Sebastian Pillay, product portfolio at FNB wealth and investments, shared tips to making a healthy investment lunchbox at the start of the year.
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“When looking at your lunchbox, think of those investments that could benefit you in the short- and long-term,” said Pillay.
Ingredients to a healthy investment lunchbox include:
• Something healthy and colourful
“A well-diversified unit trust will give you exposure to different asset classes, like cash, bonds, property and equities, in a single investment. This helps investors get maximum benefit during their desired investment period.
To maximise your opportunity, a tax-free savings account is an ideal vehicle for longer-term investing and saving without the tax impact.”
• Protein to build your investment portfolio
“Protein is an important part of a balanced diet and a major energy source. When investing, it’s important to diversify through local and global exposure,” said Pillay.
“An easy way to do this is through exchange traded funds (ETFs) that are passively managed investments that track a basket of shares or an index. This is a low-cost option to get exposure to local and global shares that make up an index.
“Investing in ETFs offers flexibility by offering a low-cost access point with the relevant diversification, which is central to a core portfolio just like protein in a balanced diet. There are many types of ETFs to meet your requirements, but ideally when you have a long-time horizon, staying invested and adding regularly will help you reach your goal.”
• Snacking on those short-term investments
“We are often told to keep our snacks healthy with a combination of fruits and veggies. Sometimes, we need to look at our investment options in the same light, as markets move and shift daily. For those short-term goals, snack on a money market account that offers the flexibility to contribute amounts as you wish, and you can withdraw the funds should the need arise.
“It’s ideal for saving for next year’s school fees, stationery, school uniforms or even extracurricular activities for your children. A notice deposit is also ideal for short-term investments that provide zero volatility or market risk. In general, the longer the notice period, the higher the return and is most beneficial if you are not willing to take on any risk and saving for a near term goal,” said Pillay.
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