Advice and analysis

[u/peterjza]

Hello,

I would appreciate some advice and analysis on my current investment strategy.
I'm 43 years old and, after all my expenses, I have approximately R40,000 per month available to save and invest.

My current position is:
I contribute R11,500 per month to a Sygnia Skeleton 70 Retirement Annuity (RA).
My TFSA is fully maxed each year and is invested in the Satrix MSCI World ETF.
I have a home loan, and for the past couple of years I've directed most of my surplus cash towards paying it down. I've managed to pay off roughly 50% of the bond in less than two years.
I currently have around R80,000 invested in the MSCI World ETF and about R10,000 invested in the Satrix Nasdaq 100 ETF.
I also have approximately R10,000 in EasyEquities, where I've been investing in a few individual AI-related stocks, some of which have performed very well.
I do not maintain a separate emergency fund or savings account, as I treat the surplus funds available in my flexi home loan as my emergency reserve.

One of the reasons I've prioritised paying down my bond is that I'm somewhat concerned about the potential impact of AI on my future employment and earning capacity.

After reading the Wiki, I can see that increasing my RA contribution may be worth considering, and I plan to look into that.

My main questions are:
Is it reasonable for my TFSA to remain fully invested in the Satrix MSCI World ETF?
Going forward, what would be a sensible allocation of my monthly surplus between:
Additional bond repayments, and Investing in equities?

If I do increase my equity investments, should I continue focusing on MSCI World, or would it make more sense to allocate more towards the Top 40, Nasdaq 100 or something else?
Given my age, current investments, and concern about AI-related career risk, does my overall strategy seem balanced, or am I being too conservative by prioritising the bond?

Any thoughts would be appreciated.

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[u/Consistent-Annual268]

This is probably the best written and laid out post we've ever seen on this sub. Thank you OP for providing almost everything we need to answer you in a clear and easy to read way. You just missed out mentioning the interest rate on your home loan plus the disgusting monthly figures you are paying into each investment vehicle. Also, mentioning what your job or industry sector is would be helpful context.

Basically, you're doing almost everything right, very few notes: 1. I would continue investing in a World Index Fund, especially since it's your retirement money. You should not try to bet on which sectors the market has underpriced or will continue to underprice for the next 50 years until you die, so rather just buy the whole market 2. Paying down your home loan after maxing your TFSA and RA and before any additional discretionary investments makes sense. It's a good balance between taking full advantage of tax breaks, while simultaneously playing the role of an emergency fund and what would ordinarily be the bond portion of your portfolio. If you feel love you're putting too much into the loan and not enough into investments, then decide for yourself on a fixed ratio and stick to it going forward 3. I would not invest further in NASDAQ 100, for the same logic as #1 and because it's a completely made up index with no thematic investment reason to exist ("the top 100 non-financial companies that happen to list on this one stock exchange instead of any of the others"). Also, you're already holding those 100 companies in the World Index Fund so all your doing is further concentrating instead of diversifying 4. I would consider holding 20% of investments in the Satrix40. It is a good practice to tilt towards the home country in which you'll retire, since it follows local economic factors (inflation, interest rates, market growth, currency value) that a World Index Fund doesn't account for.