CIARAN RYAN: Even seasoned investors have a hard time keeping up with the moving parts in the financial markets and the range of options available to them. You’ve got bonds, you’ve got stocks, you’ve got unit trusts, and much more besides. If you’re having a hard time understanding the local environment, multiply that complexity a thousand fold once you move offshore. Few people have the time or resources to track the tens of thousands of investment options available around the world.
GRANT MEINTJES: Hi there. Thanks for the call. Your primary first step is to understand what you are going to spend your hard-earned money on. I think most of us have a vested interest in the stock market already through a pension or provident fund, but, as we know, only 6% of people retiring will retire comfortably. You’d have to have additional investments or savings to make up that little difference to retire comfortably.
If you think about the stock market [last week], where Naspers and Prosus had a massive fall as a result of some political interference in China. If you had an ETF over the South African market it would be much smoother in the type of performance that you’re getting. If we start working, we invest in a provident fund or a pension fund that will be highly geared towards equity performance, because we know over multiple years that equity outperforms all other investment classes.
CIARAN RYAN: Grant, I just want to jump in here and talk about time horizons. Surveys have been done, and they show that very few young people are motivated by the word ‘retirement’. It’s a turn off. It’s far too far into the future for them. They are motivated by near-term goals. So if [they] talk about saving for a travel holiday or, if they’re married, for the children’s education, that’s something that they can get behind – or for a house.GRANT MEINTJES: Yes, you’re correct.
As you get into your thirties and you start acquiring assets, the risk profile of your investment changes, so you’ll diversify your portfolio. And as soon as you get into your last 10 years before retirement, that makeup of your investment product will definitely change to be more income-focused than equity-growth focused, because you’ve already achieved that equity growth in the first 20, 25 years of your investment.
GRANT MEINTJES: We have investment professionals – so someone who has multiple years’ experience in the market. They would’ve completed relevant degrees, investment management, chartered financial analysts, registered stock brokers or financial planners. They would sit down with you and look at your goals or your needs, and they would provide a product or a solution that meets those needs.