16. If you are a true investor, you invest for the long term and you don’t panic when markets fall. If you want to invest for the short term, you should use a bank term deposit or a money market account rather than an investment in the equity markets.
17. It is time in the market and not timing the market that counts. Don’t try to time markets or sectors of markets. Few people have got rich from doing this and most have lost money. The best way to get rich is to take time to select an investment product that has properly diversified underlying investments, and then to stick with it for the long term. Most people make the fundamental error of buying into an investment when it is at the peak of its performance and then selling out when its value has dropped.
18. Always check that an investment product and/or company is registered with the Financial Services Board (FSB) before investing. If it is not registered and things go wrong, you will have little recourse, so be extremely wary.
19. Charges on life assurance investments (endowments) are proportionally higher on lower amounts. Check the structure of costs in relation to premiums. You might find that paying just a few rand more every month costs you proportionally less. This will give you a better return.
20. Investing on a regular basis is a good strategy in volatile markets. If markets rise, your investment improves in value. If markets fall, you get more for your money, and you’ll benefit when markets go up again. This is known as rand-cost averaging.
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