Enjoy low risk with high returns.
The age of high-risk, high-reward thinking may be all but over.
For years the investment formula applied by investors has been to craft a diversified portfolio of assets weighted more towards equities. It made sense to build a foundation on safe, low-risk, low-return capital preservation investments and, depending on your age, allocate a relatively larger portion of your investable income into higher risk, higher return equities.
But is this really justified in the local context?
Even though global equity markets have enjoyed a decade-long bull run following the 2008-2009 financial crisis, consistently delivering 10% to15% annual returns, the JSE has been a perennial underperformer over the last four to five years. This means a different kind of investment landscape for South Africa, with unique threats and opportunities.
The new reality is that fixed-term, low-risk investments have become among the best-performing asset classes in the country – a fact that is shaking the very foundations of conventional investment advice. Entrenched beliefs must therefore be challenged, especially when investments that offer security can match or outperform higher risk options such as equities.
So, what are our options, given that fixed-rate investment options currently abound? Well, before diving into a vanilla offering from a bank, consider what your capital is secured against.
Products such as Fedgroup’s Secured Investment guarantee a set rate of return for five years and is secured against a variety of assets. This forward-looking investment in participation bonds not only offers a high rate of return but removes significant risk from the equation.
Guaranteed low-risk returns currently offered by fixed-rate investments have transformed from fringe options into mainstream investment vehicles that can no longer be ignored.
In these volatile times, and with the chance to outperform the average equity investor, it’s time to rethink conventional investment approaches. Instead, consider the highly lucrative and secure opportunities that these alternative investment options provide.
With Fedgroup’s Secured Investment, you get full capital security with an effective
annual return of 12.1%* for five-year investments of R5 000 or more. You’ll also have
the option to reinvest your returns, or draw a monthly income.
What’s more, you’ll pay zero fees.