South Africa’s highly regulated Pension Funds are being put under the spotlight by the National Treasury as it looks for ways to encourage people to invest more into their future while giving people early access to up to one-third of their funds to alleviate inflationary and cost-of-living expenses.
The South African Treasury has already amended Regulation 28 to the advantage of the investor. This determines the maximum exposure your pension may have to one particular asset or asset class. Regulation 28 was set up to protect retirement funds from not having enough diversification.
The new Pension Fund Reforms places more emphasis on the importance of diversification in any form of investment, not just your pension plan. Putting money into both short-term and long-term investments continues to be a smart option.
Short Term investments give the investor quick and/or immediate access to their funds. This is great for Emergency Funds, or funds being set aside for a specific goal, like saving up for a car, home renovations, or a deposit for a house.
Short Term investments generally have smaller returns than long-term investments. Preferred Long Term investments tend to take the form of Unit Trusts, Retirement Annuities, or Exchange Traded Funds.
The broader South African economy needs to also be considered as well. South Africa’s current inflation rate is sitting at 7.8% for July 2022. With no clear end in sight for the Russo-Ukrainian War, the global cost-of-living crisis, rising fuel prices, and a lack of staple grains, this trend is likely to continue for a while. This means that investments earning less than 7.8% are effectively lose value in real terms.
How should South Africans prepare for retirement?
The answer is simple: Carefully.
While South Africa is one of the stronger emerging global economies, it is also one of the most volatile. A rapid inability of the government to roll out services, an uncertain political future, and the ongoing energy crisis mean that investors today need to look carefully at how they plan their short- and long-term goals.
While the investment vehicles mentioned above are all passive, there is an investment strategy that should not be ignored: Active Investment.
“One of the most popular active investment vehicles in South Africa is the CFD and Forex Trading models,” says Jack Edwards, South African Marketing Manager at CAPEX.com. “An average of US$25 billion is traded every single day in South Africa.”
“We have seen rapid growth in the Trading Marketing in South Africa,” he continues. “Many people think trading is set aside for wealthy investors or big companies. We want to counter this misconception and give everyone immediate access to a complex, yet easy-to-use platform, filled with tools and resources that can help any trader achieve their full potential.
“CAPEX.com is not only a modern and highly customizable platform, but an actual learning center through the CAPEX Academy. Just browse through our educational materials on the website and start your trading journey,” says Edwards.
With the strong exchange control regulations, is trading legal for small-time investors?
“Absolutely,” says Edwards. “The key is to make sure that whatever platform you use is registered and regulated by the Finance Sector Conduct Authority. CAPEX.com fulfils all these legal and regulatory requirements so that the average investor can be confident in using our platform. Each trader also has their own individual account, so their money is ring-fenced from any other investor.”
How does one get started and what does it cost?
Edwards says, “We have tried to make the process as smooth as possible.” “You can go to our website or download our app” (available on Apple and Android). Opening an account is free of charge. Then, you’ll have instant access to our CAPEX Academy and a Demo Account that you can use to learn how trading works.
“Once you’re ready to start, you can add money to your account using a variety of payment methods, like OZOW or your debit/credit card. With as little as $250, investors can start their journey.”
Beyond your passive investment strategy, there are a myriad of opportunities for you to secure the life you have always desired. Active Investments allow your money to be more productive. This empowers every person to build their own future.
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About CAPEX.COM
CAPEX.com is a leading global trading platform providing its users with expert insights, tools, and resources to make markets accessible to a worldwide audience and offering a tailor-made trading experience. Its professional trading platforms, robust technological infrastructure, and transparent trading conditions have propelled it as one of the most respectable brokers on the international stage.
Anchored by a global presence and regional expertise, CAPEX.com holds operating licenses from Cyprus Securities and Exchange Commission, Abu Dhabi Global Market Financial Services Regulatory Authority, the Financial Services Authority (FSA) in Seychelles, and the Financial Sector Conduct Authority in South Africa. Visit their website for more details.
HIGH RISK INVESTMENT WARNING: Trading CFDs is highly speculative, involves a significant risk of loss and is not suitable for all investors. Before trading, you are strongly advised to familiarise yourself with the applicable risks. These can be found on the capex.com website.
