Rookie errors (#159)

Making mistakes is a great way to learn. Someone can explain diversification a hundred times without ever having the same impact as one share dragging down your entire portfolio. At Just One Lap, we like mistakes almost as much as we like questions. We know - mostly from experience - each mistake gets you closer to that ideal portfolio. 

In this week's episode, we use Ntombe's question as a kick-off point for some of the common mistakes we all make when we start investing. We talk about the tendency to be too diversified when we start out. We discuss why starting your investment journey outside a tax-free savings account is really not a good idea. Here are some other common mistakes we discuss:

• Checking your investment account daily
• Taking on too much risk because you're in a hurry
• Not taking on enough risk because you're scared
• Not having a strategy
• Not paying attention to fees
• Waiting too long to begin
• Leaving your important choices to someone else
• Thinking you should earn more money before starting

If any of these apply to you, don't miss this one.

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Win of the week: Ntombe

I opened a brokerage account last year. I didn't know much so my thinking was a "learn as you go". 

I bought shares that were very cheap, testing waters. 

Balwin Prop, Vukile, Delta, PnP, Old mutual and Satrix Top40. 

Out of all of them Satrix is doing well. The rest are always in the negative. So I'm thinking of selling even if I lose and just buy more on Satrix T40 and Prop and other ETFs maybe TFSA. What will you advise me to do and which one are good? I don't have much so I use my salary and currently able spend about R200 pm buying on my EE, which is a start for me. 

I was just shooting in the dark. Did not know what I was doing, it was a learning curve. I'm still learning but I'm getting there slowly. They were very cheap, also because I've seen these names and thought they kind of big companies.

Brecht 

I have a savings bank account in Germany with some Euros in. The interest rate on this account is less than 1%. Would it be worth my while to move this to a broker where I could invest this money into ETFs in Germany? How does the tax implication work on this?

Nadia

You mentioned that Robert Kiyosake's advice on buying gold isn't such a great idea. I'm not very clued up about gold and I was wondering if you have done a podcast I could maybe listen to about why you think buying gold isn't such a good idea? My mom knows a lady who also firmly believes that gold is the way to go and I'd love to hear your view. 

Wim

I invested in a cow about 9 months ago and paid R8,500. 

To my surprise last month I received mail saying my cow, Silly, was on its way to the slaughterhouse.

I was paid about R9,600 after all the deductions, feeding,  entertainment etc. 

It was about 8% return on investment in less than a year. I felt chuffed, but haven't decided to repeat since cost increased considerably.

I have a bond with remaining debt of about R500,000. My wife and I contribute more than double the repayment required. We have RAs. Should we rather push our extra savings currently going into our tax-free saving, RA or into the bond or continue with R2,750 into the tax free/RA?

I would also like to know if it is possible to choose a south African stock at the end of your show or once a month that prove a good investment opportunity. I do realize ETFs remain the primary equity vehicle for investment.

Waldi

What do you guys think is the best type of investment for him seeing as he is close to retirement age? Should he just put the money into a savings account and let the interest run on that amount? Is there still time for investing in ETFs? Or should he look at other things like Property (Maybe to rent out as an AIRbnb) or offshore accounts? 

Joyfully Prosperous

I've inherited some RDF (Redefine Properties Ltd) shares and noticed that the analyst consensus on Sharenet is to sell them at the current price levels. These levels are in line with the lowest in the last 5 year period. So, what am I missing? Why do 86% of the analysts agree that they should be sold. Can these analyst opinions be trusted in general?