Johannesburg – Market volatility should not deter prospective investors from investing and for those who haven’t started it’s never too late.
Carin Meyer, Head of Share Investing at FNB, says “The reality of markets is that they are volatile, however, over the long –term the market is able to self correct, meaning the sooner one starts investing the better. Getting started is a big step, and it’s always better to start small and then build-up your portfolio over time. While it’s not easy to tell when the market will turn around, a frequent mistake made, is waiting and postponing the decision to invest”.
Here are some of the top reasons to get started:
It’s easier than you think
Investing is not as complicated as it’s sometimes made out to be, anyone can open an investment account without having to pay for broker services. Exchange Traded Funds (ETF’s) are the most practical option if you want exposure to JSE listed shares. Starting from R300 a month any prospective investor can open an account and invest in the top 100 JSE companies, the biggest advantage is that the investor does not have to select the shares, the share are pre-selected.
Imagine staying invested long enough for you to start earning interest on interest, this is what compound interest does – you realise growth on original interest earned. This can only happen when you stay invested for the long-term.
You can start small
Contrary to popular belief, investing is not about putting aside large amounts of money. As a first step decide how much you can afford to put aside on a monthly basis and then have a scheduled transfer from your account, you won’t have to worry about transferring the money yourself. Once you have formed a habit of saving, you can start increasing the amount steadily without disrupting other financial obligations.
Earn a high return on your investment
Deciding to invest opens up the possibility of earning growth on your money, this however, depends on the type of investment vehicle you choose. Speak to your financial services provider to find out which product is best suited to your needs and match this to you risk appetite. Asset classes such as shares offer better returns over the long term but are prone to market volatility, while cash based investments are less volatile.
“It’s important to realise that starting to invest does not have to cost large sums of money, all one needs is determination and the commitment to be in it for the long-term”, concludes Meyer.