Showing posts with label Standard Bank. Show all posts
Showing posts with label Standard Bank. Show all posts
Friday, October 22, 2010
Saturday, January 24, 2009
Novice investors
One of my friends is involved with an amateur investment club which involves a couple of ladies getting together, pooling
some funds together, trying to educate themselves about the market and with any luck making a few bucks on the side.
All in all I think this is great but I wanted to maybe post something for novice investors to consider because of something
she said. I asked her how it had been going and she told me that they were down nearly 30% and then said: "Everybody is down
30% because this is how far the JSE has fallen and we just needed to accept this is part of the function of being
invested..."
I pointed out to her that they are using "Shares" as a very broad term and not all instruments on the JSE were down 20 - 30%
in 2008 which piqued her interest in a little.
She got the idea that certain shares were down less than others but didn't understand that there was access to different investment classes on the JSE - some of which had produced a positive return without actively shorting the market.
Preference shares
I'm not going to touch on the mechanics of preference shares too much here but I thought I'd use them as a way to highlight the difference an instrument can make when assessing a particular investment (provided you understand the role they play in YOUR portfolio).
But here was the example I gave her:
Standard Bank ordinary share with a dividend yield of around 4% in 2008 lost around 14% from 1 January 2008 - 31 December
Grindrod ordinary share with a similar dividend yield lost around 30% once you took the dividend yield into account
In comparison
The Standard Bank preference share (dividend included) returned +13.95%
The Grindrod preference share (dividend included) returned roughly a 4% loss
Proves that not everything got wiped out despite popular belief
Property Unit Trusts
I enjoy these as an asset class and if one considers that GrowthPoint returned approximately 5% positive (distribution included) and ApexHi returned about 4.7% positive then it shows that some asset classes did in fact do ok in 2008.
Exchange Traded Funds
Just picked a few here but the X-Tracker (DBXJP) tracking the Japanese market lost around 12% compared to the 26% lost by Satrix 40.
The ZGovi (tracks SA Bond Index returned 12.5%) in the 3 months its been listed (including the turmoil in October) while the NewGold ETF (GLD - which tracks the Gold Price) returned just under 40% - not too shabby Nige...
Even that Carbon Credit note (+5.5%) so far has had a positive return despite the fall in the market...
Conclusion
This isn't a punt to buy any of the above. The point I am trying to make to novice investors is that a lot of people have been scared off by some of the media whores showing how terrible things are in the market, but not focusing on some of the well managed portfolios or products that have in fact held their own despite falling markets.... These are also not instruments you need to watching 24/7 worrying about volatility wiping out your investments.
It all comes down to education and if you can educate yourself you'll quickly learn not to tar the words: "Stock market" and "Investments"... Yeah the market got killed last year but there are asset classes that went up in some cases - the idea is to try and educate yourself to see opportunities and diversify the risk...
some funds together, trying to educate themselves about the market and with any luck making a few bucks on the side.
All in all I think this is great but I wanted to maybe post something for novice investors to consider because of something
she said. I asked her how it had been going and she told me that they were down nearly 30% and then said: "Everybody is down
30% because this is how far the JSE has fallen and we just needed to accept this is part of the function of being
invested..."
I pointed out to her that they are using "Shares" as a very broad term and not all instruments on the JSE were down 20 - 30%
in 2008 which piqued her interest in a little.
She got the idea that certain shares were down less than others but didn't understand that there was access to different investment classes on the JSE - some of which had produced a positive return without actively shorting the market.
Preference shares
I'm not going to touch on the mechanics of preference shares too much here but I thought I'd use them as a way to highlight the difference an instrument can make when assessing a particular investment (provided you understand the role they play in YOUR portfolio).
But here was the example I gave her:
Standard Bank ordinary share with a dividend yield of around 4% in 2008 lost around 14% from 1 January 2008 - 31 December
Grindrod ordinary share with a similar dividend yield lost around 30% once you took the dividend yield into account
In comparison
The Standard Bank preference share (dividend included) returned +13.95%
The Grindrod preference share (dividend included) returned roughly a 4% loss
Proves that not everything got wiped out despite popular belief
Property Unit Trusts
I enjoy these as an asset class and if one considers that GrowthPoint returned approximately 5% positive (distribution included) and ApexHi returned about 4.7% positive then it shows that some asset classes did in fact do ok in 2008.
Exchange Traded Funds
Just picked a few here but the X-Tracker (DBXJP) tracking the Japanese market lost around 12% compared to the 26% lost by Satrix 40.
The ZGovi (tracks SA Bond Index returned 12.5%) in the 3 months its been listed (including the turmoil in October) while the NewGold ETF (GLD - which tracks the Gold Price) returned just under 40% - not too shabby Nige...
Even that Carbon Credit note (+5.5%) so far has had a positive return despite the fall in the market...
Conclusion
This isn't a punt to buy any of the above. The point I am trying to make to novice investors is that a lot of people have been scared off by some of the media whores showing how terrible things are in the market, but not focusing on some of the well managed portfolios or products that have in fact held their own despite falling markets.... These are also not instruments you need to watching 24/7 worrying about volatility wiping out your investments.
It all comes down to education and if you can educate yourself you'll quickly learn not to tar the words: "Stock market" and "Investments"... Yeah the market got killed last year but there are asset classes that went up in some cases - the idea is to try and educate yourself to see opportunities and diversify the risk...
Thursday, October 23, 2008
Carnage continued
But I don't understand - the fund managers promised us we were "near the bottom" and South Africa was insulated from the rest of the world.
They told us Gordon Brown was a HERO who had saved us from financial armageddon. Everytime he came on to TV I heard Tina Turner blaring out the Mad Max soundtrack.
I don't understand what went wrong....
Ok that was me taking the piss because its Friday.
Some pretty spectacular stuff yesterday. Gold index lost another 5.6% and we now have the platinum price within 100 dollars of the gold price and both are continuing to head south... So much for the "safe haven" theory for now.
Currencies are all over the show and problems in Argentina, Russia and other emerging markets is proving to be a bigger problem than most people expected.
The All Share index dropped below 20 000 points for the first time in a long while and if you're trying to pick a bottom to this then you're a braver man or woman than I am.... Ever tried to catch a falling piano??
Here's a hint - D O N T
That DBXJP X-Tracker has held up nicely actually moving ahead of where I bought it. That I suspect is largely a function of currency moves but I'll take the security its provided.
For the rest things look a little messy and the deluge of selling pressure doesn't seem to want to let up.
I'm pretty sure there are pockets of value out there. Things that look good to me include Standard Bank, Absa, Tiger Brands, Pioneer and PikWik. They're all pretty defensive, even if the banks do take some pain the next few weeks.
I also quite like the Mvelephanda Group (MVG) story. They're a nice diversified group and yet the share price has also been under a lot of pressure now. I bought MVG at around R5.60 and its now sitting at R4.90 (after paying out a dividend and special divvie). I think there is value in this story.
But if you are buying short term and you expecting the market to stage a big turnaround then like I said - go and stand underneath Ponte and have a mate drop a piano toward you - if you can catch it then we MIGHT have hit the bottom...
They told us Gordon Brown was a HERO who had saved us from financial armageddon. Everytime he came on to TV I heard Tina Turner blaring out the Mad Max soundtrack.
I don't understand what went wrong....
Ok that was me taking the piss because its Friday.
Some pretty spectacular stuff yesterday. Gold index lost another 5.6% and we now have the platinum price within 100 dollars of the gold price and both are continuing to head south... So much for the "safe haven" theory for now.
Currencies are all over the show and problems in Argentina, Russia and other emerging markets is proving to be a bigger problem than most people expected.
The All Share index dropped below 20 000 points for the first time in a long while and if you're trying to pick a bottom to this then you're a braver man or woman than I am.... Ever tried to catch a falling piano??
Here's a hint - D O N T
That DBXJP X-Tracker has held up nicely actually moving ahead of where I bought it. That I suspect is largely a function of currency moves but I'll take the security its provided.
For the rest things look a little messy and the deluge of selling pressure doesn't seem to want to let up.
I'm pretty sure there are pockets of value out there. Things that look good to me include Standard Bank, Absa, Tiger Brands, Pioneer and PikWik. They're all pretty defensive, even if the banks do take some pain the next few weeks.
I also quite like the Mvelephanda Group (MVG) story. They're a nice diversified group and yet the share price has also been under a lot of pressure now. I bought MVG at around R5.60 and its now sitting at R4.90 (after paying out a dividend and special divvie). I think there is value in this story.
But if you are buying short term and you expecting the market to stage a big turnaround then like I said - go and stand underneath Ponte and have a mate drop a piano toward you - if you can catch it then we MIGHT have hit the bottom...
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