Schalk Louw | Be careful not to lock in your investment for too long | Fin24

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We are facing a number of significant future interest rates hikes. Tying up your money for a prolonged period of time may therefore not necessarily be the best option, writes Schalk Louw.

We are facing a number of significant future interest rates hikes. Tying up your money for a prolonged period of time may therefore not necessarily be the best option, writes During these past December holidays, I learnt a valuable lesson about ageing. Don’t get me wrong, I am still quite young and I don’t see a grey hair on my head. Not because I don’t want to, but because my eyesight has deteriorated.

Long story short, we did end up taking the scenic coastal route, it wasn’t really that much longer, and it was at least 200% more beautiful.This week I was asked about investing in a 60-month fixed deposit account.

If the QPM forecast turns out to be correct, however, we are still facing a number of significant future interest rates hikes. Tying up your money for a prolonged period of time may therefore not necessarily be the best option.

According to the ASISA classification, the main difference between a SA Interest Bearing Short-term and a Variable Term Fund, is that SA Interest Bearing Short-term funds"invest in bonds, fixed deposits and other interest earning securities which have a fixed maturity date" and they are"less volatile and are characterised by a regular and high level of income".

 

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