How many hours of work does it take to invest in the JSE?

An interesting chart from Codera shows how much easier it is for a South African to purchase a piece of the JSE Top 40 Index Tracker than it is for a US worker to enter the stock market.

“An individual earning the average monthly wage in South Africa (just under R30,000 per month) would need to work approximately half an hour to afford one JSE Top 40 index tracker to get exposure to the index. This has only increased slightly since 2008. In the US, by comparison, stock price growth has dramatically exceeded wage growth since the global financial crisis. This highlights the relative affordability of domestic equity investment but also that wages and stocks have grown at a more comparable rate in South Africa.”

To that we would add that the JSE Top 40 has underperformed US equity markets by a country mile for the last decade or more. That explains in large part why it is more affordable. The JSE is also a less exciting market for those seeking sector and country diversification.

Still, an encouraging piece of news that should inspire people to invest more locally.