How double your money in two years
To double your money is anyone's dream. To take two years is actually pretty long but what if you could to a liquid investment and still have that possibility?
Another day, another blog post. I've been googling "how to double your money" but most of what came back was rather generic and US based.
Then with luck Standard Bank of South Africa came to me and offered me an investment product that tracks indexes. On paper it looked pretty good and secure, which made me think about how can I do it myself. You see, even though I liked the Standard Bank product, it would only vest after two or three years or four years, and at this point of my life I'm more into liquid investments.
Around March 2022 I invested some money into US based stocks, and SASOL. The idea was that I was going to go into a "normal" cyclical climate and gain valuation on tech stocks and the energy crisis due to the war. Well, the rest is history, and as we all know there is a protracted war messing with the world economy. Investing in the stock market is a huge gamble and this time it's no different. So my appetite for the stock market has been depleted.
But is there an alternative? I used EasyEquities to buy shares and wedged in between the ZAR and USD menus is a TFSA menu. God knows that TFSA means, but browsing around there shows some pretty interesting investment opportunities. As I pressed on them I saw that index funds seems to grow nicely.
So I've now decided to make this my mission. The beauty of this strategy is also that with EasyEquities things are fairly liquid, so once I get bored or tired or need the money elsewhere I can just withdraw it.
So now that you know the back story, let's spell out this mission:
Use an index fund
Focus on past history
Focus on something that still grew during Corona. In my opinion those funds should be pretty resilient because a lot of things took a dive.
Do something that on short notice can be cashed out
With regards to Corona, it's pretty obvious that tech and pharma grew tremendously. However, one has to be careful because now with war in Europe and super high inflation and energy costs, the world economy is sinking meaning less spending across the board.
To get started, let's focus on the first fund that is catching my eye. It's called 1nvest S&P500 Info Tech Index Feeder ETF and here is it's graph with an analysis:
We're ignoring maximum return of 185.09% and solely focusing on the trend-line and real values on the 1st of January 2020 and then the 1st of January 2022. To get those dates I had to hover over the graph, which is a bit tedious but I'm taking the pain so that I can blog and learn and hopefully make some money.
Fund | 01 Jan 2020 | 01 Jan 2022 | Growth |
|---|---|---|---|
R 8.06 | R 17.44 | 100%+ | |
R 44.51 | R 71.16 | Not 100% | |
R 42.87 | R 72.03 | Not 100% |
After clicking through every single graph on the "TFSA" "ETFs" menu I discovered that pretty much only one fund would have doubled the money in 2 years. The other two also seems pretty cool but not 100% growth. They are both tech related it seems.
So would it be safe to assume that investing in tech right now (16 November 2022) is a good idea? I'm not sure. Amazon is laying off people, Facebook fired 13% of their staff, and Twitter let half go.
Tech stocks are bell weathers of the economy and when economies tank tech will tank too. Corona was also a "once-off" event that actually had the opposite effect on tech.
My conclusion for now? Hold'em.