Podcast: What is “good” performance?

Kristia van HeerdenLatest, The Fat Wallet

If an investment grows more than a savings account interest rate, is that a good investment? If it performs on par with the Top 40 index, but below inflation, is that good or bad?

It’s surprising that we got 70 episodes into this podcast without ever discussing when a share is performing well. On the face of it, it seems almost too obvious to warrant a conversation. How much do I want a share price to rise? Infinity!

In this episode we discuss some of the metrics you can use to determine how your investments are performing. Identifying an under-performing share is pivotal to making choices about which shares to sell and which to give time to recover. Kind of important, no?

Fernando Nieuwfelt dangled an intriguing hypothesis and we couldn’t resist, “I switched out a local market cap index for the STXEMG. The performance is very similar, it’s less volatile and more diversified.”

We talk about the merits of selling ETFs with purely local exposure in favour of the new Satrix Emerging Markets ETF.

Speaking of things we couldn’t resist, Mike O’Donoghue issued a challenge. Let’s find the Fat Wallet listener whose tax-free account is performing best. Simon and I did a quick comparison and I was happy to take the lead with just shy of R113 000 on Thursday, 26 October. I’m feeling strong. Shots fired.

In case you missed it, we released a bet-you-didn’t-see-this-coming bonus episode last Friday. We help a listener make a difficult financial choice using our five financial building blocks. Listen here.

Thanks for listening to The Fat Wallet Show.

Kris


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