'Individuals who cannot master their emotions are ill-suited to profit from the investment process'

Warren Buffett, credits Benjamin Graham as grounding him with a sound intellectual investment framework, and described him as the second most influential person in his life after his own father.

Patience is the reward for those who have a long term investment goal, who do not attempt to 'time' the market. Yes, the recent market turbulence may have put a number of investors in a spin but one can get perspective by looking at the past.

On Friday 23 April 2003, the JSE All Share Index closed at 7,361.15 points. Since that date, there has been no rolling 12-month period where the index has closed at a point lower than it did 12-months previously. But markets don't just move up in one direction and there have been sharp movements [both up and down] over days, weeks and months, in the past.

Investors must realise that investing in equity-based (shares) unit trusts is not for people with short-period investment horizons. The longer the time horizon of the investment, the more risk you are able to tolerate.

The reasons why people invest in equity-based (shares) unit trusts is two-fold: firstly, to achieve 'real growth', which means growth higher than inflation and secondly, to earn tax free dividends into the future.

Apart from capital gains tax advantages the major difference in using unit trusts versus buying individual shares directly as an investment medium is that there are many unit trust funds, which provide choice for various investment time horizons. In addition unit trusts provide access to a combination of sectors, such as property, local and offshore equity and bonds, to suit individual tolerance for risk.

Silke Financial Services has the skill and expertise to structure a well-diversified investment portfolio of stocks and/or bonds, precluding the need for you to select and manage the individual stocks yourself.

If you have any queries regarding the above commentary please contact us on 021 683 3380 or info@silke.co.za