I would like to reply to a comment received on my Jan 2009 Blog regarding investing in Satrix.
If you make any comments and would like me to reply to them, please share your e-mail address.
My reply:
If you consider the time my blog was posted you will notice that it was the 12 Jan 2009. The 2008 Market Crash was very fresh in our minds and nobody had any idea where the bottom of the market was going to be. If you invested your R20 000 all at once on the 12th, you would have had -18% return 2.5 months later. JSE All Share went from 22 183 to 18 120! That would have destroyed the confidence of already shattered investors.
It would have taken 6 months to get back to your R20 000 investment.
So, the reason the “Rand Cost Averaging” principal (phasing in) was more important than the “economies of scale” principal was due to the uncertainty in the market at that stage.
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