{"id":756365,"date":"2024-03-04T13:54:16","date_gmt":"2024-03-04T11:54:16","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=756365"},"modified":"2024-03-04T13:54:21","modified_gmt":"2024-03-04T11:54:21","slug":"invest-tax-free-as-soon-as-you-can-for-as-long-as-you-can","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/industry-news\/756365\/invest-tax-free-as-soon-as-you-can-for-as-long-as-you-can\/","title":{"rendered":"Invest tax free as soon as you can for as long as you can"},"content":{"rendered":"\n

Perhaps you missed the February deadline to invest tax free? The good news is that you don\u2019t need to wait until the end of a tax year before putting your savings to work.<\/p>\n\n\n\n

By investing as early as possible in this new tax year, you can reap the full rewards of tax-free growth sooner. Here are some pointers to help you make the most of your tax-free investment.<\/p>\n\n\n\n

1. If you can, stay the course<\/strong><\/h2>\n\n\n\n

The late, legendary Charlie Munger said that one should never interrupt compounding unnecessarily. This is because your investment can grow exponentially the longer you remain invested.<\/p>\n\n\n\n

The same goes for a tax-free investment. When you harness the life-changing effect of the higher compound growth in a tax-free investment compared to that of a taxable investment option over time, you can double the value of your investment in real terms.<\/p>\n\n\n\n

See the illustrative example below.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

2. Choose a growth-oriented fund that will help you stay invested<\/strong><\/h3>\n\n\n\n

One of the benefits of a tax-free investment is that there are no geographical or asset class constraints to your underlying investment fund.<\/p>\n\n\n\n

This means you could give your money the best opportunity to grow over time by considering a growth-oriented multi-asset fund.<\/p>\n\n\n\n

Multi-asset funds make it easier to remain invested as they offer a less volatile experience than an equity-only fund.<\/p>\n\n\n\n

These funds also simplify investing as you leave the asset allocation decision-making to the investment professionals.<\/p>\n\n\n\n

Since its inception in 2001, the growth-oriented multi-asset Coronation Market Plus<\/strong> Fund<\/strong><\/a> has met the long-term capital needs of investors.<\/p>\n\n\n\n

As shown in the diagram below, the Fund has delivered an annualised return of 14.3%, which is well ahead of inflation at 5.7% per year.<\/p>\n\n\n\n

Worth noting is that, over this period, despite never being fully invested in equities, the Fund has outperformed the JSE All Share Index\u2019s performance of 13.5%. (All performance figures quoted are as of 31 December 2023).<\/p>\n\n\n\n

This means that investors enjoyed equity-like returns but with significantly less volatility.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

While Coronation Market Plus can invest up to 45% of its portfolio offshore, investors may consider a growth-oriented multi-asset fund focused on opportunities in international markets, such as the Coronation Global Optimum Growth Feeder fund.<\/p>\n\n\n\n