investment choices cartoon

For a while now, I’ve been wanting to start a new weekly regular. As fun as it is to see where the week takes me – there is something great about focusing on a particular theme once a week. Obviously, there’s already the look-back at last week’s news on a Monday, and then Office Politics on a Friday (which seems to have morphed into this behavioural psychology section with only a passing reference to offices and politics) – but I’d like to start something a bit more finance-related.

So I’m going to put money where my mouth is and build an investment portfolio. True, it’s only hypothetical for now (it’s the week before pay-day) but expect there to be real money on the line in the coming weeks. Also, just because it’s fun, I’m going to start tracking some investment alternatives. In a “what-might-have-been” scenario.

I’m going to kick-start with R3,500 (you’ll see why in a second). Obviously, I face some restrictions:

  1. I live in South Africa, so I can’t just shoot off and buy shares in the United States (I’m not even going to try and assume that).
  2. That investment is too small to just “buy oil”.

Some possible options for that money:

  1. The Satrix SWIX Top 40 – this fund is passively-traded (ie. there’s no one responsible for making the investment decisions – there’s just an algorithm) and tracks the Top 40 shares on the Johannesburg Stock Exchange. To invest with Satrix, click here.
  2. Buy some actual shares using FNB’s Share Builder.
  3. Get some gold (translation: buy Absa’s NewGold ETF). To invest with Absa, click here.
  4. Buy some unit trusts in Nedbank (specifically: their Nedgroup Invest Entrepreneur A fund, which gets me playing around in the small businesses side of things).
  5. Do a side-deal with someone that just came back from holiday, buy their US dollars, and stash the cash.
  6. Buy a book (in this case, a first edition of John Maynard Keynes’ Treatise on Money). Which, incidentally, I recently found with a listed price of R3,500!
  7. Place the money in a 1 year fixed deposit.
  8. If I wanted some offshore performance, I could go to Deutsche Bank and buy their db x-trackers MSCI World Index ETF (another passively-traded fund available on the JSE that tracks the developed world equity markets). To invest with Deutsche, you could apply here.
  9. And finally, because I feel like I have to mention it, I could buy some bonds. Or, rather, a fund that invests in bonds. If I were going to do that, I’d put my money in the RMB Inflation-X ETF¬†which invests in SA government inflation-linked bonds. You can buy it through FNB’s Share Builder.

All of the above are quite easily available for someone with only R3,500 to invest. Here are some fact sheets/information on the above options:

  1. Satrix SWIX Top 40 Fact Sheet
  2. FNB’s Share Builder Site
  3. ABSA NewGold ETF Fact Sheet
  4. Nedgroup Invest Entrepreneur A Fund
  5. The US Dollar wikipedia site.
  6. John Maynard Keynes’ Treatise on Money Volume 1
  7. FNB 1 Year Fixed Deposit Rates
  8. db x-trackers MSCI World Index ETF fact sheet
  9. RMB Inflation-X ETF fact sheet

And for most of them, all the hard work has already been done. The only self-governed investment that needs some decisions would be the FNB Share Builder story.

Enter Naspers

Naspers, I am told repeatedly, is historically the best performing stock on the JSE. On Friday, however, it did not have a good day. Mainly because it holds a giant stake* in Tencent, a Chinese holding company that happens to be the fourth largest internet company in the world (after Google, Amazon and eBay). It owns QQ and Qzone and WeChat and TenPay (google them and see).
*Over a third of the shares, which is pretty giant by global standards.

Unfortunately for Tencent, China’s central bank ordered a halt in some types of mobile payment methods on Friday, citing concerns about verification procedures. This sent Tencent shares plummeting during Hong Kong trading hours, so when the JSE opened, Naspers followed suit.

The general sentiment is that this is just a temporary suspension. The People’s Bank of China just got a bit spooked by a new form of virtual credit card that it didn’t quite understand, so they stopped things so that they could think about it.

So I’m adopting that viewpoint, and buying Nasper shares with option 2.

The Investment Summary

Here it is:

Initial InvestmentInterestingly, I went online to see what the John Maynard Keynes first edition is going for. Unfortunately, I should have bought it as the two volume set. Buying just the one makes it only worth around $100.

How’s that for a one-day loss?

PS: Luckily, I didn’t actually buy it. Mainly because I googled it off my iPhone before I got to the counter. My smartphone was possibly my smartest investment.