In the current investment landscape, filled with uncertainty and volatile markets, the debate over the merits of money market investments vs equities has taken the spotlight. This is mainly because of the desire of investors to seek safety for their accumulated capital, given the levels of uncertainty. In the short term, the money market has a place to play; however, for longer-term investors, this becomes unfavourable.
With current interest rates being at the highest level in the last 10 years, it makes money market investments rather attractive, given the fact that the money market offers a safe haven and a sense of comfort.
Is my capital safe from rising inflation?
The challenge of preserving the value of your wealth in the face of ever-rising inflation has become a pressing concern for investors. Inflation erodes your wealth in a silent manner, and investors who have medium- to long-term investment timeframes need to consider alternatives to money market investments.
As an example, compare the past returns of the money market, SA equities and global equities vs the impact of inflation over a five-year period:
- Money market returns have beaten inflation by only 0.91%;
- South African equities have beaten inflation by 4,06%; and
- Global equities have outperformed inflation by 9.66%.
Source: Profile Data (31 August 2023)
From the above graph, money market returns do not give you a chance of beating inflation at a superior level on a medium- to long-term basis.
Taxation: Making money market investments more unattractive
Taxation still needs to be factored into this equation, making it even less desirable, especially for taxpayers paying high tax rates. Any interest earned over and above the exemption rate will be fully liable for taxation at the investors’ marginal tax rate.
Source: Sars, 31 August 2023
What are the alternatives for long-term investors?
For long-term investors with a somewhat aggressive risk profile and long-term time frame, you would be faced with a decision to invest in South African equities or global equities. Deciding on which approach to follow would require a specialist to help you navigate through the complexities. On an overall performance basis of South African equities vs global equities, the most rewarded asset class is global equities.
Source: Profile Data (31 August 2023)
Generally, the portfolios that are structured with balanced and aggressive funds aim to beat inflation as well as money market investment returns. There are many alternatives to money market investments that will be suited to your needs.
Carefully constructed portfolios are aspects included in a sound financial plan. To enhance the possibility of achieving inflation-beating returns, additional calculated risk needs to be taken within portfolios. This includes the decision of holding cash segments which are best approached with the guidance of a financial advisor. Research by global company Vanguard has found that using professional advice has proved to be beneficial over time.
Megan joined the Brenthurst Wealth team in March 2026 as an Administrative and Fiduciary Services Assistant at our Val de Vie Office in the Western Cape. Prior to joining Brenthurst, Megan gained three years of experience in the retail sector, where she developed management and client service skills.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Esmarelda Isaacs-Andreas joined the Brenthurst Wealth Stellenbosch office in October 2025, taking on the dual role of Receptionist and Fiduciary Administrator.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Ashley joined Brenthurst Wealth in January 2025 as Office Administrative Assistant and Receptionist for the Stellenbosch Office.
René Heystek joined Brenthurst Wealth in November 2023, as receptionist and administrative assistant in the newly established George/Garden Route office.
Michelle Heystek has built a career in the financial services over the last two decades, after obtaining her B.Com degree in Financial Management in 2005. Once she joined Brenthurst in 2006, she continued her academic journey, obtaining her Certificate in Wealth Management from INSETA in 2007, followed by a Postgraduate Diploma in Financial Planning from the University of the Free State. In 2008, she earned the Certified Financial Planner (CFP®) designation.
Anelle joined Brenthurst Wealth as a Receptionist and Administrative Assistant to Brian Butchart in the Cape Town office in December 2023. She has a wealth of knowledge from working as a liaison between Financial Advisers and clients at TMA and Absa Investment Management Services (Aims) since 1998. She obtained her B. com degree from the University of Port Elizabeth in 1997.
ADMITTED ATTORNEY | FINANCIAL PLANNER & HEAD OF BRENTHURST FOURWAYS
Sanet was appointed in April 2020, joining our Cape Town team as an Executive Administration Assistant to Renee Eagar. She has been in the financial services industry since 1990. Her previous experience includes positions at Sanlam, BJM and ABSA. She spent her last 12 years working at Alexander Forbes Private Client Wealth as a Senior Wealth Management Assistant. She has received numerous accolades over the years which include but not limited to, Alexander Forbes Client Service Excellence – Silver award in 2014,2015 and 2017. Sanet has also obtained her Certificate in Wealth Management (NQF 5) in 2012 and achieved “Best Student of the Year” from Moonstone.
Maria Smit is a Certified Financial Planner® with over 10 years of experience in the financial planning industry.
