The intermediate’s guide to investing

So you have some investment know-how, and want to up your portfolios, but haven't been investing long enough to have the courage to do it yourself.
 
This guide will look at investing options for intermediate investors. It will focus on online investing platforms, investing through your banks, as well as looking at gold and the tax-free savings account options.
 
These investment tools will offer you the freedom to pick your own investment options, but also be simple enough to use, as not to confuse or overwhelm you, until your portfolio has been built up and you have become an advanced investor.
 
If you think you are still a beginner, click here.
 
Investing in gold
 
There are many ways to invest in gold. You can buy gold bullion (gold in its physical form) from banks, the Scoin shop or other gold investors. You can also buy gold medallions or invest in shares with exposure to gold. It is also a 'universal' currency in that it can be exchanged or bartered for the currency of the country you are in.
 
However, not many know the difference between a Krugerrand, gold medallions and investing in gold shares.
 
The three investments work differently, and are for different types of investors. Gold medallions are generally for collectors, and won't offer much return if you don't know what you are doing; a Krugerrand can be a collector's item, but also is a good investment deal, and the gold shares can be quite volatile, particularly if you are investing in gold mines in South Africa. If you are happy to take on a bit of risk for a long period of time then shares may be a better option if you want bigger returns.
 
For more information on investing in gold check out our guide by clicking here.
 
Investing in shares
 
You can start off investing in shares through online platforms such as EasyEquities. If you don't have enough money to start off with, EasyEquities allows investors to buy fractions of share. This means you can pay as little, or as much as you want for a share. For example, if a MTN share costs R120, and you only want R5 worth of the share, you won't own the whole MTN share, but rather just a fraction of it.
 
According to the EasyEquities website: "Fractional ownership allows you to purchase a portion of an equity, instead of being limited to whole-equity quantities."
 
"[It is] easy, affordable, secure equity ownership for everyone. Quite frankly its investing, just made easy!" said Charles Savage, CEO of GT247.
 
As an intermediate investor, this site allows you to pick your own stocks, either from the complete Johannesburg Stock Exchange (JSE) list, or from their top 40 stocks. You can choose how much money you want to pay for each purchase, and have complete control over your investment.
 
"This is designed to broaden access to share ownership, including people who have never invested before in equities," said Savage.
 
They point out that their brokerage commission of 0.25% is lower than PSG Online, Sanlam iTrade and Standard Bank. They also don't charge a monthly admin fee. However, you do pay for telephonic purchases which cost R50 extra.
 
"[The] R50 telephone charge is necessary as we want to discourage investors from trading over the phone as this requires experienced and expensive resources to manage and resource the service," said Savage.
 
For more information on EasyEquities, click here.
 
Save money with Exchange Traded Funds
 
etfSA is the home of Exchange Traded Funds (ETF's) and is an internet based information and transaction website that provides simple and efficient solutions for investors wishing to discover, understand, manage and profit from the world of ETF's, so explains its website.
 
If you want to cut the costs of investing in a fund, investing in an ETF is an option. It's simple too through etfSA. This site works much the same as EasyEquities, but you cannot buy fraction shares.
Here you can pick the funds you want to invest in, and set up an automatic monthly payment system. That way, every month your money will be reinvested, and compounded annually, as well as giving you the freedom to choose what you want to invest in.
 
You can grow a diverse portfolio of JSE top 40 stocks, Indi 25 (the top industrial stocks), or many other stocks, or bonds depending on what you want to invest in. The site gives break-downs of the stock's performance over the years, to help you make a more informed decision.
 
As an intermediate investor, etfSA allows you to have the freedom of choice, without having to constantly watch the stock market. You can leave your money to grow, as it will automatically reinvest your money every month until you change it.
 
For more information, click here.
 
First National Bank
 
First National Bank (FNB) has three products when it comes to online trading: the Share Saver, Share Builder and Share Investor. "We try to cater as many people as possible," says Carin Meyer, CEO of FNB Share Investing.
 
Share Saver is an online product where you pay a monthly fee depending on your portfolio size, however, a minimum monthly investment of R300 has to be made. This product does not allow you to pick your own shares, but rather have your money invested for you across the top 100 companies on the JSE.
 
(For more information on Share Saver fees, click here.)
 
With the Share Builder, the number of shares you can buy into is limited, but you can choose which shares you want to invest in and you can buy Krugerrands.
 
"We limit the number of shares so that the clients do not feel overwhelmed by too much information, but still have the freedom to choose which shares they want to invest in," said Meyer.
You have to have a minimum account balance of R100, and pay a monthly fee of R19.
 
(For more information on Share Builder fees, click here.)
 
The Share Investor allows you to look at all the shares on the JSE: "This is for those guys who are comfortable," says Meyer. This has a monthly fee of R49, with a minimum account balance of R200.
 
Standard Bank
 
For intermediate investors, Standard Bank has the online share trading platform, which costs R60 a month, with access to wide range of products. You do not have to be a Standard Bank client to use this product.
 
However, when it comes to advice, Standard Bank will not tell you which stocks to buy, and which to leave, but rather will give you company history on the stocks you are interested in.
 
Standard Bank does offer face-to-face courses for people wanting to know more about trading. There are also webinars (online seminars) and documents available on their website.
 
For more information on Standard Bank prices and products, click here.
 
Absa
 
Absa has two options. Their online trading platform allows clients to trade shares and ETF's, as well as check all their banking and trading accounts at any given time. The second service is a telephonic one where clients place trades through a simple call and have the ability to monitor their stocks online.
 
Absa does not have a monthly account fee, but they do charge a brokerage rate of 0.4% of the value of securities traded. There is a minimum brokerage charge of R120 per trade according to their website.
 
Absa do not have educational information at the moment but Robert van Eyden, the head of stockbroking at Absa added: "There will be a concerted effort on educating people about the shares."
 
Tax-free savings
 
They are due to be unveiled in March this year but when it comes to tax free savings accounts an individual may contribute up to R30 000 per year in tax free savings and investments with a lifetime contribution limit of R500 000.
 
"The objective of introducing the tax free saving accounts is to encourage individuals to save, which would reduce their financial vulnerability and reliance on debt when there are unexpected shocks to their normal income or sudden large expenditures," says National Treasury.
 
The final products list which will be eligible as a tax-free savings account has not yet been released. However, this vehicle is a great way to save money without any tax implications.
 
Even if it is used as a secondary investment vehicle, or for retirement purposes, it will be worth it in the long run. It has been speculated that some unit trusts and ETFs might be eligible as a tax-free saving vehicle.
 
Justmoney will publish the list of products for tax-free savings accounts as soon as National Treasury makes it available.
 
Investing courses
 
If you are more comfortable with investing, and have a keen interest to widen your portfolio, there are some online courses you can take. These courses differ, depending what you would like to focus on when it comes to investing.
 
If you want to brush up on your investing skills, there is a course via ShareNet, click here.
Standard Bank also offer online courses (see above) or face-to-face sessions.