SA junk? Own America for the price of a burger
A credit downgrade is all but inevitable for South Africa: the economy is sliding backwards and the Rand is pretty worthless.
*Here’s a way to not only benefit from our weakness, but also own a piece of 600 of the biggest companies in the US for the price of a burger.
More and more people are taking their money offshore.
READ: Saving money not always the smartest idea
This is a way of investing offshore but keeping your bucks here.
You do not need an offshore account in this case.
You could enjoy the returns of not just market performance, but also benefit from the imploding Rand.
This product is relatively new here, having only been around for three years, and its popularity among smart investors is growing fast.
Own shares in Apple Inc., Microsoft, JP Morgan Chase and ExxonMobil for under R30 a share.
*Outperform our local index.
ETFs (Exchange Traded Funds) are baskets of securities like the Satrix40, Newgold ETF and the like.
They are a cost-effective way to achieve exposure to the parts that make up a specific index.
You trade them just like shares.
This one ETF provides that solution.
READ: Interest rates and share prices
*Profit from America’s growth.
It is vital that investors have at least some exposure to offshore markets.
Emerging markets such as ours often fall victim to the whims of fickle foreign investors.
When we are out of fashion, foreign investors vanish.
You need to ensure that not all your eggs are in one South African basket.
The United States is growing.
Unemployment is at all-time lows and the housing market is showing signs of growth – consumers are starting to spend.
This optimistic climate and growth will translate into growth and higher corporate earnings.
It is still early in the growth cycle and the perfect time to bet on American business.
*It’s managed by Deutsche Bank.
As one of the biggest investment banks in the world, it has an ETF team that enables us to trade the world with their db. x-tracker funds, from Europe, China, Japan and the US to the world index.
The db. x-tracker fund is approved and compliant with the Collective Investment Schemes Control Act.
This gives me the level of comfort I need to invest in its product.
*Make nice returns with less risk.
The downfall of many investors and traders that I have dealt with has been because of either fear or greed. Do not be one of those.
The DBXUS tracker does not look for “extraordinary” performance.
If you want “extraordinary” performance, you need to take “extraordinary” risk.
The US tracker fund purely tracks the performance of the top S&P 500 companies.
It’s “time in” the market that makes the difference, not “timing” and owning a share in more than 600 of the biggest US companies, to me, is a no brainer.
You can currently pick up this ETF for under R30 a share.
The DBXUS tracker not only gives you diversification, but also potential to outperform our All-share index (as it has in the past).
I own it in my own retirement fund.
Have a question or suggestion for Robby P’s next topic? Send these to benonicitytimes@caxton.co.za.
Benoni resident Roberto Pietropaolo, or Robby P, as he is known in the financial markets, is committed to educate you on financial wellness, investing, and general money matters. He works for Vunani Private Clients, as a trader, investor, mentor and tutor. He specialises in trading the short-term derivatives market and longer term equity or share market.
