Financial Planning

Stocking up on your generational wealth

Wendy Myers, Head of Securities, PSG Wealth  

So many options are available to new investors, and trying to understand the investment product landscape and match it back to your risk appetite, investment time horizon and objectives can be intimidating.  You may be a newly qualified graduate at the start of your career or someone 15 years from retirement who has realised their investment portfolio isn’t sufficient to support their retirement needs.  In this article, I unpack the stockbroking options available to the new investor seeking to build a legacy of generational wealth or, more simply, investing for the long term.    

Tip: when reading this article, keep the ‘pay yourself first’ principle in mind. This means always pay your own savings and investment accounts first. That way you are “paying” your future self by saving for your long-term needs and expenses. 

Stockbroking options available to you  

Stockbroking firms offer investors the ability to invest in a myriad of investments, such as JSE-listed shares, exchange trade funds (similar to a unit trust, just listed on the JSE) and certain listed or unlisted derivatives. You can choose two distinct offerings:  

  • a direct stockbroking option where you are in control of all investment decisions: what to invest in and when; or 
  • a managed option where you hand such investment decisions over to an investment professional.  

Please note: as the scope of this article is long-term investing for a new investor, I will not concentrate on derivatives, as these are typically used by more seasoned investors with either a short-term time horizon or a focus on hedging their existing share portfolio.   

The direct option: 

This option appeals to those new investors who have the time and expertise to manage their own portfolio.  PSG Wealth’s online trading and investment platform provides these investors with the ability to trade across both local and offshore (more than 30) exchanges. Market insights are also provided by our team of investment professionals to guide you in your journey.  

The key to investing for the long term is to choose good quality stocks. The long-term investor is not interested in active trading or in short-term price fluctuations, so market timing (when to enter the market) isn’t important – these are typical considerations a trader (short-term investing) will consider.  However, a key part of investing for the long-term is diversification.  By offering the investor access to local and offshore exchanges, PSG Wealth enables investors to diversify their holdings with exposure to different currencies.  

The managed option: 

The managed stockbroking option provides the long-term investor with access to a dedicated adviser (a portfolio manager qualified to construct and manage your individual portfolio).  Your adviser will spend time understanding your risk profile and will match this to a suitably structured and diversified portfolio – a tailored portfolio that complements your overall financial plan. For example, some investors may prefer a high dividend paying portfolio whilst others may prefer stocks that offer capital gains for the long term. Your age and the time to retirement will be a key consideration by the adviser when assisting you. It is important to note that the fee structure of a managed portfolio is different to the direct option, so please ensure you ask your adviser to unpack all associated charges. In addition, there is a minimum initial investment amount of R500 000 (local portfolio) and R950 000 (offshore portfolio). 

Doing your homework is key  

Remember: markets are volatile and inexperienced traders can lose money. We have designed tutorials to guide you, the new investor, along the way.    

Here are some useful tutorials for every stage of your journey to wealth creation:  

Key steps to get you started 

As a recap, here are the six steps to start investing in stocks to build long-term wealth and create a financial legacy.  

  1. Get started investing as early as possible. 
  2. Decide how much to invest. 
  3. Open an investment account with someone you feel comfortable with 
  4. Understand your investment options. 
  5. Pick an investment strategy, start being conservative 
  6. Make use of automatic contributions 






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