I have a lot of enquiries of what to invest in at this time, so I thought I would share what I personally believe to be investments that will yield superior returns over the next two years.
Property:
As interest rates decrease, listed property funds are yielding attractive returns both on income and capital gains. In fact the Stanlib Multi Manager Property Funds has boasted gains of 33% over the last 6 months.
I would definitely stay away from local residential property (as an investment vehicle).As I feel compared to the rest of the world our residential property index needs a major correction of around 20-30% market correction. The short supply of credit and 400% increase in bond defualts back up my view point.
UK Property is really attractive to South African investors. Especially those who want to invest their offshore funds with a very low risk exposure. The reason being, UK property prices and interest rates are at the lowest in decades. Yet, rental demand in selected areas is still high. Selected UK property investments are cash flow positive from month one! Rand depreciation over time makes this even more attractive for income investors. I feel UK property is the single biggest investment opportunity in the world today that will yield excellent returns in the next two years. I will be brave enough to estimate that in rands terms SA investors could expect returns on investment between 20-35% within the next two years. If you would like more information on this please feel free to contact me.
Gold, for those of you who have been following my blog you will know by the many articles I have written that I'm a "Gold Bull" (meaning I believe the Gold price will continue to rally). We have seen the Gold price rally over the last four years, yes even before the credit crunch. I believe this will continue and I do see the Gold price moving over the $1000 mark shortly. I think that credit crunch will make investors look for more tangible value in their investments and Gold is the age old currency yet has experienced Little growth (in real terms)since Gold peaked in the early 80's.
Resource stocks such as Sasol, Implats, BHP and Anglo I believe are trading at massive discounts and as a value investor I would be buying these stocks as they will be the first to bounce back as the market starts to recover.
