Rolling InspirationRolling InspirationRolling Inspiration
Notification Show More
Font ResizerAa
  • Home
  • Features
    • Issue 3 2023
    • Issue 2 2023
    • Issue 1 2023
    • Issue 4 2022
    • Issue 3 2022
    • Issue 2 2022
    • Issue 1 2022
    • Issue 6 2021
    • Issue 5 2021
    • Issue 4 2021
    • Issue 3 2021
    • Issue 2 2021
    • Issue 1 2021
    • Issue 4 2020
    • Issue 3 2020
    • Issue 2 2020
    • Issue 1 2020
    • Issue 6 2019
    • Issue 5 2019
    • Issue 4 2019
    • Issue 3 2019
    • Issue 2 2019
    • Issue 1 2019
    • Issue 6 2018
    • Issue 5 2018
    • Issue 4 2018
    • Issue 3 2018
    • Issue 2 2018
    • Issue 1 2018
    • Issue 6 2017
    • Issue 5 2017
    • Issue 4 2017
    • Issue 3 2017
    • March-April 2017
    • January-February 2017
    • September-October 2016
    • November-December 2016
    • July-August 2016
    • May-June 2016
    • March-April 2016
    • January-February 2016
    • November-December 2015
    • September-October 2015
    • July-August 2015
    FeaturesShow More
    Unbearable weight of being
    1 week ago
    In memory of Phillip Thompson
    2 weeks ago
    Scaling new heights
    2 weeks ago
    From injury to glory
    3 weeks ago
    Ready to start afresh
    4 weeks ago
  • Regulars
    • Ida’s Corner
    • Upfront
    • Accessibility
    • Medically Speaking
    • Amputee Corner
    • Beauty
    • Rolling Kids
    • Disability Desk
    • Employment
    • Travel
    • Sport
    • Sexuality
    • Backchat
    • Property
    • Life Coaching
    RegularsShow More
    Navigating through unintended consequences of SCI
    6 days ago
    Sleep, wonderful sleep, wherefore art thou?
    2 weeks ago
    “Wheelchair Friendly” versus Universal Accessible – the ongoing Saga
    3 weeks ago
    Disability Employment Equity targets a travesty
    1 month ago
    Thought life
    1 month ago
  • News
    • QASA News
    • Hotspot News
  • Digital Magazine
  • About
  • QASA Website
Reading: Consistency crucial to investments
Share
Font ResizerAa
Rolling InspirationRolling Inspiration
  • Regulars
  • Features
  • News
  • Contact
Search
  • Home
  • News
    • QASA News
    • Hotspot News
  • Emag Issues
Have an existing account? Sign In
Follow US
© 2022 Rolling Inspiration. All Rights Reserved.
Rolling Inspiration > Blog > News > Consistency crucial to investments
News

Consistency crucial to investments

Rolling Inspiration
Last updated: 2020/01/17 at 9:00 AM
By Rolling Inspiration 4 years ago
Share
4 Min Read
SHARE

Contents
Stay put through the good and the badSome real investmentsKeep it consistent

David Case, chartered accountant and director at Magwitch Securities, explains the importance of remaining consistent when investing.

Prudential Investment Managers use the slogan “consistency is the only currency that matters”, by which they are trying to say that doing the right thing over and over again will give you the best results. Too many investors want to invest only when times are good and avoid the market when times are tough.

Unfortunately, what invariably happens is that an investor will exit the market after share prices have fallen and return when there has been a period of sustained returns. These investors tend to capture most of the bad days and miss out on a number of good ones.

Stay put through the good and the bad

Between 2002 and 2018, the JSE All Share Total Return Index has grown from 958,17 to 7 946,48. This represents an annual return of 12,96 percent through a period that has included some of the most difficult times for investors, including the market downturn of 2002, the global financial crisis of 2008, and the past five years during which the stock market has been trending sideways.

During this period, the JSE All-share Index (ALSI) gained 60 percent of the time and declined 40 percent of the time. The scary thing for investors, though, is that if you invested over this period and missed just the five best months or 2,5 percent of the entire period, your return dropped to 9,44 percent per year.

If you missed the 10 best months or five percent of the entire period, you barely kept pace with inflation at a 6,66 percent annual return. The investor that sat tight throughout the period would have performed best. That is why many believe that time in the market is what counts in investing, and not timing the market.

Some real investments

One of the clients at Magwitch Securities has matured a policy that he has been paying for 40 years. His contribution was R30,50 per month with no inflationary escalation. To simplify, he contributed R366 every year over 10 years, which amounted to R3 660. Over the 40 years he therefore contributed R14 640. At maturity the policy was worth R1 million.

He was invested in an equity fund – the most risky asset class – for the entire period. During that time, we saw approximately four stock-market crashes (the last being in 2008). The average annual return he achieved was 15,37 percent. This return was all thanks to his consistency. He didn’t change his strategy each year.

Keep it consistent

The best way to invest is to make regular contributions and do it consistently. We often advise our clients to set up monthly debit orders so that the investment is always growing through the monthly contributions. One should also look at utilising tax-efficient products such as retirement annuities and tax-free savings accounts to take advantage of any tax allowance that may apply.

Very few people are fortunate enough to grow their wealth overnight. For the rest of us it takes discipline, hard work and consistency.

You Might Also Like

Children with disabilities flourish under Casa Caritas care

Afternoon with a life coach

Sun and sea

A month till AfriNEAD

Reviving an old dream to write

TAGGED: finances, Investment, money
Rolling Inspiration January 17, 2020 January 17, 2020
Share This Article
Facebook Twitter Email Print
Previous Article Children with disabilities, nappy run, nappies Nappies a basic right
Next Article Barrier-less bus for Paralympians
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Rolling InspirationRolling Inspiration
Follow US
© 2022 Rolling Inspiration. All Rights Reserved.
  • Home
  • Subscribe
  • Advertise
  • Contact
Welcome Back!

Sign in to your account

Register Lost your password?