 |
Tuesday, 26 March 2013 - 20:00
Charts
Investment Horizon
An investment horizon is the total length in time an investor is expected to hold a security or portfolio. Knowing an investor’s investment horizon aids in optimising the portfolio with enough risk assets. An example of this is saving for a holiday in a few months time, the investment horizon is less than a year and thus the investment needs to be of low risk. On the opposite spectrum is a person saving for their retirement that is more than 10 years away, they would be able to take on more risk and get a better average return over the period.
One of the biggest risks when there is a mismatch in the investment horizon and the level of risk in the portfolio is the risk of permanent capital loss. When you disinvest from a portfolio while it is at a loss, the loss is then realised and the possibility to recoup the loss is removed.
To illustrate the above mentioned statements, we look at three portfolios with different levels of risk:
• Multi Asset Low Equity portfolio – Moderately Conservative
• Multi Asset High Equity portfolio – Balanced
• General Equity portfolio – Aggressive
For ease of calculation we used the average manager return for each of the above ASISA categories. The rolling returns were calculated for different time period to simulate different investment horizons for each of the portfolios.
The graph below shows the range of possible returns for each of the portfolios for different investment horizons. The returns were annualised for periods longer than 1 year. If you were invested into the Low Equity portfolio your return over 1 year would have ranged between -1.2% and 23.3% depending on the start date of the investment. Looking at the 1 year range of returns, all of the portfolios experienced at least one year where returns were negative.
The first thing that you will notice from the above graph is that the range of returns become smaller and smaller as the investment horizon is increased. Secondly the minimum return increases, for the Equity portfolio the minimum over a 1 year period was -33% and over a 5 year period 6%.
When looking to make an investment with a 3 year investment horizon one can consider a fund in the MA High Equity category. Over a rolling 3 year period the chances of a capital loss are reduced with the probability of providing a better return over the period than a fund in the MA Low Equity category. A portfolio invested 100% into equity will not be an ideal investment as you run a risk of having a capital loss at the end of the 3 years.
As with everything else in life nothing is certain. These calculations were performed on historic data. While the average return, minimum, and maximum return will differ for future investment, the crux still remains relevant. One needs to select the correct level of risk for your portfolio depending on your investment horizon of the investment.
As always, we are available for any questions and feel free to contact us with any question regarding investment or retirement matters.
Kind regards,
Gerbrandt Kruger
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Top News
![[IMAGE]](image.php@width=300&height=150&cropratio=2%253A1&image=%252Fnewsimages%252F2013-03-26T124257Z_1_AJOE92P0ZBM00_RTROPTP_3_OZABS-SAFRICA-TRANSNET-20130326.JPG "To match feature SOCCER-WORLD/DURBAN") The China Development Bank has agreed to lend South African state rail freight group Transnet up to $5 billion to revamp ageing rail lines, used to carry commodities such as coal and iron ore, a source close to the deal said. Full story ![[IMAGE]](image.php@width=300&height=150&cropratio=2%253A1&image=%252Fnewsimages%252F2013-03-26T155635Z_1_AJOE92P18AC00_RTROPTP_3_OZABS-MARKETS-SAFRICA-RAND-20130326.JPG "A BANK TELLER LOOKS AT 50 AND 100 SOUTH AFRICAN RAND NOTES.") South Africa's rand firmed on Tuesday after a government bond auction drew strong demand, although gains were limited by nagging concern about the outlook for the euro zone. Full story |
 Hong Kong shares eked out
slim gains on Tuesday, as strength in the local property sector
helped offset weakness in the Chinese consumer sector in moves
largely driven by corporate earnings announcements. Full story  Italian Foreign Minister Giulio
Terzi resigned on Tuesday over his government's decision to
return two marines to India to face trial for the murder of
local fishermen while on anti-piracy duty. Full story  U.N. Secretary-General
Ban Ki-moon has named Swedish scientist Ake Sellstrom to head
the U.N. investigation into allegations that chemical weapons
were used in Syria, Ban's spokesman said on Tuesday. Full story |
|
Markets |
Global equity markets and
crude oil rose on Tuesday after more data pointed to an
improving U.S. economy and helped offset any fallout. . . Full story |
European shares edged higher on
Tuesday as the market focused on data showing continued gradual
improvement in the U.S. economy, with the implications. . . Full story |
U.S. stocks gained on
Tuesday, putting the S&P 500 within striking distance of its
all-time high, as strong data on home prices showed. . . Full story |
Britain's top share index rose
on Tuesday, as traders latched on to encouraging data from the
United States while awaiting further news about. . . Full story | |||
European shares edged higher on
Tuesday as the market focused on data showing continued gradual
improvement in the U.S. economy, with the implications. . . Full story |
Gold fell on Tuesday as
safe-haven demand ebbed after Cyprus clinched a last-ditch
rescue deal, and U.S. data showing continued gradual improvement
in the. . . Full story |
European shares rose on
Tuesday, trading near session highs, as investors snapped up
shares in large multinationals such as miners, heartened by data
showing. . . Full story |
U.S. stocks trimmed some
early gains on Tuesday after data showed new home sales fell
more than expected in February and consumer confidence. . . Full story | ||||
SA Business |
South Africa cut its forecast of maize output for 2013 to 11.75 million tonnes from 12.35 million tonnes in a previous forecast, a government agency said on Tuesday.. . . Full story |
Cattle graze the fields around Anglo American Platinum's South African mines, a familiar sight for workers with a rural past, and possibly a hint of their future as the world's largest. . . Full story |
South African mining company Shanduka Coal said on Tuesday it had fired 250 workers who had been on a wildcat strike at its Graspan Colliery.. . . Full story | ||||
BRICS finance
ministers meeting in South Africa have not been able to agree on
funding for and the location of a development bank. . . Full story | China and Brazil
agreed on Tuesday to swap up to the equivalent of $30 billion in
each other's currencies if need be so. . . Full story | Glencore's warehousing and logistics unit Pacorini has made its first move into Africa, breaking into a major growth region for its. . . Full story | Sinopec Group, parent of Asia's largest refiner Sinopec Corp, said on Tuesday it had signed a framework agreement with South African. . . Full story |
South Africa's Treasury sold a total 2.1 billion rand of its 2023, 2031 and 2041 government bonds on Tuesday.. . . Full story | Malaysia is ahead of China in terms of the size of its direct foreign investment (FDI) into Africa and the gap is widening, according to United Nations data published on Monday.. . . Full story |
Company News |
Shareholders are referred to the announcement released on SENS on 27 February 2013 and are advised that the conditions precedent relating. . . Full story |
Calgro advise shareholders that in light of the changes to the Listing Requirements Mr Wikus Lategan, presently the Financial Director and. . . Full story |
Calgro M3 wishes to advise shareholders that the companyÆs Headline earnings per share (HEPS) for the period is expected to be. . . Full story |
Shareholders are referred to the condensed reviewed provisional results for the year ended 31 August 2012, as announced on 29 November. . . Full story | |||
Shareholders of the Company are advised that the European benchmark ferrochrome price has been settled at USD127 cents per pound for the second quarter of 2013, an increase of 13% from the USD112.5 cents per pound price in the first quarter of 2013.. . . Full story | |||||||
Company Results | Revenue for the year rose to R107.9 million (R106.8 million) and results from operating activities were greater at R61.9 million (R34.3. . . Full story | Revenue increased to R558.6 million (R456 million). Gross profit rose to R243.1 million (R179.7 million). Earnings before interest, tax, depreciation and. . . Full story | Revenue for the year ended 31 December 2012 plummeted to R29 000 (2011: R1.8 million). Results from operating activities came. . . Full story | The net attributable loss narrowed to R18.6 million (loss of R24.6 million). In addition, the headline and diluted headline loss per. . . Full story |
World Markets (Spot Prices)
|
|
Click here for the Sharenet Spot Price page
The JSE Today
| Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
|---|---|---|---|---|---|---|---|---|
| 26/03/2013 | 212 | 111 | 67 | 390 | 211,011,294 | R14,001,877,581 | 160250 | 834923 |
| 25/03/2013 | 209 | 167 | 71 | 447 | 215,738,722 | R13,567,963,258 | 166046 | 1164332 |
| 22/03/2013 | 190 | 159 | 71 | 420 | 204,911,869 | R14,513,035,763 | 189039 | 1217908 |
| 20/03/2013 | 178 | 153 | 65 | 396 | 283,829,299 | R25,615,144,780 | 153027 | 1439946 |
| 19/03/2013 | 184 | 174 | 69 | 427 | 222,443,805 | R15,668,812,627 | 150002 | 1263754 |
Major Moves Up
Click here for more Major Moves... |
Major Moves Down
Click here for more Major Moves... |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Highs
Click here for more Major Moves... |
New Lows
Click here for more Major Moves... |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Index Summary
|
|
Click here for the Sharenet Index Summary page
Latest Consensus Changes**
|
Results Expected**
|
Recent Dividends**
|
Ex Div**
|
Upcoming AGMs**
|
Stock Exchange News Service
| Date | Time | Headline |
| 26/03/2013 | 17:50 | LONRHO PLC - TR-1: Notification of major interest in shares |
| 26/03/2013 | 17:35 | SABLE HOLDINGS LIMITED - Unaudited Interim Consolidated Condensed Group Results ... |
| 26/03/2013 | 17:25 | OLD MUTUAL PLC - Form 8.3 Disclosure |
| 26/03/2013 | 17:06 | ANDULELA INVESTMENT HOLDINGS LTD - Reviewed Provisional Condensed Consolidated R... |
| 26/03/2013 | 17:02 | CAPE EMPOWERMENT LIMITED - Cape Empowerment Trust : Litigation Summary |
| 26/03/2013 | 17:01 | REBOSIS PROPERTY FUND LIMITED - Further Cautionary Announcement |
| 26/03/2013 | 17:00 | SABMILLER PLC - Directors Dealings in Securities Notification of transactions of... |
| 26/03/2013 | 17:00 | OLD MUTUAL PLC - Notification of Transactions of Directors/Persons Discharging M... |
| 26/03/2013 | 16:59 | MORVEST BUSINESS GROUP LIMITED - Financial effects of the acquisition and with... |
| 26/03/2013 | 16:40 | Mondi Limited - Posting of integrated report and notice of AGM, and proposed odd... |
| 26/03/2013 | 16:40 | INDWA INVESTMENTS LIMITED - Listing of Tap Issue - IND325 |
| 26/03/2013 | 16:34 | JCI LIMITED - Delisting Announcement |
| 26/03/2013 | 16:05 | EXXARO RESOURCES LIMITED - Trading of Exxaro ordinary shares on behalf of the Ex... |
| 26/03/2013 | 16:00 | OSIRIS PROP INTERNATIONAL CO LTD - Results of Notice of Annual General Meeting a... |
| 26/03/2013 | 16:00 | ARROWHEAD PROPERTIES LIMITED - Posting of circullar |
| 26/03/2013 | 16:00 | SABMILLER PLC - SABMiller ZAR 1,000,000,000 Bond Issue |
| 26/03/2013 | 15:50 | MASSMART HOLDINGS LIMITED - Trading of Massmart ordinary shares on behalf of the... |
| 26/03/2013 | 15:50 | CALGRO M3 HOLDINGS LIMITED - Changes to the board of directors |
| 26/03/2013 | 15:45 | CALGRO M3 HOLDINGS LIMITED - Further Trading Update |
| 26/03/2013 | 15:38 | INVICTA HOLDINGS LIMITED - Directors Dealing In Securities |
| 26/03/2013 | 15:30 | MIRANDA MINERAL HOLDINGS LIMITED - Shareholder update and withdrawal of cautiona... |
| 26/03/2013 | 14:52 | RMB CIS MANCO (PTY) LIMITED - Distribution Finalisation Announcement - RMBT40 |
| 26/03/2013 | 14:48 | RMB CIS MANCO (PTY) LIMITED - Distribution Finalisation Announcement - RMBINF |
| 26/03/2013 | 14:46 | CONTROL INSTRUMENTS GROUP LIMITED - Dealing in Securities by Director and Altern... |
| 26/03/2013 | 14:45 | CONTROL INSTRUMENTS GROUP LIMITED - Notification in terms of S122(3) of the Comp... |
| 26/03/2013 | 14:38 | BIOSCIENCE BRANDS LIMITED - Revised trading statement and further cautionary ann... |
| 26/03/2013 | 14:15 | AFRICAN OXYGEN LIMITED - No change statement and notice of annual general meetin... |
| 26/03/2013 | 13:59 | BRIMSTONE INVESTMENT CORPORATION LD - Dealing in securities by the company secre... |
| 26/03/2013 | 13:21 | COAL OF AFRICA LIMITED - Co-operation Agreement signed with Haohua Energy Intern... |
| 26/03/2013 | 13:20 | FOORD COMPASS LIMITED - No change statement and posting of annual report |
| 26/03/2013 | 13:20 | FOORD COMPASS LIMITED - Notice of annual general meeting of debenture holders |
| 26/03/2013 | 12:47 | CURRO HOLDINGS LIMITED - Finalisation Announcement of the Curro Rights Offer |
| 26/03/2013 | 12:00 | SYNTHESIS FUNDING LIMITED - SYN988 Synthesis Funding Limited - New Financial In... |
| 26/03/2013 | 12:00 | PINNACLE TECHNOLOGY HOLDINGS LTD - Dealing in securities by a family trust of Mr... |
| 26/03/2013 | 11:30 | INTU PROPERTIES PLC - Director/PDMR Shareholding |
| 26/03/2013 | 11:08 | ALERT STEEL HOLDINGS LIMITED - Revised trading statement |
| 26/03/2013 | 11:00 | SABMILLER PLC - Board and Committee Changes - Appointment of New Non-Executive D... |
| 26/03/2013 | 10:10 | RAINBOW CHICKEN LIMITED - Dealings In Securities By A Director Of A Major Subsid... |
| 26/03/2013 | 09:01 | ALERT STEEL HOLDINGS LIMITED - Further cautionary announcement |
| 26/03/2013 | 09:00 | GROWTHPOINT PROPERTIES LIMITED - Dealing in securities by Directors, Associates ... |
| 26/03/2013 | 09:00 | ASCENSION PROPERTIES LIMITED - Opening of private placement announcement |
| 26/03/2013 | 08:55 | SIBANYE GOLD LIMITED - Sibanye Gold Redeems Debt |
| 26/03/2013 | 08:47 | ARGENT INDUSTRIAL LIMITED - Dealing in securities by a director |
| 26/03/2013 | 08:40 | FIRESTONE ENERGY LIMITED - ASX Waiver from Listing Rule 14.7 |
| 26/03/2013 | 08:30 | MURRAY & ROBERTS HOLDINGS LIMITED - Disposal by Clough Limited of its Forge Shar... |
| 26/03/2013 | 08:30 | MERAFE RESOURCES LIMITED - Second Quarter 2013 Ferrochrome Price Announcement |
| 26/03/2013 | 08:29 | MURRAY & ROBERTS HOLDINGS LIMITED - CANCELLATION OF S329898 Disposal by Clough L... |
| 26/03/2013 | 08:00 | THE DB X-TRACKER COL INVEST SCHEME - Listing of additional 3 000 000 DBXUS secur... |
| 26/03/2013 | 07:30 | MASTER DRILLING GROUP LTD - Audited Provisional Report for Master Drilling Group... |
| 26/03/2013 | 07:10 | CIPLA MEDPRO SOUTH AFRICA LIMITED - Reviewed, condensed, provisional, consolidat... |
Click here for more SENS news