Investment lessons for the new year | Fin24

Investment lessons for the new year

Jan 11 2016 12:53
Simon Brown
trading (iStock)

So the holidays are over and the party hats have all been put away. I thought I’d kick off the year with a column about the lessons learnt in 2015.

One is always learning and while some lessons in 2015 were new, others were reminders of lessons long since learnt.  

To me, the top lesson is one of the oldest. It’s something my 90-year-old grandfather was drumming into my head way back in the 80s: When it is time to panic, panic quick.

With MTN I got out the day the news of the Nigerian fine broke, exiting at around R173.

This is not about where the MTN share price will be in future, but rather about not wanting to own a company that thinks it can ignore its regulator.

The second time I panicked was over those five days in December 2015 when we had three different finance ministers. After doing nothing on day one, I started selling and shifting into foreign currencies via a US-dollar bank account as well as stocks earning all revenue in foreign currency.

I had been gently shifting this way before the finance minister debacle, but it caused met to focus and, in a way, forced me to take a day to accomplish what would otherwise have taken me an age to. This move was more about investment profits for the long term rather than the short term.

Over the next months or year or so I may be proven wrong, but tough times are hurting the local economy and it’s not getting better anytime soon.  

Befriend the trend

Another 2015 lesson is about trends: They persist for a lot longer than anybody expects.

I have written about this many times in recent years but we’re witnessing what will be talked about for decades to come: The great commodity meltdown. Many had predicted that 2015 would see the turnaround in commodities, but they just kept plummeting.  

Trends are powerful forces – it takes a lot to stop them and turn them around.

This is an excerpt from an article that originally appeared in the 14 January 2016 edition of finweek. For more buy and download the magazine here.


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