Don’t panic

Finweek English Edition - - Creating Wealth -

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is change, an as­tute in­vestor must be alert to new trends and in­vest­ment in­no­va­tion and not stick blindly to outdated modes of in­vest­ment.”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.

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