EDITOR: BRUCE BARCLAY | t 021 405 3780 | f 021 405 3782 | 20th Floor, Metropolitian Building, Coen Steytler

Avenue, Foreshore, Cape Town, 8001

BULLS AND BEARS

AND EVERYTHING TO DO WITH INVESTMENTS
Welcome to my newsletter keeping you informed on matters relating to investments. It will be informative, motivating and enrolling and it will add value. I will assist in educating where there may be a lack of understanding replacing fear and doubt with knowledge regarding the financial sector. PERSONAL SHARE PORTFOLIOS PSP and Retirement Funds: It is now possible to manage your retirement funds via a share portfolio? These include the management of compulsory savings products as well as life annuities within a Personal Share Portfolio (PSP). Recent developments by the larger insurance companies and some investment houses, created the opportunity for investors to invest in more specialized vehicles than in the past. One of these opportunities has been the use of a share portfolio as an alternative to unit trust investments for compulsory funds. Currently this option is available to you through PSG Konsults relationship with Momentum and Sanlam, irrespective of the institution your retirement funds may be with. These platforms afford you the opportunity of managing and trading your own share portfolio via PSG Konsult stockbrokers and can be used by PSG Konsult Financial Planners subject to various stringent rules pertaining to the Act governing retirement funds. Retirement annuities, pension, provident and preservation funds and life annuities may all invest in direct share portfolios. The minimum amount that can be invested into a direct share portfolio is R500 000-00. The fees are regulated and the maximum total fee charged by PSG Konsult (the planner and the stockbroker together) is limited to 1, 5% per annum. Therefore, in addition to being in control of the performance of your retirement funds, you could be saving yourself on management fees too. I have found that almost in every case where this product has been shown and explained to clients and where they fit the minimum requirements, the switch from the aforementioned investments has been made because it makes absolute sense to be closer and in control of your own funds than having an impersonal and handsoff approach with a retirement fund/ institution somewhere. Besides a better possibility of performance it costs less (sometimes substantially so!) With a PSP you have the possibility and

opportunity to be involved and have direct access in the management of your retirement funds, either by appointing your Portfolio Manager/Stockbroker to operate and manage the share portfolio on your behalf, or via a combination of you and your Stockbroker/Portfolio Manager managing your Personal Share Portfolio for retirement. You have sight of your portfolio on a daily basis via the PSG Online website just as you do your ordinary share portfolio - in fact it works on exactly the same basis, the only difference is the funds invested are subject to legislation governing retirement funds which must be stringently adhered to. The advantages of the Personal Share Portfolio are as follows: Lower fee structure with no performance fees Potential for better growth The portfolio can be customised to your needs and wishes Market entry and exit can be timed You can choose your level of participation ranging from full discretion to execution only. In other words you could manage the funds yourself or appoint us as the managers.

If this opportunity is interesting and you want to investigate the possibility of a PSP, call or send me an e-mail and lets discuss and investigate the option for you. Even if you are not sure of the value of your current retirement funds, I will be able to investigate and inform you. It may just be the best financial move you make for your golden years. THE EDUCATION CORNER: What is a P: E ratio? (Price-to-earnings ratio) The P: E ratio of a stock is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. The P: E ratio can therefore alternatively be calculated by dividing the companys market capitalization by its total earnings. The P: E ratio reflects the capital structure of the company in question and is a financial ratio used for valuation. A higher P: E means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with a lower P: E ratio. The P: E ratio can be seen as being expressed in years, in the sense that it shows the number of years of earnings which would be required to pay back purchase price, ignoring inflation. The P: E ratio also shows current investor demand for a company share. COMMENTS I welcome comments and questions and value your input on topics that you most like to hear or learn about. Your privacy is always protected and ensured so please dont worry about asking the stupid question. Its from these that we learn the most! bruce.barclay@psgkonsult.co.za

PSG Konsult Financial Planning is an authorised financial services provider.