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If you look at this chart, you can see that it has gone too high above the 100SMA and should retreat back down to it soon. Also the RSI shows that it is in the Overbought area. I would wait awhile.

I have an article somewhere that I printed off the web that states doing the monthly thing is better than doing a once off payment. It was strange to read this as I would have thought going all in with a bang would give better returns.

Aha, found it. Here you go - http://www.fin24.com/Money/Money-Clinic/Investments/Investing-in-Satrix-40-20140117

This would be pretty interesting. Let's say you buy R3000 worth of SatrixINDI shares every time it pulls back by, mmmmmmm a Rand. Or maybe it should be 5 Rand. That should make a massive difference in your profits. Of course you will need time on your side. Would be interesting to see the comparison if you did that on every dip.

Patrick, actually you are wrong. There is a big component that you are missing. You can't compare apples with apples. Somebody mentioned earlier in this forum about "probably due to the price fluctuation. Rand cost averaging". Remember, over a 3 year period you will via your monthly purchases, buy the dips. That would give you more bang for your buck as you are purchasing in those dips giving you more "shares" in the ETF for the same amount of money.

In those dips, the lump sum option will actually lose money and will most probably make it back once the market rises again, but the monthly oke got more out of that dip.

What I do agree with you is that the table is not correct. The comparison should be between a lump sum of R10800 and doing it monthly to a total of R10800 with R300 increments.

Of course there is another component that will mess all this up. Dividends. Let's say the lump sum oke got 1000 shares for his R10800 on day one and of course he gets dividends on 1000 shares for a period of 3 years. The monthly oke starts with, aaaaa, let say R300 and has 50 shares. Hmmmm thinking of this the monthly oke might start small but will have more shares at the end than the lump sum oke. So the month oke should earn more dividends towards the end.

Dem it would be nice to unravel this precisely with true blue information. Any volunteers?

Nios, does Simon's Lazy system really work? It seems you get in and out pretty late waiting for all his signals to align. He explained it to us about 6 years ago but I never investigated it deeper.

You can't compare apples with apples. Somebody mentioned earlier in this forum about "probably due to the price fluctuation. Rand cost averaging". Remember, over a 3 year period you will via your monthly purchases, buy the dips. That would give you more bang for your buck as you are purchasing in those dips giving you more "shares" in the ETF for the same amount of money.

In those dips, the lump sum option will actually lose money and will most probably make it back once the market rises again, but the monthly oke got more out of that dip.

Hmm, I've had a think about it and I think... I'm still right

The only way buying monthly would be better, is if the dips drop lower than your initial purchase price, otherwise the lump sum bought straight away is better. I can see the dips being lower than the initial purchase for the first few months, but after a year or more there's very little chance bar a crash...

I would say the monthly purchase is lower risk though, as if there was a crash you'd get your rand cost averaging, but lower risk would again mean lower reward in the majority of cases.

Okay guys, I took the question about lump sum or monthly up the food chain. Article is here:
http://www.biznews.com/wealth-building-biznews-com/2014/06/investment-race-lump-sum-beats-debit-order-whopping-r500-000/

I just have one major concern. Right at the end just before the tables, Mike Brown mentioned this:
"Brown also looked at the transaction costs that apply to ETFs (these are different for unit trusts) and found that it seems to be cheaper to invest monthly rather than through lump sum investments"

With tax being the first evil and fees being the second evil in investing, I sort of feel that he left us hanging.

Hi Guys,

I've been doing some research and would like to start investing. Naturally STXIND come up and it seems to perform quite well. I recently bought a car and have a balloon payment that I would like to pay off before it is actually due.

I have +- R1300 to put into the pot per month and I would like to do it over the next 4 years. Would putting this into the STXIND etf be wise? Should I split the amount and diversify into other etfs? or am I wasting my time.

I'm new to the whole investing game so any advice or guidance would be greatly appreciated.

It's never a bad time to get into the indi. Take a look at it's all time graph: http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=ZA%3ASTXIND&x=49&y=9&time=20&startdate=1%2F1%2F1996&enddate=1%2F1%2F1999&freq=2&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=262144&lf2=0&lf3=0&type=64&style=370&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=15

Not once in it's history will you find a 4 year period where you lose money. And things are actually better than the graph suggests as it doesn't take into account the dividends.

If we take the historical average of 20%, your R1300 a month will be worth +-R100k in four years time, or about R80k in todays money: http://www.investorchallenge.co.za/calc_compound.php?initial_deposit=0&monthly_deposit=1300&yield=20&years=4&inflation=6