---
title: "Three principles to guide smart investment decisions"
description: "Don't panic over fees — give each rand a job: set horizons, use tax-efficient wrappers and accept only the risk needed to meet your investment goals with the money you have."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "FINANCE WELLNESS COACH"
author: "Kenny Meiring"
author_url: "https://www.dailymaverick.co.za/author/kenny-meiring/"
canonical_url: "https://www.dailymaverick.co.za/article/2026-08-16-three-principles-to-guide-smart-investment-decisions/"
published: "2026-08-16T13:31:19"
lang: "en-ZA"
word_count: 492
---

# Three principles to guide smart investment decisions

> Don't panic over fees — give each rand a job: set horizons, use tax-efficient wrappers and accept only the risk needed to meet your investment goals with the money you have.

By Kenny Meiring · Published 16 August 2026, 15:31 SAST

## Key points
- Divide the pot into time-based “buckets” (short, medium, long) so parts of your portfolio can safely be conservative while others chase inflation-beating growth.
- Structure for tax efficiency: use tax-free savings (R46,000/yr; R500,000 lifetime) and consider endowments if your marginal tax rate is above 30% — but let goals, not tax, dictate asset choice.
- Fees matter, but cheaper isn’t always better — weigh cost against net performance and volatility, and only take the amount of risk needed to meet each bucket’s objective. Read the full piece for examples and practical steps.

## Content

**Question**

I inherited R3.8-million and want to invest it sensibly. There is so much talk around costs and types of investments that I am confused. What should I look at?

**Answer**

Without knowing your full situation, I cannot give you any categorical recommendations, but what I will do is share three principles that you should consider when making an investment.

### 1. Consider your timeframe

When investing, there are two important things to balance. You do not want to be forced to sell investments when markets are down because you need the money, but you also need your investments to grow faster than inflation over time.

To manage this, I like to divide investments into three buckets, based on when you are likely to need the money.

![P22 Kenny 1408](https://cdn.dailymaverick.co.za/i/vmZ6RUd83xdZTTHoZmNATAzp4a0=/200x100/smart/filters:strip_exif\(\)/file/attachments/2996/Screenshot2026-08-13at155921_939652.png)

The important point is that you do not have to choose between being “safe” or “aggressive” with all your money. Different parts of your portfolio can take different levels of risk because each bucket has a different job to do.

### 2. Make your investment tax-efficient

How you structure the investment makes a significant difference to the return you ultimately keep. For the longer-term parts of the investment, I would consider the following:

**Tax-free investment**

If you have not yet used your full lifetime allowance, I would make use of this every year for part of your long-term investment. You can contribute up to R46,000 a year, subject to a R500,000 lifetime contribution limit. Interest, dividends and capital gains earned in the investment are tax-free.

**Endowments**

If your marginal tax rate is above 30%, you should consider using an endowment for the long-term part of your investments. With an endowment, the tax rate is 30%, which makes this attractive if your personal rate is higher.

Tax, however, should never drive the investment decision on its own. First make sure the money is invested appropriately for when you will need it, then structure each bucket as tax-efficiently as possible.

### 3. Do not become obsessed with fees

Investment costs matter, but cheaper is not always better. A low-cost tracker might charge less than 1% and a hedge fund could cost several times more. It’s tempting to conclude that the cheaper fund must therefore be better, but this ignores what you receive for the fee.

I recently compared the performance of an equity tracker fund with that of an aggressive hedge fund over a 10-year period. The hedge fund was significantly more expensive, but after costs it produced returns that were about 2% a year higher, with lower volatility than the tracker fund.

Before investing, you need to give every rand a job, invest it for the correct time ­horizon, manage the tax intelligently and take only the amount of risk that the job requires. **DM**

*Kenny Meiring is an independent financial adviser. Contact him on 082 856 0348 or at financialwellnesscoach.co.za. Send your questions to*[*kenny.meiring@sfpadvice.co.za*](mailto:kenny.meiring@sfpadvice.co.za)

*This story first appeared in our weekly DM168 newspaper, available countrywide for R35.*

![Image](https://cdn.dailymaverick.co.za/i/tVVUy89tEiXMcrPAFicypE-wZew=/200x100/smart/filters:strip_exif\(\)/file/attachments/2996/DM-140826_950258.jpg)