It’s all about making your hard-earned cash work for you, that much more aggressively than would be possible in any other type of investment. But what do you need to know, as an aspirant female investor, to succeed in the South African share market as we transition towards 2021?
In March this year, a piece on The Atlantic advised kitchen-table investors, in the face of the COVID-19 financial crisis, not to do anything. The reason? “Time in the market beats timing the market”, wrote the journalist. Essentially, she was saying that those passive investors who have bought and taken a hands-off approach will, on average, do better than the active ones who are continually shuffling things around in the face of change.
The take-home point: investing is not scary and you don’t have to know a lot about the stock market to make good investments, according to Sallie Krawcheck, co-founder and CEO of Ellevest. But the immediate post-COVID period is not a good one to make significant changes.
Interestingly, as a female investor, you may do that bit better than your more typically aggressive male counterpart. Women are, after all, known to be more relational about their money; they are able to step back and see the bigger picture and may be better able to structure their investment towards their own unique life circumstances, advises Blue Ocean Global Wealth CEO, Marguerita Cheng.
Yes, ma’am, if you’ve managed – against all odds – to squirrel away a bit of dosh over the lockdown period, you are likely to be keen to find out more about how to add stocks and shares to your investment portfolio. This is assuming that you’ve not yet traded on the JSE.
Getting down to basics, a stock – or equity – is of course a security made up of a fraction of the value of a company. In buying units of their stock, otherwise called shares, you are now entitled to a percentage of that corporation’s assets and profits equal to the amount of stock you have purchased and now – happily – own.
Right now, the market is flourishing due to an international trend towards tapping into the JSE’s relatively regulation and restriction-free share market. Five stable options, then, according to Business Report, are:
- British American Tobacco – one of the largest corporates with the highest market capitalisation and earnings that have been increasing year on year since 2017;
- Naspers – a high-value company whose strength lies in its decisive approach to doing business;
- Gold Fields Limited – a list-topper on the JSE due to how people take to invest in gold during uncertain periods;
- Curro Holdings – an independent education network with an affordable share price, but which has gained the trust of investors due to the ongoing effectivity of its management strategies; and
- Grindrod – a freight company with high liquidity and cash flow, which has maintained an eight per cent growth in revenue over the last few years.
Change: the only constant
However, in June, Bank of America (BofA) released a report that detailed which South Africa stocks could benefit most keen investors following the COVID-19 peak – a whole new investment landscape.
A critical element in their envisaged success was how agile the companies had proved in adapting their business models to the crisis period. BofA began with a few key themes, which will be familiar with you if you’ve been keeping up with your online business reading over the COVID period.
These included deglobalisation, tech wars, big government, health and the new consumer; a country overlay was then added to the proceedings.
Read widely, think broadly and then invest in the services of a reputable broker who can assist you in surveying your options, streamlining your goals, and deciding on the level of risk with which are comfortableLouis Schoeman
In the South African market, the top healthcare choice arising from the BofA report was Aspen – the country’s largest pharmaceutical company; while media conglomerate Naspers and tech giant Prosus ranked highest, respectively, in the technology and media segments.
The analysts commented that their “top 10 picks captured the breadth of post-Covid changes: digitalisation, increased focus on health, changing consumer preferences, but also the importance of localised supply chains and government protectionism.”
If you’ve been reading the business and investment pages, you’ll understand all of the above. If not, it’s worth making a shortlist of questions to pose to your financial advisor when next you see him or her.
Get this party started
Getting excited and keen to launch yourself into the share market? The word from Louis Schoeman, managing director of SA Shares is that it pays to proceed with caution at the outset. “Read widely, think broadly and then invest in the services of a reputable broker who can assist you in surveying your options, streamlining your goals, and deciding on the level of risk with which are comfortable,” he advises. “The post-COVID world is much changed – the increased use of technology and the internet is not going to go away, as far as online shopping, working from home and videoconference calls are concerned. These changes should all be brought into the equation when you make your share selections.”
It’s also a case of having a financial advisor or broker on board who listens to your concerns, takes on board your main investment aspirations, and calls you up for a chat and a rehash – which could still amount to an “I’m not budging an inch” – when markets are temperamental.