Where one of South Africa’s top economists would invest R1 million
Renowned economist Dawie Roodt said if he had to invest R1 million, he would pick the South African stock market and local retail bonds.
He shared his views during a discussion with National Employers’ Association of South Africa chief executive Gerhard Papenfus.
Papenfus asked Roodt what he would tell a client if he came to him with R1 million to invest and whether it is wise to take the money offshore.
Roodt said the first thing to consider is the person’s profile. It is the most important consideration when it comes to investment advice.
For example, an old retiree with R1 million would be best served by putting the money in a bank with a set interest rate.
However, a young person who suddenly gets R1 million has better options. Roodt said the stock market and South African retail bonds are good options.
“The South African stock market looks very attractive at these levels,” Roodt said. “It is around 30% lower than where it should be.”
He explained that many locally listed companies, like Naspers and Richemont, earn their money internationally.
These companies are relatively cheap compared to the US market and are not highly exposed to the South African economy.
He is not enthusiastic about the United States stock market because it trades at elevated levels, making stocks more expensive.
Another attractive option is South African retail bonds. They provide good yields and offer a safe option to outperform inflation.
Simply put, South African retail bonds are an investment with the South African Government, meaning the capital invested is guaranteed.
Investors can achieve yields exceeding 10% per year, which makes it one of the best investment options.
Delving deeper into the stocks that excite Roodt, he highlighted four industries: finance, healthcare, education, and agriculture.
He explained that the financial field is changing dramatically, which created promising investment opportunities.
Another is the healthcare sector, where there are great advances that offer equally exciting opportunities.
Two other areas which Roodt believes offer investment opportunities are education and agriculture.
He explained that these four industries offer investment opportunities in South Africa and internationally.
This article was first published by Daily Investor. Read the original here.
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