Investment Opportunities for Students in South Africa 2024-2025
It is no surprise that a lot of students are actively seeking solutions to financial freedom and viable options on how to escape the corporate rat race in South Africa. This is largely due to a steady rise in financial literacy amongst the South African youth, and a call to self – employment as a means of combating unemployment in the country. So if you are a student with little money saved up or even one with no money at all, it is our belief that you will be able to take some advise from this article.
Dick During, wealth manager at PSG in Tyger Valley, sheds some limelight on what a student with little to no money should look out for when seeking investment opportunities in South Africa.
“An investor needs to understand that an investment portfolio in equities is not a get rich quick scheme. The time horizon for an equity investment should not be shorter than 7 years.
“The risks of short-term investing, unrealistic expectations, and volatile global markets have clearly been evident during 2018. Your investment – with the JSE All-Share index taken as measure – would have yielded a negative return of around 9% over those 12 months.
“Investing in the South African equity market can be done in various ways. The most obvious would be to buy shares on the Johannesburg Stock Exchange. This option is not always plausible due to the pricing of most of the quality shares, as well as the costs involved.
“Your alternative would be to invest in a singular, or a basket of quality equity unit trust funds, now known as collective investment schemes (CIS). Through an investment in such a CIS, the investor get access to a larger selection of some of the quality shares available on the JSE.
“You can invest in a singular fund with a specific fund manager or, alternatively, have your investment managed by a group of fund managers. You will do this via investing in a fund-of-funds CIS, giving you access to a multiple of investment strategies within the equity market.
“The historic returns on an equity-based CIS has been approximately 9 to 10% per annum for the past 7 years ending 31 December 2018 (assuming you have been invested for that total period).
“This compares with interest rate-based returns of around 6.50% per annum and inflation of just more than 5% per annum over the same period.
“For more detailed assistance please contact a qualified financial advisor.”
3. ICT
The South African information and communication technologies (ICT) sector is well established and sophisticated. South African companies are world leaders in pre-payment, revenue management and fraud prevention systems, and in the manufacture of set-top boxes, all exported successfully to the rest of the world.
4. Education
Both Government and the private sector have allocated large budgets to improve this sector. More franchises are increasingly being established, especially Technical and Vocational Education and Training (TVET) colleges (formerly known as Further Education and Training (FET) colleges), due to the demand for such facilities and skills in the country.
5. Agriculture
South Africa is a country of many challenges and is also a gateway for investors in Africa and offers enough opportunities in agriculture for investment, cooperation, expansion and trade. New foreign agricultural investments in South Africa are to the advantage of South African farmers and assist in job-creation.
6. Manufacturing
While the sector will continue to offer opportunities in 2015, entrepreneurs should be exploring export orientated manufacturing. Government offers attractive incentives, such as rebates and tax deductions, for component manufacturing, as well as an entrepreneur’s ability to develop overseas markets for such products.
7. Tourism
While manufacturing should be export orientated due to the weak rand, entrepreneurs should take advantage of this in the tourism sector due to foreign tourists benefiting from the favorable exchange rate. Business tourism is increasingly growing in attractiveness due to South Africa being recognized as the gateway to Africa, and due to the weak rand.
8. Mining
While at a low base due to the labour disputes encountered over the last 18 months, the sector has recently experienced an increase in expenditure on capital programmes, especially in coal mines as older mines’ reserves are shrinking and coming increasingly under pressure to supply more coal to our mainly coal fired electricity generating power stations.
9. Infrastructure
Government, at all levels, is investing in upgrading services and facilities and smaller contractors should seek ways to get involved in the various scheduled projects. Apart from low-cost housing, basic services, such as water, electricity, sewage plants, as well as repairs and upgrades to Government buildings and recreation sites, are needed in cities and towns across the country.