The current market conditions (and I am somebody who felt that the market was overheated in October last year and sold out of my shares) are beginning to offer some value, particularly if you get government assistance in purchasing your shares. Don’t forget when your accountant works out what tax you have to pay every year, he is going to ask you whether you made any contributions to retirement annuities, as you can deduct those and essentially, it means that the taxman is contributing towards your retirement and thus your share purchases. With the index currently at 18 000 and assuming an overall 30% rate, you would effectively have to see the overall JSE Index drop below 12 400, from a height of 33 000, before you would be under the water if, at this time, you put your contributions into retirement annuities. I have made some pretty good predictions in my newsletters over the years and this is one you cannot really go wrong with unless we start using wheelbarrows to take our money to the local shopping centre, in which case it is not really going to matter where your money is in any event! All I am saying, is if you are investing on a long-term scale, and having the tax benefits of a lump sum contribution to your retirement annuity, you will get tremendous value right now.
This does not constitute investment advice. Please speak to your own financial advisor.