SENSIBLE GAME PLAN
It is imperative that one has a game plan in place. By Alex Grunewald, MD / Private Wealth Manager- NFB Port Elizabeth.
I
IF I WERE A BETTING MAN
sit at my desk contemplating what 2017 has in store for us, and have been asked the same question in a number of client meetings I have had this year so far: " what happened to my investments last year and what is going to happen this year?"
In order to get one ' s head around this question, one need only take a look at the following scenario: if you had given me £ 5 last year to bet on anything( I know you are thinking what the hell is an investment advisor betting my money on, but please bear with me and the picture will soon become clear) and I had bet on only three things, namely:- Leicester City winning the Premier League- England leaving the European Union( Brexit)- Donald Trump winning the presidential election, that £ 5 note would have given me £ 1,400,000; yes, you are reading correctly... 1,4 million pounds!
So if the gamblers did not see it coming, realistically, how on earth would the Asset Managers, who are looking after our investments, have seen it coming? Now I must clarify: The British Premier League and more importantly, Leicester City winning the Premier League, had nothing to do with poor returns on our investments, but the“ goings on” of one Mr Trump and the Brexit debacle most certainly had a large amount of influence on markets. And it was something that very few actually predicted happening. had the discussion with clients I have reiterated that we cannot control external issues; what I will always go back to is our original proposal( game plan) and the investment horizon that we both agreed upon when we originally began the plan. As long as that is in place and meets the needs of the clients from the outset, any peripheral noise or going on, although affecting the investment in the short term, should have no major affect on the greater plan in place. I must stipulate that the due diligence in putting the proposal together with the client has to have been done and tweaking fund selection may happen over the course of the investment, but as long as the correct plan was determined from the outset, there should in reality be no knee jerk reaction needed.
Therefore, to answer the question that I began this article with, " what is going to happen this year?" The truth of the matter is that I do not know, but as long as a plan was in place to begin with and that plan met the risk profile, investment horizons and goals of the client, there should not be too much of an issue around short term volatility in the market.
In conclusion, it is imperative that one has a game plan in place when investing- when last did you check yours? We are more than willing to assist you should you not have something in place.
So please, come and visit us in our PE office and don ' t forget... our coffee is great.
Now that is all good and true, but how does it tie back to your investment and the poor investment returns you may very well have experienced during 2016? The point I am making is that when I have
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8 sensible finance Mar17