Advice for a Young Professional: Investing in shares directly

Unit trusts are the most accessible form of investment where you can gain up to 100% equity exposure within a fund. Depending on the institution you may invest as little as R500 per month or a lumpsum of R10,000 to get started. There are several ways you can approach this and the best would be to get advice from an advisor registered with the FSB because they would be able to guide you in terms of which funds to buy in accordance with your risk profile and goals. Alternatively you could open an account online with a fund manager and specify the amount and the fund allocations yourself.

Many financial institutions also offer multi-managed funds where they employ managers whose sole job it is to select and monitor funds which they then package into “solutions” to suit different investor’s needs. There are many advantages to these solutions including diversification between asset classes like equities, property, bonds and cash. Also diversification across various geographies and even themes and styles of investing. You could in fact apply for an offshore fund which involves externalising cash or you could buy local feeder funds that feed into offshore funds. An advisor with a discretionary license would be advisable in assisting you with all this because the investment universe is vast and can be a bit daunting.

Contact me for further advice on this subject. Starting out can be daunting, but plan well, in the beginning, to achieve financial freedom in your life.