I would like to get the best investment return on a R4 million lump sum. Where should I invest these funds? I will not need this, hopefully, in the near future. Francois le Clus Profile Mail Dear Reader,Your question is a simple one, but there are multiple considerations and no one definitively correct answer to the question. The reason is that you will need to consider your risk tolerance, risk capacity, time frame, tax considerations, need for liquidity, and so on.
Next, you need to look at your capacity to take risk. Risk capacity, unlike tolerance, is the amount of risk that you ‘must’ take to reach your financial goals. If your investment horizon exceeds 10 years, your capacity to take risks will be more than an investment scope of three years. You will need to match your risk tolerance with your risk capacity to achieve a happy medium.I have compared four different funds from the same fund manager below. The light black line is a money market fund.
The most important thing to remember when investing in a long-term fund is to stay invested, never make emotional decisions, don’t ever sell when the fund is down, and stick to your game plan. As a South African citizen, you are allowed to invest up to R11 million per year offshore. The first R1 million can be taken without a tax clearance from the South African Revenue Service . But the remaining R10 million requires a tax clearance. If your R4 million is already in an offshore account, you will not have to request clearance and you may directly invest into an offshore investment such as offshore unit trusts or offshore endowments.
Another option would be the offshore endowment which is a linked investment plan. These investments are made up of a variety of individual equities as well as offshore unit trusts spanning all asset classes. Unlike regular endowment plans, certain offshore endowment plans allow you to make 100 withdrawals during the restricted period as opposed to only one before maturity. Individuals must pay CGT at a rate of 12% on all realised gains from stock trades, switchovers, and withdrawals.
attooh Firstly, why would you wanna come back?