Real Estate Investor Magazine South Africa September/ October 2019 | Page 62

INVESTMENT INTELLIGENCE
Investors should
remain patient
Avoiding the perils of performance chasing
BY VICTORIA REUVERS
For several years now
South African investors
have received little
reward for taking risk
- particularly those
invested in South African
equities and/or listed
property companies.
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SEPTEMBER/OCTOBER 2019 SA Real Estate Investor Magazine
T
hose invested in low or high equity (regulation 28
compliant, pre-retirement capital) funds and portfoli-
os haven’t been much better off due to disappointing
returns over the past five years. The poor returns can be at-
tributed to a range of factors, with limits on offshore alloca-
tions combined with disappointing local equity returns at
the fore.
The poor returns have introduced a far higher rate of
churning between investments than in previous years. It
is human nature - in times of low returns, investors look at
previous winners and switch their investment to include these
performers, hoping for the same outcome as in the past.
To quote the legendary Warren Buffet, ‘The investor of today
does not profit from yesterday's growth’. As much as we are
warned that past performance is no guide to the future results,
many investors still switch to the latest hot offerings just before
the inevitable slump in performance.