Top Investment Opportunities in South Africa

List of Top Investment Opportunities in South Africa 2020

It’s natural for you to protect your capital and be careful in selecting the best investment options. Still, you might ask if there are investment opportunities in South Africa that you can try out despite the crisis we’re experiencing.

Here are the prospects to consider putting your money into:

Investment in Real Estate

1) Real Estate

Building homes, making improvements, flipping houses, and renting properties are always hot in the market. These are very rewarding investment opportunities in South Africa, but the cost of entry is high.

With what’s happening with the world, it’s expected that there will be a surge in the supply of properties for sale as more people are unable to pay their mortgages. The prime rate has already been slashed off by as much as 2.5%, but this didn’t save the market from the falling prices of properties.

This is where the silver lining lies for investors. 

The lower price of properties is exactly the scenario that you should be waiting for. This will give you the chance to purchase undervalued properties at bargain prices. Remember to study the prospected value of the property once the market recovers so that you’ll make better decisions on which asset to buy now.

Investment in Agriculture

2) Agriculture

Agriculture is one of South Africa’s strengths as it has made the country independent of imports. Thanks to this, most of the food consumed by the citizens is locally produced, so they’re cheaper and easier to sell. 

This investment opportunity can generate large profits because you can recover your capital faster.

Investment in Stock Markets

3) Stock Markets

The coronavirus pandemic has brought down stock markets across the globe, and South Africa is no exception. The JSE took a hit last March, shedding off as much as 20 000 points from the previous 57 000 levels.

Shares of major companies like Nedbank, Woolworths, and FirstRand hit their lowest levels in recent history. Other companies are sharing the sentiment and are also experiencing the effects of a bearish market. 

Many shares are now cheaper than before, providing one of the most rewarding investment opportunities in SA for bottom pickers. This is a once-in-a-decade chance for many investors like you to acquire the shares of large established companies that are trading at low valuations.

The risk-return ratio of investing in stocks is extremely attractive right now, especially to speculators. The finance, for instance, is one of the sectors expected to quickly recover once the economy bounces back to its feet.

But before you dive in, remember that the macro picture of the SA market isn’t that attractive yet. Not every stock is an investment opportunity to pounce on. You must differentiate stocks that are cheap because of their actual performance from those that are undervalued because of the current situation.

4) Tax-free Investment Account

A tax-free investment account will never go out of style because of its enormous advantage, regardless of existing market conditions.

During these trying times, it’s difficult to anticipate which sector will perform better over the other. By diversifying investments and maximizing tax advantages, you’ll have a better chance of profiting despite the uncertainty in market conditions. Here is a guide to follow on how you can make a tax-free investment in South Africa.

Investment in Precious Metals

5) Precious Metals

Precious metals are known to be hedge assets in times of financial turmoil. Because of this, the world is witnessing the rising prices of gold and silver breaking previous highs. Gold recently reached US$2,000 per ounce, nailing a new all-time high record.

The uptrend is expected to maintain its course, at least for the rest of 2020, while the development of a vaccine for the virus is still far from being completed. Although it may be too late to put your money into gold because of its already dizzying price, there are other precious metals like silver and platinum that offer viable investment opportunities for SA investors.

When you’re considering buying bullion as an investment opportunity in South Africa, make sure you purchase only from authorized sellers. Study about the production, premium, commission, delivery, and storage of bullion assets to make sure you make the most out of your investment.

6) Government Bonds

If you’re looking for investment opportunities in South Africa with little risk, go for government bonds.

Treasury bills, treasury notes, and municipal bonds provide relatively low risk compared to corporate bonds and other investment vehicles because these debt instruments are backed by the government.

Ten-year SA government bonds can yield around 9% which is a very attractive rate for investors. Even if you consider inflation rates, you’ll still earn a handsome profit when the bond matures.

With the uncertainty that the pandemic has brought to the world, it would be reassuring to be able to invest in an instrument with low risks and considerable gains.

7) Start-up Businesses

While large businesses are reeling from the economic effects of the pandemic, start-ups are popping one after another, battling to gain ground while the giants are asleep. 

The increasing number of people who want to do business opens investment opportunities for you to dive in. You can be an angel investor and fund their projects, so you can also partake in their profits should their endeavour succeeds. 

Online platforms like the Angel Investment Network make it easier for investors to choose from legitimate entrepreneurs that need funding for their operation, expansion, or project kick-off. Just register and complete your profile to start browsing through countless investment opportunities in the local and international markets.

Investment in Cryptocurrencies

8) Cryptocurrencies

Like precious metals, cryptocurrencies such as Bitcoin are soaring to new highs as more people put money in them as a sort of hedge.

Although Bitcoins and other digital assets are not monitored by the government, they’re widely accepted by investors and speculators. However, since these alternative assets are not regulated, their prices can widely fluctuate.

Only experienced traders are advised to go for this investment opportunity. Beginners should stay out of the game or risk only a small and manageable size for trading this asset.

 

Final Thoughts

Despite the ongoing crisis that the country is experiencing, there are still attractive investment opportunities in South Africa that are worth looking into. If you know your investing capacity and appetite for risk, you’ll easily spot which assets to put your money into.

Remember to always monitor your investments and don’t put all your eggs in one basket, especially that the market conditions are generally unfavourable for now.

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