Why investing in unit trusts just makes sense

You have your first decent paying job. Perhaps you are midway into your career and you realise just how time has passed you by. Or maybe you are at the end of your career and you need to know what to do with your one third of pension.

For all these scenarios, Unit trusts just make sense. Here are a few reasons why. One of the major reasons to consider a Unit Trust investment, is its sheer affordability. For as little as P200.00 per month, most investment management firms will have a unit trust solution for you, so you can stop worrying about whether you can afford to start investing. P200.00 per month! The question then becomes, can you afford not to invest?

Another reason we tend not to invest, is we worry about whether the investment options we have, are in fact the right solution for us. To this extent, unit trusts are a good gap filling solution while you decide on your preferred longer- term investment solution. This is because unit trusts tend to offer easy access with no upfront charges and no penalties for early exits/ redemptions. This means easy in and easy out, but your funds can earn a decent return while you shop around for other options.

This leads us to another discussion; liquidity. Often times when we invest, we tend to neglect just how frequently and how unpredictable life’s emergencies are. Money tied up in an illiquid investment, such as financial market investment with long term redemptions or perhaps even property, will be of little use in such an occasionality. For this reason, it is important to have liquid savings built up in a unit trust so you can cater to life’s emergencies with a minimum of fuss. While it is certainly not advisable to use your unit trust investment like a chequing account, unit trusts are typically liquid enough that you can access your money anytime for ( infrequent) redemptions.

The overarching argument for investing your money into unit trusts is however, to earn a return above inflation on your savings by having it in a highly liquid and well diversified investment instrument. While unit trusts may not beat inflation every year in high inflationary environments, on a longer- term timeframe, a good unit trust will at least match, but preferably outperform inflation so that the purchasing power of your savings is not eroded over time.

Whatever position you are in, whether old or young, investing for the long term or short term, unit trusts tend to make a lot of sense. They are discretionary, which simply means they are managed by an investment professional on your behalf. This takes away a lot of the stress from worrying about whether you are doing it right and the technicalities associated with investing.

The introduction of unit trusts by Kgori Capital, gives you an opportunity to diversify ones investment portfolio, especially during times where financial stability remains a priority for all. As a proudly Botswana business, we remain dedicated to helping Batswana reach their financial aspirations with our unit trust solutions.

Take away the fuss and start investing today. Happy investing!