Last week we promised options for putting your July payday to work for you.

So, we’ve collected a bumper issue with a mix of growth market insights, stock trends & news, wealth-building guides and tailored services for you.

Enjoy!

Shining some light on 🔦 

• New frontiers: Exploring emerging markets for growth.

• Petrol price cuts, E-commerce showdown & stocks optimism.

• Stock update: Higgo’s Top 10 stock picks for 2024.

• Wealth hackers: How to turn R1’000pm into R4.6 million.

• The results: Your predictions for the impact of SA’s GNU.

• The update: Are you ready for gold?

THE SPOTLIGHT

Time to Diversify to Emerging Markets?

Last week, we highlighted some unique investment options from China and Africa.

What we didn’t tell you though is that the idea to look at these came from a series of recent trends that’s piqued our interest in investing in emerging markets.

Exciting things are happening in some of the world’s newest economies – take Saudi Arabia, for example, which invested $500bn in creating NEOM, a hyper-futuristic desert city…

Not to mention the remarkable economic growth some lesser-explored parts of the world are experiencing.

All of this made us want to explore some emerging market investment opportunities.

Here’s what we found…

China is booming yet so undervalued

Mention China and one thing comes to mind: Growth.

But we don’t always appreciate just how much growth we’re talking about.

For some perspective, since its economic reform in 1978, China has grown its GDP by over 8000%.

Reasons to look at China are:

• Stocks are generally undervalued with PE ratios much lower than the US and Europe etc.

• The country has started injecting liquidity into the economy recently, which should lower interest rates, boost confidence and result in capital gains on assets.

India off the back of STEM & the AI boom

Similarly, India is also showing remarkable GDP growth.

And it’s likely off the back of their strong presence in STEM fields and especially the supply of software development professionals – it’s said that India hosts some 12.61% of the world’s software developers, second only to the USA’s 18%.

The current boom in demand for AI-related development capability is likely helping to bolster India’s growth. And it may even help secure it for the foreseeable future.

That said, like any emerging market, there are investment risks, and it’s likely wise to protect yourself from them by leveraging the experience of investors who know the space well.

How to invest in emerging markets

The simplest and most prudent way to invest in emerging markets (usually regions you’re not personally very familiar with), is probably via exchange-traded funds (ETFs).

An ETF is by its nature managed by individuals who know the markets they operate in very well, which offers a lot of protection from the associated risks. And you could invest directly in a region by going with a China ETF or India ETF.

But it’s worth noting that many providers today have broader Emerging Market ETFs, whose portfolios are spread across more geographical and business regions, mitigating a lot of the risk.

That said, any emerging market investment comes with a fair share of risk. That’s why it’s probably best suited to investors with a risk appetite, investing a small portion of their portfolio to test whether it’s for them.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

HAVE YOUR SAY

STOCKS AND ALL

🛢️ Big Petrol Price Cuts: South Africa is gearing up for significant petrol price cuts in July, following June's reductions of R1.24 per litre for petrol and up to R1.19 for diesel. The upcoming cuts, despite a slightly weaker rand, offer welcome relief for motorists and could help ease inflationary pressures.

🍏 Apple Dividends: Berkshire Hathaway's hefty stake in Apple, comprising 789 million shares, yields an impressive $789.4 million annually in dividends. Despite challenges in China and slow AI adoption, Warren Buffett remains confident in Apple's performance, highlighting the tech giant's alignment with his long-term investment strategy.

🛒 E-commerce Showdown: With Amazon’s recent entry into the South African market, a price war with Takealot is heating up. A comparison of 15 popular products reveals Amazon offering lower prices on seven items, Takealot on five, and three items priced equally. This competition promises better prices and services for South African consumers.

🏰 Scottish Mortgage Optimism: The Scottish Mortgage share price has risen 13% in 2024, driven by a few key factors. Trading at an 11% discount to its net asset value, strong positions in AI giants like Nvidia, and a proven strategic focus on growth opportunities, the investment trust shows potential for further gains, according to Christopher Ruane.

💻 AMD Optimistic Amid Challenges: Despite a recent cyberattack claim and a downgrade from Morgan Stanley, AMD shows promise. The company's AI-related products continue to gain traction, with significant revenue expected from AI accelerators. Analysts still see potential and rate AMD as a Buy.

🛍️ MercadoLibre Soars: Dubbed the “Amazon of Latin America,” MercadoLibre reported a 71% surge in net income for Q1 2024, driven by its diverse businesses like Mercado Pago and Mercado Envios. With bullish analyst targets and continued expansion into loans, credit cards, and logistics, the stock shows strong growth potential.

The truth about getting ahead in SA

“Enough money to cover 6 weeks' worth of expenses” – that’s what JPMorgan Chase believes the majority of households need to weather most financial storms that could hit. 

The problem however is that 65% of households don’t have this in place. 

The main reason? Failing to plan for it – or budgeting.

But we get it, budgeting is difficult when your income or spending is inconsistent. It simply “never” works out the way you planned. 

That’s why you need real-time tracking of income and expenses, automatically mapped to the right categories to keep you on top of your spending and work towards your financial goals. 

Start your journey to financial freedom with FinWise today.

WEALTH HACKER’S KIT

The Importance of Investing

How to turn R1’000 per month into R4.6 million

Ask anyone about growing wealth, and the advice of “start investing” is bound to come up at some point.

But why is that?

Well, it goes back to an idea that’s often missing from our general education systems.

See, in school and society today, you have this general concept of what working life should entail:

1. Work (primary income)

2. Get paid

3. Spend that money to live.

But there’s a piece missing from that story.

And to find it, you need to look at how people who are already wealthy see life.

How the wealthy work

Rich people, for lack of a better term generally add an extra step to the process.

Instead of spending directly out of their primary income, they know that when you work, you as a person have limitations – you have only so much energy, hours per day and capacity. This means there’s a cap (ceiling) to how much you can perform/earn, and you’ll never get ahead that way in life.

So, to counteract it, they build in a re-investment step to create secondary sources of income, like so:

1. Work (primary income)

2. Get paid

3. Reinvest (secondary income)

4. Reach the point where you only spend from your secondary income.

And that may seem like a big ask when you’re only barely making ends meet right now.

But you’ll be surprised what just a little bit of investment can do in the long run.

Why investing makes sense

 You don’t need to already be rich to start building real wealth today.

Starting with a surprisingly low amount, you can achieve amazing results in the long term.

Let’s imagine you:

• Start investing R1’000 per month at age 25

• Your investment grows by say 9% per annum

• And you keep investing diligently every month

• Until the age of 65

• At which time you’ll have around R4’681’320

Now, if you’d just used that same R1’000 pm in any other way – bought things with it or even saved it without interest, you’d only have R480k after 40 years.

So by investing, you increased it almost ten-fold to R4.6 million instead.

That’s the power of compound interest at work.

How to start investing today

If you’ve never invested before or are new to it, the safest and most prudent way to start is to get a professional financial advisor to help you.

They can help you create a tailored investment plan based on your current financial status, affordability and financial goals.

And you can get started right now by clicking here to book a meeting with FinMeUp.

FinMeUp is powered ZAQ Wealth, an authorised Financial Service Provider | FSP No. 51310.

THE PEOPLE HAVE SPOKEN

We asked what impact you hope the GNU will have on SA, and economic growth is the game… 

🟨🟨🟨🟨⬜️⬜️ 💵 Attract foreign investment (21%)

🟨🟨⬜️⬜️⬜️⬜️ 💪 Boost business and investor confidence (14%)

🟩🟩🟩🟩🟩🟩 📈 Start delivering better economic growth (31%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💰 Help lower interest rates (3%)

🟨⬜️⬜️⬜️⬜️⬜️ 🥊 Make parliament fights more entertaining (7%)

🟨🟨🟨⬜️⬜️⬜️ 💚 All of the above (17%)

🟨⬜️⬜️⬜️⬜️⬜️ 😤 Nothing, it’s a show and dance that won’t do much (7%)

What you said…

Oh wow, let’s hope that doesn’t happen, Omnibuild. We wonder what the alternative would be should that become the case…?

Agreed, Jason. The recent situation at our ports hasn’t been helping much with that either.

THE UPDATE

The first wealth-building tool we’re releasing soon puts you in control to set your financial goal(s), tailor it and start investing towards it.