THAT’S WHAT LOCAL private client managers are also saying. Don’t panic, don’t cut and run. “It’s a fundamental choice between fight or flight – the primitive option faced by all animals when dire threats arise,” says Tony Barrett, head of wealth management at Barnard Jacobs Mellet Private Clients Services in Durban. “The BJM PCS advice is firmly that it’s time to fight.”
Barrett says he’s encouraging clients to take a contrarian view and use all the weapons they have. He recommends four “weapons”. “Strategic planning. Develop an appropriate plan and relevant strategy that reflects the investor’s unique needs and circumstances.”
Second is to focus on quality. Good companies come out on top when the going gets tough. “The current environment enables investors to buy these companies at sale prices,” he says, adding that stock selection should be guided by credible research.
“Innovation. When the only constant is change, an astute investor must be alert to new trends and investment innovation and not stick blindly to outdated modes of investment.” As an example, Barrett says almost all the JSE’s September losses were cushioned by at least one multi-manager investment fund, a relatively new type of investment product.
Fourth is diversification. It’s an old investment principle, but Barrett says that in volatile times well-judged tweaks to a portfolio mix are necessary for optimum results.