Ferrari versus investments
LET THE RACE BEGIN: INVESTING A WINDFALL
The portfolio’s value will be tracked against that of the car.
Some two years ago I was looking for a property investment that was (a) not too expensive, (b) could generate an income, (c) I could use occasionally and (d) was a lock-up-and-leave. The Polo Village at Val de Vie, in the Western Cape, ticked all these boxes and I put my name down for a unit. Did I mention that one lucky purchaser was to win a Ferrari California Turbo by lucky draw, then valued at around R3 millon?
And so one fateful evening in October 2016 my name was drawn.
My better half and I were more than blown away. For a year we enjoyed driving around the Western Cape in our blood-red Ferrari.
Holding costs
But then the financial adviser in me took over, calculating the opportunity-, insurance and services costs and comparing them with the estimated costs of two students to care for: one with three years to go at school and the other beginning a fouryear university career.
The Ferrari had to go
And so I was left with the pleasant but daunting decision: how to invest the windfall-proceeds of R2.5 million, after some small debts were settled.
Here was an opportunity to create a higher-than-normal risk investment portfolio, enabling me to choose from any asset class anywhere in the world, and to track its value against the Ferrari California’s value over time.
Here are a couple of ground-rules:
1. All funds chosen will be available to any SA investor, on one or more local investment platforms. I’ve selected the Investec platform.
2. All investments will be done at normal retail rates, with an advisory fee included, so as not to distort the returns.
3. It’ll be managed by myself and any changes will attract capital gains tax, if applicable.
4. I hope to report back on the portfolio’s performance every six months. It has a five-year investment horizon, is aggressive and will have a high degree of volatility.
5. It will, in a sense, represent my best investment views for all to see – a daunting prospect.
6. It’s not meant to represent investment advice in any form. Any investor following this portfolio does so at their own risk.
I spent considerable time over December reading and contemplating views and forecasts from a wide range of investment commentators, locally and abroad. This is my portfolio:
Sygnia 4th Industrial Revolution fund: 15% Coronation Emerging Market: 30% Prescient China Fund: 15% Sanlam India Fund: 15% MI Plan Global Macro fund: 25%
I’ve done a full Morningstar analysis on this portfolio. Interested readers can request one from me. I’ll also track this portfolio against the values of similar Ferrari Californias over time, to determine which is best: portfolio investments or hard assets.
So as they say: let the race begin and may the best man (or car) win.