Last week, I started “investing”. As you may already know, I am a particular fan of passive exchange-traded funds (read: Exchange Traded Funds: Where I Would Put My Money Today) – and if anyone has asked, I’ve been advocating the Satrix Swix Top 40. So I’m putting some skin in the game, and seeing how it does relative to some other options that are out there for the small investor.
The alternative options:
- Buy gold – the ABSA Newgold ETF
- Buy shares yourself – on FNB’s Share Builder
- Buy government bonds – RMB’s Inflation-X ETF
- Buy US dollars – literally
- Buy an “art” investment – a first edition of Keynes
- Buy a Unit Trust – Nedgroup’s Invest Entrepreneur A Fund
- Save your money in the bank – FNB’s 1 year fixed deposit
- Go “offshore” – Deutsche’s MSCI World Index ETF
For a bit more on that, here’s a link to the original post: The Investor Diaries: Naspers and Tencent.
And here’s the initial position:
It’s now a week later, and in that time, I have:
- Set up a spreadsheet, to keep track of what’s going on; and then
- Registered for a Bloomberg account (it’s free), because it turns out that it can actually do it for me.
I’ve admittedly been a bit preoccupied with work and such, so I haven’t really been paying too much attention to “what’s happening in the market” (like most people). But I paid a bit of attention this morning, so here goes.
That stupid book:
The Nedgroup Unit Trust:
At this point, just a lot of numbers. That Bloomberg situation in particular might be a bit daunting, because it’s all so inconsistent. For example, the “last price” for Satrix (the STXSWX:SJ ticker*) is listed at 937.00 – which means that its last price was R937; Naspers shares (NPN:SJ) have a last price of 118,440.00, which actually means that its last price was R1,184.50. It’s all over the place.
*I’ve always been amused by that term.
Anyway, here’s the translation of all that into a spreadsheet:
- We start with the actual money invested (the blue column), because that’s how much I started with.
- Then you need to look at the purple section, which shows what I actually managed to buy with that R3,500. This is important, because it can cost some money to make an investment – brokerage fees, debit order fees, etc.
- The orange section calculates the value of the investment today.
- The “weekly return” calculates the change in value of the investment from one week to the next (that is, the movement between the orange and the purple).
- The “total return” calculates the change in the investment from the start (that is, the movement between the orange and the blue).
- If you have a scan down the “portfolio value” column under the initial investment, you’ll get an idea of how expensive some investments are to set up. And it should come as no surprise that the minute you involve an intermediary, you’re going to spend some cash.
- The most expensive investment to set up was the Unit Trust (over R100). This was followed by anything that involved FNB’s share saver offering (just under R100). Setting up a direct ETF cost less than R10.
- The best performer of the week was the Nedgroup Unit Trust. But once you take those initial fees into account, it drops back into pretty negative territory.
- The Satrix Swix 40 is leading the pack, followed by a straight US dollar investment, and then the Fixed Deposit.
- The book was a massive mistake – but then, it was never really a short-term investment anyway.
Until next week.