Money Quiz & Investing in 2021

Test yourself on your financial knowledge

1. Some unit trust funds allow a minimum monthly investment as low as ….?

a) R100 b) R200 c) R500 d) R1000

2. Which one of these is not one of the four main asset classes?

a) Equity b) Property c) Bonds d) Cryptocurrency

3. Who said “It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price”?

a) John Maynard Keynes b) Albert Einstein c) Warren Buffett d) George Soros

4. Which of these is not in the so-called FAANG group of hightech stocks

a) Airbnb b) Alphabet (Google) c) Facebook d) Netflix

5. If the inflation rate is 5% a year, and your investment earns 15% a year, what is your real rate of return?

a) 5% a year b) 10% a year c) 15% a year d) 20% a year 6. What is the maximum percentage that a retirement fund can invest abroad, including in African countries other than South Africa? a) 25% b) 30% c) 40% d) 50%

7. Who is the governor of the SA Reserve Bank?

a) Tito Mboweni b) Lesetja Kganyago c) Judge Bernard Ngoepe d) Adv Nonku Tshombe

8. At what age can you claim a tertiary rebate on your income tax?

a) 60 b) 65 c) 70 d) 75

9. Which government body is responsible for investigating incidents of insider trading on the JSE?

a) The Financial Sector Conduct Authority b) The Department of Trade and Industry c) The SA Reserve Bank d) The SA Revenue Service

10. What is the maximum annual amount you are allowed to invest offshore, subject to exchange control approvals?

a) R1 million b) R5 million c) R7.5 million d) R10 million

ANSWERS: 1c, 2d, 3c, 4a, 5b, 6c, 7b, 8d, 9a, 10d.

Investing in 2021: how to keep calm and carry on

Beyond the gloom and doom are investments with a silver lining.

Palesa Tlholoe CFP is co-founder and wealth manager at Imvelo Wealth Solutions

With all of this in mind, it comes as no surprise that investors and analysts are uncertain about the economic outlook for 2021. This uncertainty is fuelled by, among other things, the second wave of Covid-19 that is rampaging through many countries including South Africa, our low growth rate and high debt-toGDP ratio, and our staggeringly high unemployment rate.

PHEW! What a year 2020 has been. The world got tipped upside down and shaken around, and everything we thought we knew changed. One unprecedented event followed another as countries locked down, cities feared for their futures and entire industries were left stranded. The markets went for a roller-coaster ride and currencies fluctuated wildly as people tried to make sense of the new normal.

So, are there any opportunities for investors going into the new year? Short answer, yes! Look beyond the doom and gloom and you’ll find that the investment cloud has a small silver lining…

Positive growth areas: Despite the fact that many industries have been hit hard by the pandemic, certain sectors of the market are still growing. Take local equities, for example, which are suddenly much cheaper than they were in January.

As investors search for stability, there has also been a move away from “growth” companies (like start-up tech businesses) to “value” companies, which typically offer more predictable returns. Property – another traditional safe haven – has likewise shown a positive upward tick since the panicked dip earlier in the year. Indeed, most hard assets (and asset-intense businesses) are expected to benefit as governments around the world roll-out stimulus packages to kickstart their ailing economies.

Stay disciplined: There might be growth areas, but investing is as risky as it has ever been. If you want to have any chance of success, it’s crucial that you pay attention to managing and mitigating that risk. Our recommendation?

Go back to basics and keep it simple. The goal-based investment planning approach is still the gold standard when it comes to investing in a disciplined manner.

How does it work? The first step is to decide what you’re investing for. Maybe it’s a house, or your retirement, or your children’s education. Next, work out the “investment horizon” – when you’ll need the money for the thing you’re saving for. It could be in three years (a house) or 30 (your retirement). This is important because it determines how risky your investment should be. For example, you would typically take less risk for a short-term investment and more risk for a long-term investment, where time will flatten out all the market’s ups and downs.