Monday, 28 November 2011 - 20:00
Charts
Compound Interest Some employers now give staff the option of reducing their retirement fund contributions. I think that the main purpose of the “choice” is to help staff out with their monthly cash flow. I was recently asked by a young client who had to make such a choice what I thought of the idea. He was of the opinion that he had plenty of time and he needed the cash flow now.
My thoughts were taken back (yes many years ago) to an example we did at university which graphically illustrates the power of compound interest and thus why we should all start investing sooner rather than later.
We have 3 students A, B, and C. All 3 are 20 years old and want to retire at the age of 60.
A starts saving R100pm at the age of 20, he stops saving at the age of 30 but leaves his capital in the investment.
B starts a bit later at the age of 30 and he invests R100pm until the age of 60.
C only starts at the age of 40, but to make up he invests R500pm until the age of 60.
For those of you who are weaker at arithmetic, A has invested R12 000, B has invested R36 000, and C has invested R120 000.
If we assume investment growth of 10% pa (compounded monthly) who do you think has the most capital at the age of 60?
The chart below shows the growth of savings of the three individuals and makes for interesting reading:
The total balance of the three investors at age 60 will be:
A will have R409 745
B will have R227 932
C will have R382 848
The simple fact is that because of the incredible power of compound interest, B and C simply could not catch up. From a retirement point of view, the answer is definitely “Save Now, Live Later”. While this is a very simple illustration it shows a very powerful force at play. Naturally in the real world there will be inflation and returns aren’t smooth, but this concept holds true under most scenarios.
For those investors who haven’t started saving from a young age the message is that another day shouldn’t be wasted before you begin saving – each day is important for compounding your assets. For those investors who were disciplined enough to start early the message is that you should do everything in your power to avoid having to prematurely draw down on your savings – leave that preservation fund to grow until retirement.
Kind regards,
Barry Hugo
info@seedinvestments.co.za
www.seedinvestments.co.za
021 9144 966
Mon, 28 Nov 2011
Top News
South Africa's rand gained as much as 2.3 percent against the dollar on Monday in what traders said was a temporary correction after last week's battering to 30-month lows. Full story
South African stocks booked their biggest daily gain in a month on Monday, tracking global equity markets on hopes that euro zone leaders would come up with new measures to resolve the region's debt crisis. Full story |
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Egyptians voted on Monday in the first election since a popular revolt toppled Hosni Mubarak's one-man rule, showing new-found faith in the ballot box that may sweep long-banned Islamists into parliament even as army generals cling to power. Full storyPakistan's Prime Minister Yusuf Raza Gilani ruled out "business as usual" with the United States on Monday after a NATO attack killed 24 Pakistani soldiers, and the army threatened to curtail cooperation with Washington on Afghanistan drastically. Full storyA suicide bomber attacked a military base in the Iraqi town of Taji on Monday, killing at least 19 people, in the latest assault by insurgents trying to undermine the government. Full story |
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Markets | Gold rose 2 percent on
Monday to above $1,700 an ounce, on track for its biggest
one-day gain in three weeks, swept higher. . . Full story | | World stocks jumped while the
euro rose from a seven-week low on Monday as optimism grew that
European leaders would come up with. . . Full story | | U.S. stocks surged about 3
percent on Monday on hopes that fresh proposals may emerge out
of Europe to help solve the region's. . . Full story | | European shares notched up
their biggest one-day gain in a month on Monday, led by banks
and insurers on hopes euro zone leaders. . . Full story |
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| U.S. stocks jumped about 3
percent on Monday on hopes that fresh proposals may emerge out
of Europe to help solve the region's. . . Full story | | European shares extended
gains Monday, led by banks, on optimism euro zone leaders will
unveil fresh solutions to help resolve the region's debt. . . Full story | | U.S. stocks extended their
gains on Monday, with the S&P and Nasdaq rising 3 percent on
hopes that fresh proposals may emerge out. . . Full story | | U.S. stocks opened sharply
higher on Monday on hopes that fresh proposals could be
emerging out of Europe to help solve the region's. . . Full story |
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SA Business | South Africa's ruling African National Congress has returned a long-awaited report with policy recommendations on the issue of mine nationalisation for. . . Full story | | South Africa's rand gained more than 2.3 percent against the dollar on Monday, the best performance in a basket of 20. . . Full story | | South Africa has no need for additional policy changes to deal with the impact of the euro zone debt crisis on. . . Full story | | South Africa's rand firmed against the dollar on Monday as news that the International Monetary Fund was preparing a rescue package. . . Full story |
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| Europe's banks
stepped up efforts to raise funds and offload business in
far-flung places on Monday as Bank of Ireland sold a
parcel. . . Full story | | France's Credit Agricole is closing its 60-year-old South African investment banking unit, the latest sign that European banks are pulling out. . . Full story | | South Africa's central bank may need to ease interest rates further if demand growth continues to disappoint, and fiscal consolidation should. . . Full story | | The escape route from risky
peripheral euro zone debt into higher-yielding emerging markets
is becoming increasingly tortuous, as the debt crisis marries
the performance. . . Full story |
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| South African Pioneer Food Group reported a jump in full-year earnings on Monday helped by increased sales and said cost pressures and consumer spending will influence its performance ahead.. . . Full story |
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Company News | Shareholders were advised that at the annual general meeting of shareholders of OneLogix held on Monday, 28 November 2011 (in terms. . . Full story | | Shareholders were referred to the cautionary announcement published on SENS on 17 October 2011 and in the press on 18 October. . . Full story | | At the third (3rd) annual general meeting of the shareholders of Optimum Coal Holdings Ltd held on Friday, 25 November 2011,. . . Full story | | Shareholders are advised that at the General Meeting held today, 28 November 2011, all ordinary and special resolutions, as specified in. . . Full story |
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| | | | | Shareholders are advised that on 25 November 2011, Wescoal made an offer to acquire from HSTI 17 Proprietary Limited ("HSTI"), 51%. . . Full story | | Shareholders were advised that, at the annual general meeting of AdaptIT held on Friday, 25 November 2011, all the resolutions as. . . Full story |
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Company Results | Net attributable profit soared by 186% to R2.7 million (loss of R3.2 million). Headline earnings per share grew to 6.47c (loss. . . Full story | | Revenue for the year ended 30 September 2011 rose to R16.9 billion (R15.7 billion) and gross profit increased marginally to R5. . . Full story | | Revenue from continuing operations increased to R1 billion (R784.3 million), and gross profit rose to R246.4 million (R242 million). Operating profit. . . Full story | | |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 31829.34 | 705.38 | 2.27% | JSE Top 40 | 17:00 | 28472.34 | 701.43 | 2.53% | JSE Gold | 17:00 | 3049.32 | -12.89 | -0.42% | JSE Financial | 17:00 | 21445.39 | 468.41 | 2.23% | JSE Industrial | 17:00 | 33994.03 | 751.71 | 2.26% | JSE Indust 25 | 17:00 | 28638.08 | 720.57 | 2.58% | JSE Resource | 17:00 | 52001.09 | 1180.10 | 2.32% | DJ Futures | 19:50 | 11500.00 | 313.00 | 2.80% | DJ Ind | 19:41 | 11515.41 | 283.63 | 2.53% | SP 500 | 19:56 | 1191.16 | 32.49 | 2.80% | Nasdaq | 19:56 | 2522.13 | 80.62 | 3.30% | FTSE 100 | 18:35 | 5312.76 | 148.11 | 2.87% | DAX | 18:46 | 5729.05 | 300.94 | 5.54% | CAC40 | 18:46 | 2998.02 | 141.05 | 4.94% | Nikkei | 08:26 | 8287.49 | 127.48 | 1.56% | Shanghai | 09:26 | 2383.03 | 2.81 | 0.12% | Hang-Seng | 10:26 | 18037.81 | 348.33 | 1.97% | All Ords | 07:37 | 4125.80 | 68.20 | 1.68% | NZSE 50 | 06:46 | 3218.44 | 6.17 | 0.19% |
| | Name | Time | RP | Move | % Move | Gold | 19:58 | 1711.20 | 28.93 | 1.72% | Gold/Rand | 19:57 | 14350.74 | 104.04 | 0.73% | Gold/R kg | 19:56 | 461646 | 1964 | 0.43% | Silver | 19:58 | 32.0630 | .8690 | 2.79% | Platinum | 19:58 | 1535.25 | .25 | 0.02% | Palladium | 19:58 | 578.00 | 16.00 | 2.85% | R157 | 17:06 | 6.98 | -.10 | -1.41% | R204 | 17:06 | 7.87 | -.07 | -0.82% | Brent Crude | 19:56 | 108.61 | 2.30 | 2.16% | Rand / Dollar | 19:58 | 8.3894 | -0.0817 | -0.96% | Rand / Pound | 19:55 | 12.9840 | -0.1135 | -0.87% | Rand / Euro | 19:55 | 11.1704 | -0.1121 | -0.99% | Rand / NZD | 19:57 | 6.3335 | -0.0057 | -0.09% | Rand / AUD | 19:55 | 8.3055 | -0.0065 | -0.08% | Yen / Dollar | 19:58 | 77.9500 | 0.4740 | 0.61% | Euro / Dollar | 19:55 | 0.7507 | -0.0003 | -0.04% | Dollar / Euro | 19:54 | 1.3314 | 0.0008 | 0.06% | Pound / Dollar | 19:55 | 0.6442 | -0.0009 | -0.14% |
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Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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28/11/2011 | 252 | 106 | 79 | 437 | 213,240,663 | R10,453,765,087 | 85861 | 2112590 | 25/11/2011 | 149 | 200 | 80 | 429 | 258,110,568 | R9,081,886,336 | 73432 | 2405490 | 24/11/2011 | 196 | 129 | 78 | 403 | 218,329,568 | R10,613,142,870 | 65529 | 2015001 | 23/11/2011 | 93 | 259 | 68 | 420 | 297,239,153 | R13,201,222,883 | 112718 | 2443576 | 22/11/2011 | 194 | 154 | 92 | 440 | 337,016,683 | R16,306,299,181 | 101741 | 2416393 |
Index Summary Index Name | RP | Move | % Move | Top 40 | 28,472.34 | 701.43 | 2.53% | Industrial | 33,994.03 | 751.71 | 2.26% | Mid Cap | 42,670.53 | 452.57 | 1.07% | Small Cap | 31,608.26 | 46.15 | 0.15% | Resource 20 | 52,001.09 | 1180.10 | 2.32% | Industrial 25 | 28,638.08 | 720.57 | 2.58% | Financial 15 | 8,043.75 | 209.37 | 2.67% | Financial & Ind. 30 | 31,452.64 | 814.61 | 2.66% | All Share | 31,829.34 | 705.38 | 2.27% | Oil & Gas | 28,529.31 | 869.14 | 3.14% | Mining | 33,760.02 | 709.10 | 2.15% | Gold Mining | 3,049.32 | -12.89 | -0.42% | Platinum Mining | 60.55 | .88 | 1.47% | GENERAL MINING | 8,198.16 | 242.80 | 3.05% | Oil & Gas Producers | 15,339.68 | 467.32 | 3.14% | Basic Materials | 28,471.76 | 586.28 | 2.10% | Chemicals | 13,140.81 | 33.76 | 0.26% | Forestry & Paper | 11,351.28 | 232.22 | 2.09% | Industrial Metals | 28,832.44 | 490.22 | 1.73% | Industrials | 27,643.86 | 378.27 | 1.39% | General Industrials | 77,482.61 | 1398.39 | 1.84% | Consumer Goods | 29,382.78 | 624.78 | 2.17% | Automobiles & Parts | 3,894.87 | 20.38 | 0.53% | Household Goods | 149.85 | 6 | 4.01% | Health Care | 34,814.48 | 716.93 | 2.10% | Beverages | 96.19 | .88 | 0.92% |
| | Index Name | RP | Move | % Move | Food Producers | 52,991.68 | 1161.83 | 2.24% | Personal Goods | 429.07 | 15.78 | 3.82% | Consumer Services | 56,865.10 | 1391.62 | 2.51% | General Retailers | 47,599.07 | 969.93 | 2.08% | Travel & Leisure | 3,626.73 | -7.21 | -0.20% | Media | 78.34 | 1.72 | 2.24% | Support Services | 2,174.17 | 2.81 | 0.13% | Telecommunications | 68,562.53 | 2102.80 | 3.16% | Financials | 21,445.39 | 468.41 | 2.23% | Banks | 39,950.51 | 1202.00 | 3.10% | Non-life Insurance | 33,560.74 | -24.25 | -0.07% | Life Insurance | 16,203.36 | 374.70 | 2.37% | General Financial | 2,127.82 | 33.60 | 1.60% | Technology | 23,782.82 | 268.75 | 1.14% | SHARIAH TOP40 | 3,076.45 | 77 | 2.57% | FTSE/JSE SHARIAH ALL | 3,135.90 | 73 | 2.40% | COAL MINING | 23,976.90 | 570 | 2.43% | FTSE JSE Fledgling | 4,590.55 | 3 | 0.07% | FTSE/JSE Alt X | 1,399.09 | 40 | 2.98% | SA LISTED PROPERTY | 378.75 | | 0.82% | CAPPED PROPERTY | 310.48 | | 1.11% | RESOURCE | 28,804.76 | 645 | 2.29% | DIVIDEND PLUS | 173.82 | 2 | 1.13% | FTSE/JSE RAFI 40 | 6,550.16 | 159 | 2.48% | Capped Top 40 | 14,989.42 | 363 | 2.48% | Capped All Share | 16,087.83 | 353 | 2.25% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | GRT | GROWTHPOINT PROPERTIES LI... | HOLD | 24 Nov | SOL | SASOL LIMITED | BUY | 24 Nov | ALT | ALLIED TECHNOLOGIES LIMIT... | HOLD | 24 Nov | TRU | TRUWORTHS INTERNATIONAL L... | HOLD | 24 Nov | AVU | AVUSA LTD | SELL | 24 Nov |
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Results Expected** Expected | Company Name | Fin. Date | 29 Nov 2011 | CHROMETCO | August 2011 (Interim) | 29 Nov 2011 | CROOKES | September 2011 (Interim) | 29 Nov 2011 | NASPERS | September 2011 (Interim) | 29 Nov 2011 | NASPERS-N | September 2011 (Interim) | 30 Nov 2011 | ACTOWERS | August 2011 (Interim) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | ILLOVO | 11-11-23 | 11-12-29 | 12-01-09 | R 0.2300 | TIGBRANDS | 11-11-23 | 12-01-06 | 12-01-16 | R 5.1000 | NAMPAK | 11-11-23 | 12-01-13 | 12-01-23 | R 0.4350 | NAMPAK | 11-11-23 | 12-01-13 | 12-01-23 | R 0.3050 | OMNIA | 11-11-22 | 12-01-13 | 12-01-23 | R 1.0000 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | INVESTEC-P | 11-11-17 | 11-11-25 | 11-12-13 | R 3.3842 | INVLTDPREF | 11-11-17 | 11-11-25 | 11-12-13 | R 3.1586 | VODACOM | 11-11-07 | 11-11-25 | 11-12-05 | R 2.6000 | SPAR | 11-11-09 | 11-11-25 | 11-12-05 | R 2.3500 | INVPREFR | 11-11-17 | 11-11-25 | 11-12-13 | R 2.2019 |
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Upcoming AGMs** Code | Company Name | Date | Status | CSB | Cashbuild Ltd | 28/11/2011 | Confirmed | MFL | Metrofile Holdings Ltd | 28/11/2011 | Confirmed | OLG | OneLogix Group Ltd | 28/11/2011 | Confirmed | ELRP | ELB Group Ltd | 29/11/2011 | Confirmed | SALD | Sallies Ltd | 29/11/2011 | Confirmed |
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