News24.com | Where I would invest R10 000 | PSG's Schalk Louw

Schalk Louw is a portfolio manager at PSG Wealth.

• For more stories, go to the News24 Business front page

Currently, RSA retail bonds are offering very attractive fixed rates, so for the lower risk investor, or the investor looking to add a lower-risk component to diversify their portfolio, I would definitely recommend that you consider investing in an RSA retail bond.

Rates as at 11 November 2022:

2-Year fixed rate: 9.50%

3-Year fixed rate: 9.75%

5-year fixed rate: 11.50%

Given the ongoing volatility, and I think it is safe to assume that we will be facing volatility for some time to come, investing in Gold would be a good addition to a diversified investment portfolio. Historically, gold prices have remained stable, offering a way for investors to preserve their capital. It also acts as a good hedge against inflation (based on historical data, the gold price tends to rise when the cost of day-to-day living increases). To gain exposure, I would recommend that you consider investing in a gold ETF (an ETF tracks a specific index, sector, commodity or asset class), such as the SPDR Gold Shares ETF (GLD). The underlying assets are invested in physical gold and should move in line with the gold price. A gold ETF offers investors a more affordable way to gain exposure to this commodity.

Finally, I would include an investment in an equity fund (unit trust) to generate long-term growth. To open a managed share portfolio, investors often require a minimum amount to make exposure to equities, and the costs involved with managing it, worthwhile. While there are low-cost trading platforms that offer investors a good entry point into the stock market, many investors may not have the proper knowledge or expertise to choose wisely, and risk losing their capital as a result. As an equity fund invests primarily in shares, you will most likely be able to gain access to local and offshore stocks (based on the fund you choose) without having to shell out a large sum of capital to gain direct entry to the stock exchange.

Of course, your risk profile will determine how much you should allocate to each of the options above. However, it is important to note that even the lowest-risk investment portfolios have some exposure to equities. As your investment grows, you can start to add more asset classes to build yourself a properly diversified investment portfolio over time.

Follow Schalk Louw on Twitter at @SchalkLouw

Disclaimer: News24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, News24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.