Answer:
I think that Satrix is a great component of a good retirement plan. It enables you to invest directly into the stock market without having to be a total expert and have wads of money. ETFs are viable medium to long term investments.

So how does it work? Basically an ETF is a listed share that replicates the composition of an index or a pre-selected bundle of shares, and is traded the same way as an ordinary share. It is made up of an index unit trust fund and a listed investment company. An ETF invests in the same way as a unit trust index fund.

You said you want to invest the money for a period of five years; this should be fine but you need to bear in mind that the markets may be down when you want to cash in, so if possible, be flexible about the time period you invest for and keep a watchful eye on the performance of your portfolio.

One of key elements of a good investment strategy is diversification. In other words you should not limit your investments to the share market entirely.

You should have a mix of property, cash, bonds, equities and some kind of retirement annuity. This way the overall performance of your portfolio should not fall prey to volatility in the various market segments. Log onto www.satrix.co.za for more information.