bets with the money that must ensure that you are not old and poor one day . Rather invest that money in boring , diversified portfolios .
• Do not mess with your portfolio too much . Active trading is almost always bad for your wealth . And especially after a crisis , do what most good investors do – sit on your hands and do nothing .
• Notice the usual characteristics , the common features , the warning lights , of most dubious investment opportunities and pyramid schemes . It is “ exclusive ” or “ urgent ”; there are famous personalities ( often sports stars ),
who are not investment experts , connected to the product ; others have already made phenomenal returns ; the sales person is dressed to kill ; the much-betterthan-market return is “ guaranteed ”; there is some secret formula or recipe behind the revenue generating engine ; and “ this time it is different ”. In short , if you hear the word “ tip ” around the braai , rather excuse yourself and go help with the salad .
• Finally , and I would argue that this is the most important of all , get a financial adviser , a rational mentor , somebody that you trust , against whom you can soundboard
your ideas , to advise you , even if you have to pay that person . In the context of a performance difference , a penalty , of around 3.5 % between what funds return and what individual investors in those funds earn , then an advice fee of 0.5 % per annum ( or whatever you negotiate and agree with your adviser ) will be money well spent .
Theo is chief executive of Galileo Capital , and one of South Africa ’ s leading wealth management professionals . He is a renowned media personality on personal financial management .
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