1 00:00:00,120 --> 00:00:03,000 Speaker 1: You may remember a few weeks ago Warren Ingram in 2 00:00:03,040 --> 00:00:06,160 Speaker 1: Personal Finance said that people should stop playing with their 3 00:00:06,160 --> 00:00:10,879 Speaker 1: money basically invested wisely and leave it and don't mess 4 00:00:10,920 --> 00:00:13,640 Speaker 1: around with it. Don't chop and change. You will lose 5 00:00:13,680 --> 00:00:18,520 Speaker 1: money if you do, so that's his view. We spoke 6 00:00:18,560 --> 00:00:21,079 Speaker 1: to Charles Savage. He's the CEO of the Purple Group. 7 00:00:21,120 --> 00:00:23,800 Speaker 1: They own Easy Equities. They are the people who allow 8 00:00:23,840 --> 00:00:25,759 Speaker 1: you to trade literally on your phone, and as you 9 00:00:25,800 --> 00:00:29,120 Speaker 1: can imagine, he had a completely different view. He says 10 00:00:29,200 --> 00:00:31,880 Speaker 1: that no, people actually get much better returns if they 11 00:00:31,920 --> 00:00:35,000 Speaker 1: do chop and change, almost on a daily basis. So 12 00:00:35,120 --> 00:00:39,000 Speaker 1: tonight we will talk about the power of compounding. Does 13 00:00:39,240 --> 00:00:42,960 Speaker 1: staying invested all the ways win? Vincent Anthony Rocher is 14 00:00:42,960 --> 00:00:49,640 Speaker 1: the CEO of Differential Cap Investments. Vincent is with me 15 00:00:49,640 --> 00:00:52,800 Speaker 1: in our studio. Karl is joining us by zoom. Gentlemen, 16 00:00:52,840 --> 00:00:55,520 Speaker 1: good evening. Cole. Let me start with you. I mean, 17 00:00:55,520 --> 00:00:59,360 Speaker 1: it's a big topic. It's one that will outlive this conversation, 18 00:00:59,480 --> 00:01:02,280 Speaker 1: I'm sure, But I think the first point has to 19 00:01:02,320 --> 00:01:05,440 Speaker 1: be that one of the reasons people who prefer longer 20 00:01:05,520 --> 00:01:10,000 Speaker 1: term investing is simply the magic of compound interest or compounding, 21 00:01:10,040 --> 00:01:10,640 Speaker 1: I should. 22 00:01:10,400 --> 00:01:17,400 Speaker 2: Say yes, good evening, Steven, and thank you for the invitation. Definitely, 23 00:01:17,440 --> 00:01:21,920 Speaker 2: I think compounding and compounding of interest and compounding investments 24 00:01:22,120 --> 00:01:24,800 Speaker 2: is what we in the asset management industry call us 25 00:01:24,800 --> 00:01:27,920 Speaker 2: the eighth wonder of the world. And I think that 26 00:01:28,120 --> 00:01:31,399 Speaker 2: the longer you're invested in the market, you start returning 27 00:01:32,000 --> 00:01:35,440 Speaker 2: returns on your returns and that and if you stay invested, 28 00:01:35,440 --> 00:01:38,720 Speaker 2: you stay invested for a long long time, you would 29 00:01:38,720 --> 00:01:42,000 Speaker 2: definitely get very very good returns in line with the market. 30 00:01:42,640 --> 00:01:45,480 Speaker 2: And the biggest risk is not to mess around with that. 31 00:01:45,560 --> 00:01:47,600 Speaker 2: So I just stay invested, forget about a little bit, 32 00:01:47,680 --> 00:01:50,040 Speaker 2: and don't listen too much to the noise that you 33 00:01:50,120 --> 00:01:52,000 Speaker 2: hear every day in the news. 34 00:01:52,480 --> 00:01:54,880 Speaker 1: So that would mean you would basically ignore everything that's 35 00:01:54,880 --> 00:01:55,880 Speaker 1: happened in the last month. 36 00:01:57,480 --> 00:01:59,640 Speaker 2: I think. So you can ignore if you think what's 37 00:01:59,640 --> 00:02:02,600 Speaker 2: happening in the last month. Every day is a new day, 38 00:02:02,640 --> 00:02:04,960 Speaker 2: so that other the market. There's a significant amount of 39 00:02:05,000 --> 00:02:08,120 Speaker 2: volatility in the market, and I think if you try 40 00:02:08,200 --> 00:02:13,000 Speaker 2: to time the volatility or try to either sell end 41 00:02:13,000 --> 00:02:14,760 Speaker 2: of the evening or buy early in the next morning, 42 00:02:15,160 --> 00:02:17,400 Speaker 2: I definitely think you will not get good returns. So 43 00:02:18,560 --> 00:02:21,600 Speaker 2: usually investment is over long periods, and I think if 44 00:02:21,600 --> 00:02:24,200 Speaker 2: you think back over three years or four years from now, 45 00:02:24,600 --> 00:02:26,560 Speaker 2: I don't think you even think you will remember what 46 00:02:26,600 --> 00:02:29,280 Speaker 2: happened in the markets now because markets will correct over time. 47 00:02:29,360 --> 00:02:31,720 Speaker 2: So I would say ignore it. If you just think 48 00:02:31,760 --> 00:02:34,959 Speaker 2: about what happened yesterday where your markets were down, then 49 00:02:35,720 --> 00:02:37,920 Speaker 2: the announcement of the ceasefire and markets go are by 50 00:02:37,960 --> 00:02:40,720 Speaker 2: six seven percent. Today it goes down by four five percent. 51 00:02:41,120 --> 00:02:43,480 Speaker 2: Is very difficult to time this. So just they invested 52 00:02:44,200 --> 00:02:47,280 Speaker 2: and believe that everything should go back to normal over time. 53 00:02:47,280 --> 00:02:48,840 Speaker 1: And just so that we don't get caught in an 54 00:02:48,919 --> 00:02:52,240 Speaker 1: argument later. Long term, can we agree five years and longer? 55 00:02:53,240 --> 00:02:55,160 Speaker 2: I would say longer than five years. I think long 56 00:02:55,240 --> 00:02:58,480 Speaker 2: term should be fifteen to twenty years. You know, the 57 00:02:58,800 --> 00:03:01,440 Speaker 2: more the longer you invent, you know, the better the 58 00:03:01,520 --> 00:03:06,160 Speaker 2: returns are. I think it's very difficult to even time 59 00:03:06,240 --> 00:03:09,040 Speaker 2: the market. So for me, five years for me is 60 00:03:09,120 --> 00:03:12,120 Speaker 2: short to medium term. Long term is probably fifteen to 61 00:03:12,160 --> 00:03:13,040 Speaker 2: twenty years. 62 00:03:13,440 --> 00:03:16,480 Speaker 1: Vincent Anthony Raja've been trying to read your expression because 63 00:03:16,480 --> 00:03:19,359 Speaker 1: I'm I mean, do you agree wholeheartedly? I'm not convinced 64 00:03:19,360 --> 00:03:19,760 Speaker 1: that you do. 65 00:03:20,880 --> 00:03:24,960 Speaker 3: Not really, I think I share a different view. 66 00:03:25,000 --> 00:03:25,640 Speaker 2: I think. 67 00:03:27,720 --> 00:03:31,240 Speaker 3: Fundamentals matter, and I'll give you a couple of examples. 68 00:03:31,240 --> 00:03:36,160 Speaker 3: So for the last ten years, if you'd invested, for example, 69 00:03:36,200 --> 00:03:39,080 Speaker 3: in if you're a Chinese investor investing in the MCI 70 00:03:39,640 --> 00:03:44,520 Speaker 3: China Index, you've received close to no returns actually slightly 71 00:03:44,560 --> 00:03:48,200 Speaker 3: negative since twenty seventeen. So you can go through very 72 00:03:48,240 --> 00:03:53,320 Speaker 3: long periods where poor fundamentals can persist for a very 73 00:03:53,440 --> 00:03:57,119 Speaker 3: very long time. And then there's another interesting study which 74 00:03:57,120 --> 00:04:01,720 Speaker 3: I think is important for many investors too to consider it. 75 00:04:01,720 --> 00:04:04,040 Speaker 3: It was done by a guy called Hendrik Bessembinde which 76 00:04:04,040 --> 00:04:08,880 Speaker 3: studied over thirty zerousand companies from nineteen sixty to twenty twenty, 77 00:04:09,920 --> 00:04:15,080 Speaker 3: and almost all the returns on the S and P 78 00:04:15,320 --> 00:04:17,799 Speaker 3: five hundred oo in that you know, the US market 79 00:04:18,400 --> 00:04:22,880 Speaker 3: was generated by about eighty companies. So the point is, 80 00:04:25,000 --> 00:04:29,159 Speaker 3: you know, if the fundamentals are in your favor and 81 00:04:29,200 --> 00:04:34,520 Speaker 3: the underlying companies are profitable, and the macro environment is 82 00:04:34,560 --> 00:04:37,640 Speaker 3: in your favor, sure you can benefit from sort of 83 00:04:38,440 --> 00:04:40,800 Speaker 3: not paying attention and then the long term things can 84 00:04:40,839 --> 00:04:43,240 Speaker 3: work out for you. But if you go to you 85 00:04:43,240 --> 00:04:46,200 Speaker 3: know examples like you know Japan's last decade and one 86 00:04:46,200 --> 00:04:48,080 Speaker 3: would say the same thing has happened in China, where 87 00:04:48,720 --> 00:04:51,960 Speaker 3: a lot of companies started out reasonably expensive, but at 88 00:04:51,960 --> 00:04:55,080 Speaker 3: the same time sort of profitability and return on equity 89 00:04:55,120 --> 00:04:58,800 Speaker 3: has been really bad in China as a whole, and 90 00:04:58,839 --> 00:05:03,479 Speaker 3: that's led to equity returns in aggregate for the index. 91 00:05:04,200 --> 00:05:07,520 Speaker 3: So I think it's important to bear fundamentals at the 92 00:05:07,560 --> 00:05:10,440 Speaker 3: core of that decision. You know, So if the underlying 93 00:05:10,480 --> 00:05:14,080 Speaker 3: economy is good, it's made of companies with good growth potential, 94 00:05:15,120 --> 00:05:17,920 Speaker 3: exciting industries that you you believe have got long term 95 00:05:17,960 --> 00:05:22,680 Speaker 3: growth potential, then I think, you know, the concept of 96 00:05:22,880 --> 00:05:25,520 Speaker 3: staying invested for the long term is important. But I 97 00:05:25,520 --> 00:05:29,039 Speaker 3: think it's it's really important to keep on referring back 98 00:05:29,080 --> 00:05:32,799 Speaker 3: to that assumption around whether the fundamentals hold. 99 00:05:33,640 --> 00:05:38,000 Speaker 1: So, okay, so do you change? I mean I could 100 00:05:38,160 --> 00:05:41,000 Speaker 1: ask you, Vincent, how often do you change? If you 101 00:05:41,040 --> 00:05:43,400 Speaker 1: say events, then you could be in the last month 102 00:05:43,520 --> 00:05:44,880 Speaker 1: dropping and changing quite often. 103 00:05:45,520 --> 00:05:48,320 Speaker 3: Yeah, I think it's I mean, my my approach and 104 00:05:48,400 --> 00:05:55,800 Speaker 3: our approach is to constantly re evaluate your information set, 105 00:05:57,040 --> 00:06:00,800 Speaker 3: and if there's information that's that's critical to your assumptions, 106 00:06:01,240 --> 00:06:04,120 Speaker 3: you have to change your mind. If the information changes, 107 00:06:04,160 --> 00:06:08,240 Speaker 3: you should change that's that's my view. It's worked out 108 00:06:08,240 --> 00:06:13,200 Speaker 3: well for us. But I think, you know, as I said, 109 00:06:14,120 --> 00:06:16,600 Speaker 3: you've got to have a robust investment philosophy around that. 110 00:06:16,760 --> 00:06:18,680 Speaker 3: So I would agree with the comments that say, don't 111 00:06:18,720 --> 00:06:21,039 Speaker 3: let your emotions drive you. You know, so if it's 112 00:06:21,080 --> 00:06:25,080 Speaker 3: your emotions starting to affect you, step away from it 113 00:06:25,120 --> 00:06:27,560 Speaker 3: for a second, don't make the decision. Then focus on 114 00:06:27,600 --> 00:06:32,560 Speaker 3: the information at hand and what drives your fundamental decision 115 00:06:32,600 --> 00:06:35,880 Speaker 3: around why you've invested. So let's take an example. If 116 00:06:35,880 --> 00:06:39,040 Speaker 3: you've picked a company with very good long term return potential, 117 00:06:39,160 --> 00:06:41,920 Speaker 3: you think over twenty years, you know this company is 118 00:06:41,960 --> 00:06:43,560 Speaker 3: going to be around for a long time, it's going 119 00:06:43,600 --> 00:06:46,040 Speaker 3: to be needed. Let's say it's a utility company. Blah 120 00:06:46,080 --> 00:06:50,320 Speaker 3: blah blah. There's nothing wrong with every now and then 121 00:06:51,560 --> 00:06:55,080 Speaker 3: visiting your investment case to say, okay, this electricity company, 122 00:06:57,000 --> 00:07:00,839 Speaker 3: are there any alternatives to it? Is there? Tax changes? 123 00:07:00,920 --> 00:07:05,200 Speaker 3: Are the regulatory changes things that can materially damage my 124 00:07:05,279 --> 00:07:09,520 Speaker 3: investment thesis, because sometimes those things do come through and 125 00:07:09,560 --> 00:07:14,560 Speaker 3: can absolutely recavoc and your portfolios. 126 00:07:15,040 --> 00:07:18,000 Speaker 1: I mean, Cole would have been the utility company thirty 127 00:07:18,080 --> 00:07:19,200 Speaker 1: years ago, for example. 128 00:07:19,720 --> 00:07:22,040 Speaker 3: Yeah, absolutely, I mean there's plenty of those. 129 00:07:21,960 --> 00:07:24,720 Speaker 1: Yeah, Cole, I mean, I don't know if you have 130 00:07:24,760 --> 00:07:27,440 Speaker 1: a response to that. If you see it slightly, I do. 131 00:07:27,560 --> 00:07:30,280 Speaker 2: I do, so I think I think Vincent's point is 132 00:07:30,400 --> 00:07:33,160 Speaker 2: very valid if you're a portfolio manager. My comment was 133 00:07:33,240 --> 00:07:36,480 Speaker 2: as an investor, as a regional investor, so you definitely 134 00:07:36,520 --> 00:07:38,960 Speaker 2: want a portfolio manager to be in the market. They've 135 00:07:39,000 --> 00:07:44,040 Speaker 2: got investment philosophy. Different managers have different investment philosophies and 136 00:07:44,080 --> 00:07:46,200 Speaker 2: they need to stay true to their fundamentals. That's what 137 00:07:46,240 --> 00:07:48,760 Speaker 2: we do and that's what Vincent's business do all the time. 138 00:07:49,360 --> 00:07:52,120 Speaker 2: My comment was more as an investor, as a retail investor, 139 00:07:52,200 --> 00:07:54,920 Speaker 2: I think you need to leave it to the portfolio 140 00:07:54,920 --> 00:07:57,760 Speaker 2: managers or qualify to do this. They need to take 141 00:07:57,760 --> 00:08:00,560 Speaker 2: the emotions of the investment philosophy between come so I 142 00:08:00,560 --> 00:08:03,560 Speaker 2: agree with them. My comment was not as a portinci challenge. 143 00:08:03,680 --> 00:08:07,680 Speaker 2: My comment was as an retail investor, don't try and 144 00:08:07,840 --> 00:08:12,120 Speaker 2: chop and change between different in lesson philosophy. So that's more. 145 00:08:12,200 --> 00:08:15,200 Speaker 2: That's more my point, No, Shel, for sure, I get there. 146 00:08:15,480 --> 00:08:15,560 Speaker 3: So. 147 00:08:15,720 --> 00:08:19,160 Speaker 1: I mean when you are Carl, when you are looking 148 00:08:19,200 --> 00:08:22,400 Speaker 1: at investment over a long period of time, there's some 149 00:08:22,520 --> 00:08:26,720 Speaker 1: very interesting numbers. Numbers or generally make bad radio. But 150 00:08:26,800 --> 00:08:29,760 Speaker 1: one of the things that I found fascinating was when 151 00:08:29,840 --> 00:08:33,199 Speaker 1: you when you sort of look at your final cumulative 152 00:08:33,240 --> 00:08:37,560 Speaker 1: investment value, you actually only start to get to about 153 00:08:37,559 --> 00:08:41,120 Speaker 1: half of that right towards the end. This is not 154 00:08:41,240 --> 00:08:44,719 Speaker 1: a sort of so compounding is different to arithmetic. Thing. 155 00:08:44,840 --> 00:08:49,920 Speaker 1: The numbers don't work arithmetically. They work differently. So you 156 00:08:49,920 --> 00:08:52,520 Speaker 1: would expect to be halfway through your investment journey. So 157 00:08:52,559 --> 00:08:54,439 Speaker 1: you're going to work with thirty years fifteen years in 158 00:08:54,559 --> 00:08:57,080 Speaker 1: you might think, well, I'll be halfway. It doesn't work 159 00:08:57,160 --> 00:08:58,080 Speaker 1: like that at all, does it. 160 00:09:00,000 --> 00:09:02,880 Speaker 2: It doesn't work like that at all. So you definitely 161 00:09:02,880 --> 00:09:05,520 Speaker 2: if you if you look through it, so mean you 162 00:09:05,520 --> 00:09:07,600 Speaker 2: you really see the real value at the end. So 163 00:09:07,640 --> 00:09:10,199 Speaker 2: the last three to four years of you're let's say 164 00:09:10,200 --> 00:09:12,800 Speaker 2: you're in your retirement period. So if you have example 165 00:09:12,840 --> 00:09:15,320 Speaker 2: for the listeners out there, if you do work for 166 00:09:15,320 --> 00:09:17,839 Speaker 2: three years and you start saving in your pension funds 167 00:09:17,840 --> 00:09:20,120 Speaker 2: and you leave in your pension fund, the real value 168 00:09:20,520 --> 00:09:23,200 Speaker 2: if you look at all the all the calculations, probably 169 00:09:23,240 --> 00:09:25,000 Speaker 2: sits in the last four or five years. So our 170 00:09:25,040 --> 00:09:28,680 Speaker 2: advice always to all our clients and investors out there 171 00:09:28,760 --> 00:09:31,720 Speaker 2: is that you know, probably the best way of retiring 172 00:09:31,760 --> 00:09:33,520 Speaker 2: is if you can just push out your retirement by 173 00:09:33,559 --> 00:09:35,640 Speaker 2: another three or four years. So I'll give an example. 174 00:09:35,720 --> 00:09:38,760 Speaker 2: So you know, if you compounded roughly, let's say, fifteen 175 00:09:38,760 --> 00:09:42,040 Speaker 2: percent per year, and your retirement fund is roughly five 176 00:09:42,080 --> 00:09:44,559 Speaker 2: million million Rand at the end of your retirement period, 177 00:09:44,559 --> 00:09:46,880 Speaker 2: if you just stay invested for another three four years 178 00:09:47,480 --> 00:09:49,959 Speaker 2: and you try and just push out your retirement, you're 179 00:09:50,000 --> 00:09:52,560 Speaker 2: your five million rant would probably go gross by seventy 180 00:09:52,640 --> 00:09:55,280 Speaker 2: to eighty percent, sometimes double depends on the market. So 181 00:09:55,840 --> 00:09:58,920 Speaker 2: the last four or five years is incredibly important. Therefore 182 00:09:58,920 --> 00:10:02,160 Speaker 2: it is important not to not too usual pension money 183 00:10:02,160 --> 00:10:05,160 Speaker 2: and those things to to cover all that expenses. It's 184 00:10:05,240 --> 00:10:08,200 Speaker 2: it really makes a big difference. You know, that last 185 00:10:08,200 --> 00:10:10,559 Speaker 2: four or five years is absolutely critical interview. As I said, 186 00:10:10,600 --> 00:10:12,679 Speaker 2: if you can push it out, it's even better, and 187 00:10:12,720 --> 00:10:14,920 Speaker 2: then you see that that real compounding coming through. 188 00:10:16,360 --> 00:10:18,440 Speaker 1: One of the things that I always think about in 189 00:10:18,480 --> 00:10:21,320 Speaker 1: these moments, Carl, is is what happened in sort of 190 00:10:21,400 --> 00:10:23,480 Speaker 1: day two of the lockdown at the start of the 191 00:10:23,520 --> 00:10:26,360 Speaker 1: pandemic and how the market ready I think, dropped by 192 00:10:26,360 --> 00:10:28,959 Speaker 1: thirty percent at one point you would not want your 193 00:10:29,000 --> 00:10:32,679 Speaker 1: thirty years to end in that week, obviously, no. 194 00:10:32,760 --> 00:10:34,440 Speaker 2: So I think it is if you if you think 195 00:10:34,440 --> 00:10:37,040 Speaker 2: about nder you so it's very easy when you when 196 00:10:37,040 --> 00:10:39,480 Speaker 2: you say, and you you've got pension money, you keep 197 00:10:39,520 --> 00:10:41,720 Speaker 2: on contributing to it, you know, and your your draw 198 00:10:41,800 --> 00:10:45,600 Speaker 2: down you know is you know you're not using your drawdouns. 199 00:10:45,600 --> 00:10:47,679 Speaker 2: That is very simple because then you can see, you 200 00:10:47,720 --> 00:10:50,360 Speaker 2: can set through the cycles and you can be patient 201 00:10:50,360 --> 00:10:53,360 Speaker 2: and hopefully the day you retire it all works out 202 00:10:53,360 --> 00:10:55,400 Speaker 2: for you. But if you basically retire two or three 203 00:10:55,480 --> 00:10:59,000 Speaker 2: days after this significant draw down luck for example in COVID, 204 00:10:59,520 --> 00:11:01,800 Speaker 2: you can lock that in. But then it also depends 205 00:11:01,840 --> 00:11:04,440 Speaker 2: on how you invest, right, so if you invest, you know, 206 00:11:04,520 --> 00:11:06,880 Speaker 2: you reinvest that and you only have a four or 207 00:11:06,880 --> 00:11:10,839 Speaker 2: five percent drawdown period, then then then it's gonna affect 208 00:11:10,840 --> 00:11:12,720 Speaker 2: you a little bit less. So my advice again to 209 00:11:12,760 --> 00:11:15,520 Speaker 2: the to the listeners is that if you are in 210 00:11:15,880 --> 00:11:19,280 Speaker 2: your retirement pretty much, you know, let's say augment your 211 00:11:19,320 --> 00:11:21,480 Speaker 2: retirement was the last month your retirement was the first 212 00:11:21,559 --> 00:11:23,920 Speaker 2: or first off April, you definitely do not want to 213 00:11:24,600 --> 00:11:27,719 Speaker 2: you know, lock in your investments and and and have 214 00:11:27,920 --> 00:11:30,839 Speaker 2: long drawdowns you probably want to find ways to invest 215 00:11:30,880 --> 00:11:32,640 Speaker 2: a little bit longer, make your draw down for the 216 00:11:32,679 --> 00:11:35,840 Speaker 2: first month or two very very as low as possible, 217 00:11:35,880 --> 00:11:38,440 Speaker 2: and make sure that you probably you know, see the 218 00:11:38,480 --> 00:11:41,000 Speaker 2: recovery as a as the markets recover three or four 219 00:11:41,040 --> 00:11:41,600 Speaker 2: months later. 220 00:11:42,559 --> 00:11:46,199 Speaker 1: Vincent, It's a reminder of how important patient is patience 221 00:11:46,679 --> 00:11:47,400 Speaker 1: is in this game. 222 00:11:48,240 --> 00:11:51,920 Speaker 3: Yeah, the one thing I do agree with is around 223 00:11:51,920 --> 00:11:55,360 Speaker 3: the patients. And like if you've if you've picked a 224 00:11:55,480 --> 00:12:00,959 Speaker 3: theme to invest in, and that that that you know, 225 00:12:01,160 --> 00:12:04,720 Speaker 3: on a retail investor basis, generally you would have to 226 00:12:04,880 --> 00:12:07,679 Speaker 3: focus on something that's a bit more longer term, and 227 00:12:07,720 --> 00:12:12,160 Speaker 3: then you've got to stick around and be patient and 228 00:12:12,200 --> 00:12:15,080 Speaker 3: wait for that thesis to play out. Obviously, you know, 229 00:12:15,120 --> 00:12:17,920 Speaker 3: bearing in mind what I said, you know, don't take 230 00:12:17,960 --> 00:12:20,280 Speaker 3: your eye completely off the ball, pay attention to the 231 00:12:20,280 --> 00:12:23,720 Speaker 3: information I would say, you know, and if you don't 232 00:12:23,760 --> 00:12:26,400 Speaker 3: have the expertise, get the advice. You know, there's there's 233 00:12:26,400 --> 00:12:29,840 Speaker 3: plenty of really good financial advisors out there and professionals 234 00:12:29,840 --> 00:12:32,600 Speaker 3: out there that can help you. But I think that 235 00:12:32,720 --> 00:12:35,280 Speaker 3: patience is is critical. And the one thing you can't 236 00:12:35,400 --> 00:12:39,240 Speaker 3: argue with is the point around compound interest. It's powerful 237 00:12:39,280 --> 00:12:43,280 Speaker 3: if you've invested in companies and assets that are compounding. 238 00:12:43,960 --> 00:12:47,280 Speaker 3: That patience is a powerful tool to have on your side. 239 00:12:48,320 --> 00:12:51,679 Speaker 3: And when you you unnecessarily panic, you can destroy a 240 00:12:51,679 --> 00:12:52,840 Speaker 3: lot of wealth for yourself too. 241 00:12:53,679 --> 00:12:57,360 Speaker 2: You're ad to to you if you don't mind, if 242 00:12:57,360 --> 00:12:59,360 Speaker 2: you allow me just to advance and said, what I 243 00:12:59,360 --> 00:13:01,480 Speaker 2: think is important and what work we see a lot 244 00:13:01,520 --> 00:13:05,520 Speaker 2: in the market is that if you choose an a manager, 245 00:13:05,840 --> 00:13:08,800 Speaker 2: you choose other you know Vincent's Differential Capital, or you 246 00:13:08,840 --> 00:13:11,240 Speaker 2: choose solom Investments, you need to understand the philosophy of 247 00:13:11,320 --> 00:13:13,400 Speaker 2: your of your asset manager, right what is what is 248 00:13:13,440 --> 00:13:16,080 Speaker 2: their philosophy in and how do they invest money? So 249 00:13:16,080 --> 00:13:19,679 Speaker 2: it's very important. Every asset manager goes through cycles, and 250 00:13:19,720 --> 00:13:22,200 Speaker 2: your investment philosophy is going to go through cycles. So 251 00:13:22,800 --> 00:13:25,080 Speaker 2: as an investor, you need to be patient and understand 252 00:13:25,120 --> 00:13:28,480 Speaker 2: the cycles, the positive and negative that your asset manager 253 00:13:28,520 --> 00:13:29,680 Speaker 2: is going to come through and you have to be 254 00:13:29,720 --> 00:13:32,520 Speaker 2: patient too to live through. That is very important. Just 255 00:13:32,520 --> 00:13:35,360 Speaker 2: to word to add to what what Vincent said, you. 256 00:13:35,320 --> 00:13:38,360 Speaker 1: Have investments school on the Money Show. Vincent Anthony Ranch 257 00:13:38,440 --> 00:13:41,240 Speaker 1: is the CEO of Differential Capital. Karl Ruthman is the 258 00:13:41,240 --> 00:13:44,040 Speaker 1: CEO of Sanlam Investments. 259 00:13:44,120 --> 00:13:46,840 Speaker 2: The Money Show, Investment School. 260 00:13:47,160 --> 00:13:50,640 Speaker 1: Investment School Tonight, Should you stay invested? How often should 261 00:13:50,640 --> 00:13:53,400 Speaker 1: you chop and change? Vincent? Anthony Ranch is the SEO 262 00:13:53,480 --> 00:13:59,240 Speaker 1: of Differential Capital, Karl Oruthmann, there's the CEO of Sunlam Investments, Vincent. 263 00:13:59,280 --> 00:14:03,040 Speaker 1: When you look at this kind of thing, so time 264 00:14:03,080 --> 00:14:05,760 Speaker 1: in the market obviously matters. People will try and time 265 00:14:05,880 --> 00:14:08,320 Speaker 1: the market as well. There are the other ways you 266 00:14:08,320 --> 00:14:10,120 Speaker 1: can do it. I mean, you can keep ten percent 267 00:14:10,160 --> 00:14:12,680 Speaker 1: of your capital to sort of play with, and you 268 00:14:12,720 --> 00:14:15,640 Speaker 1: can keep the rest invested over the longer term. And 269 00:14:15,679 --> 00:14:18,080 Speaker 1: that in a kind of era in which everything has 270 00:14:18,120 --> 00:14:21,560 Speaker 1: become gamified, whether that's good or bad, I'm still not 271 00:14:21,720 --> 00:14:26,080 Speaker 1: convinced that might be a sort of relatively rational option. 272 00:14:27,760 --> 00:14:32,600 Speaker 3: I don't think that's totally irrational, Steven. But again, you know, 273 00:14:32,680 --> 00:14:35,200 Speaker 3: I think just to jump on something that Carl said, 274 00:14:36,080 --> 00:14:38,480 Speaker 3: your investment philosophy. You know, even if you're going to 275 00:14:38,520 --> 00:14:41,560 Speaker 3: take a part of your portfolio to take a few 276 00:14:41,640 --> 00:14:44,400 Speaker 3: risky punts as we'd call it, you still have to 277 00:14:44,440 --> 00:14:49,040 Speaker 3: have some kind of thinking and strategy behind it, and 278 00:14:49,280 --> 00:14:51,560 Speaker 3: I think that's important otherwise you'll end up wasting that 279 00:14:51,600 --> 00:14:54,800 Speaker 3: ten percent as well. So what I find is if 280 00:14:54,840 --> 00:14:58,400 Speaker 3: you group your portfolio into different risk buckets and say 281 00:14:58,440 --> 00:15:00,720 Speaker 3: you've got a proportion that I'm going to put into 282 00:15:01,080 --> 00:15:04,400 Speaker 3: a sort of compounding interest bearing type investments that I'm 283 00:15:04,400 --> 00:15:06,440 Speaker 3: going to leave alone. Others I'm going to, you know, 284 00:15:06,480 --> 00:15:08,360 Speaker 3: give to an asset manager to manage for me, and 285 00:15:08,360 --> 00:15:10,480 Speaker 3: then I'm going to have a portion for myself where 286 00:15:11,160 --> 00:15:13,840 Speaker 3: I've got some kind of advantage. I come from an 287 00:15:13,880 --> 00:15:17,320 Speaker 3: industry that I particularly understand. I'm going to invest in 288 00:15:17,320 --> 00:15:19,720 Speaker 3: these type of stocks because I've or these type of 289 00:15:19,800 --> 00:15:22,840 Speaker 3: investments because I understand them. I don't think there's anything 290 00:15:22,840 --> 00:15:26,440 Speaker 3: wrong with that. But then you've got to understand what 291 00:15:26,520 --> 00:15:29,720 Speaker 3: you think your edge is and then you know invest 292 00:15:29,760 --> 00:15:32,040 Speaker 3: in that way. I think there's nothing wrong with that approach. 293 00:15:34,360 --> 00:15:36,200 Speaker 1: Cale, I mean, Cole. One of the things that's really 294 00:15:36,240 --> 00:15:40,000 Speaker 1: interesting is that people will often say investing in the 295 00:15:40,040 --> 00:15:42,920 Speaker 1: stock exchange is a bit like gambling, but long term 296 00:15:42,920 --> 00:15:45,480 Speaker 1: investing is not gambling at all, because, I mean, from 297 00:15:45,480 --> 00:15:48,240 Speaker 1: the numbers view point to it can actually be quite 298 00:15:48,280 --> 00:15:51,880 Speaker 1: certain if you invest over the correct amount of time. 299 00:15:54,080 --> 00:15:58,360 Speaker 2: Yeah, definitely, Steven. So, I mean, obviously asset allocation is important, 300 00:15:58,400 --> 00:16:01,600 Speaker 2: so you know, you have different assets and investing the 301 00:16:01,680 --> 00:16:06,240 Speaker 2: JAC is pretty much let's call it equity, equity, dominance 302 00:16:06,320 --> 00:16:08,840 Speaker 2: and equity shot over time. If you go through over 303 00:16:08,840 --> 00:16:11,440 Speaker 2: the last less it twenty thirty years and you do 304 00:16:11,480 --> 00:16:15,920 Speaker 2: all your different models, then you know, equity over time 305 00:16:16,200 --> 00:16:19,920 Speaker 2: usually outperforms cash or money in the bank, and that's 306 00:16:19,960 --> 00:16:21,680 Speaker 2: what you get on the JC with US in South 307 00:16:21,720 --> 00:16:24,600 Speaker 2: Africa with this offshore. So if you do invest in 308 00:16:25,440 --> 00:16:28,440 Speaker 2: the JAC, you should over time get probably inflation plus 309 00:16:28,480 --> 00:16:30,600 Speaker 2: three four five percent, depending on what your model is, 310 00:16:30,640 --> 00:16:33,120 Speaker 2: depending on what sectors you invest in. And if you 311 00:16:33,160 --> 00:16:36,760 Speaker 2: can continue to outperform inflation and you do it on 312 00:16:36,880 --> 00:16:40,520 Speaker 2: continuous basis, then over twenty thirty years, the compounding effectors 313 00:16:40,600 --> 00:16:43,120 Speaker 2: is immense. I know, we've seen many of our clients 314 00:16:43,120 --> 00:16:46,320 Speaker 2: in our example, some lon private wealth equity portfolios, who 315 00:16:46,320 --> 00:16:49,240 Speaker 2: would you give us four or five million round to 316 00:16:49,320 --> 00:16:51,480 Speaker 2: invest and you know twenty years later it's you know, 317 00:16:51,520 --> 00:16:53,840 Speaker 2: it's worth multiples of that. You know, it's worth twenty 318 00:16:53,880 --> 00:16:55,840 Speaker 2: two to twenty three million round, depending on But it's 319 00:16:55,880 --> 00:16:58,160 Speaker 2: all about staying in the market. All our clients who 320 00:16:58,160 --> 00:17:01,680 Speaker 2: really do well stay in the market. They don't really 321 00:17:01,760 --> 00:17:04,680 Speaker 2: exit the market, you know, they don't They don't try 322 00:17:04,680 --> 00:17:06,760 Speaker 2: and time the market. If you just stay in the market, 323 00:17:06,800 --> 00:17:09,200 Speaker 2: you get the best returns. And an equity over time 324 00:17:09,640 --> 00:17:12,119 Speaker 2: does give you the best returns given that if everything 325 00:17:12,200 --> 00:17:14,040 Speaker 2: stays equal vincent. 326 00:17:14,040 --> 00:17:15,959 Speaker 1: This reminds me this is something you need to do 327 00:17:16,080 --> 00:17:20,240 Speaker 1: quite early in life. Earlier the better, I agree. 328 00:17:20,240 --> 00:17:23,800 Speaker 3: The earlier the better for sure. Again back to the 329 00:17:23,840 --> 00:17:27,840 Speaker 3: point around if your time horizon is long enough, you 330 00:17:27,880 --> 00:17:30,160 Speaker 3: know you know, I would say, if you've you've got 331 00:17:30,160 --> 00:17:33,639 Speaker 3: a forty year work or career ahead of you, the 332 00:17:33,680 --> 00:17:37,840 Speaker 3: earlier you start you know, I think you've got materially 333 00:17:37,880 --> 00:17:40,520 Speaker 3: better chances of getting through a couple of cycles where 334 00:17:40,560 --> 00:17:43,679 Speaker 3: you can make, you know, extraordinary returns over cash. And 335 00:17:43,720 --> 00:17:47,800 Speaker 3: I think that's the key is to start early enough. 336 00:17:47,840 --> 00:17:50,760 Speaker 3: And then also if you have made mistakes, you also 337 00:17:50,800 --> 00:17:53,920 Speaker 3: have time to correct it. And by mistakes also mean 338 00:17:54,320 --> 00:17:56,000 Speaker 3: you know not just the decisions that you've made in 339 00:17:56,080 --> 00:17:58,639 Speaker 3: terms of your choice of investments, but also the amount 340 00:17:58,640 --> 00:18:01,640 Speaker 3: that you've been trying to save. You know, you might 341 00:18:01,720 --> 00:18:05,240 Speaker 3: get a better understanding of your your and retirement needs 342 00:18:05,280 --> 00:18:08,159 Speaker 3: as your life evolves, and then you can try and 343 00:18:08,160 --> 00:18:10,680 Speaker 3: make adjustments to your saving patterns early enough. And I 344 00:18:10,720 --> 00:18:13,400 Speaker 3: think this important to bear bear in mind that what 345 00:18:13,440 --> 00:18:15,119 Speaker 3: you end up with is not just a function of 346 00:18:15,160 --> 00:18:18,800 Speaker 3: the market. It's also how much decisions and how much 347 00:18:18,840 --> 00:18:22,280 Speaker 3: you forego today. That's an important part to bear in mind. 348 00:18:22,840 --> 00:18:25,480 Speaker 1: Vincent Anthony Raja, thank you so much. Really appreciate you 349 00:18:25,560 --> 00:18:29,600 Speaker 1: coming in the CEO of Differential Capital. Carl Ruthmann, thank you, 350 00:18:29,760 --> 00:18:34,840 Speaker 1: CEO at Sunlam Investments on Investment School tonight. It started 351 00:18:35,160 --> 00:18:38,919 Speaker 1: in eighteen ninety when their founder Otto Pollock became one 352 00:18:38,960 --> 00:18:41,840 Speaker 1: of the first members of the Johannesburg Stock Exchange. He 353 00:18:41,880 --> 00:18:45,880 Speaker 1: built a business grounded in trust in a world of chaos. 354 00:18:45,920 --> 00:18:50,320 Speaker 1: Over time, through several name changes, they became Sassin Securities. 355 00:18:50,680 --> 00:18:55,480 Speaker 1: Today they returned to their roots as Otto eighteen ninety, independent, 356 00:18:55,960 --> 00:18:59,080 Speaker 1: clear about who they are and what they do. They 357 00:18:59,240 --> 00:19:04,639 Speaker 1: are investments specialists and at Otto eighteen ninety investing is personal.