Nothing is free
Francois le Clus • March 5, 2025
There will always be a price to pay when you want something. With most things in life, you will pay a monetary fee for the things you want or need. If you want returns from your investments, you will need to pay a psychological fee. You will need patience, perseverance, grit and determination to enjoy the fruits of your investments.
The S&P500 delivered returns of 678% since 1996. When you look back at it you may think it was easy to make the returns, all you had to do was hold on to your investment. If you invested early 2000, you would’ve had to wait more than 13 years for your capital to return to it’s initial level. My patience has never been tested for 13 years, but I tip my cap to whoever held onto their investment for this long. The good news is that this person would’ve enjoyed an average return of over 20% each year.
If you invested just before covid hit in 2020, you would now have enjoyed returns of over 70%. The big kicker is that your fund would have lost more than 30% of it’s value in 4 months. You needed to stay extremely calm during this time because everyone thought that the world was going to end.
Keeping it short and sweet, you need to understand that everything in life has a fee. It may be monetary or psychological, but courage, patience and perseverance always have a way of paying off over the long run.
Die woord “aftrede” is ‘n skrikwekkende woord wat jou maag laat rondtol. Wat bekommewekkend is die woordjie “stagnasie” – ‘n vrees wat met aftrede geassosieer kan word. Selfontwikkeling is nie ‘n luukse wat slegs vir sekere fases van ons lewenreis gereserveer is nie; dit is ‘n noodsaaklike en lewenslange proses wat die kwaliteit van ons menslike bestaan bepaal. In ‘n wêreld wat voortdurend verander – tegnologies, sosiaal en ekonomies – kan stilstand maklik tot agteruitgang lei. Miskien is selfontwikkeling juis te meer belangrik vir afgetredenes – dit is ‘n proses waardeer alledaagse betrokkenheid en sinvolle gesprek die waarde van jou menslike bestaan inderdaad bevestig, ondersteun en instand hou. Selfontwikkeling dra by tot persoonlike groei en selfkennis. Deur nuwe vaardighede aan te leer, kursusse te volg of bloot oor eie ervarings te reflekteer, leer jy jouself beter ken. Hierdie selfkennis help met beter besluitneming. Iemand wat byvoorbeeld besef dat hy/sy swak is in tydsbestuur, kan doelbewus strategieë ontwikkel om dit te verbeter. Vir jonger mense kan selfontwikkeling help in hulle beroepsloopbane. Deesdae met die spronge in tegnologie, is aanpasbaarheid vir nuwe uitdagings ‘n groot vereiste. Vaardighede wat vandag relevant is, kan môre verouderd wees. Deur voortdurend te leer en aan te pas, bly ‘n persoon mededingend en waardevol, spesifiek ook in jou werksomgewing. Die kern van selfontwikkeling lê in ingesteldheid. ‘n Mens moet nooit glo dat jy “klaar” is nie. Selfs op ‘n hoë ouderdom kan jy nuwe vaardighede aanleer, nuwe perspektiewe ontdek en nuwe verhoudinge bou. Hierdie ingesteldheid verhoed byvoorbeeld dat aftrede ‘n eindpunt word; dit maak dit eerder ‘n nuwe begin. Wanneer ‘n mens stagneer, verloor jy nie net jou kreatiewe energie nie, maar ook jou vermoë om sin en betekenis in jou daaglikse bestaan te vind. Elke daad van groei is ‘n daad van vernuwing, en hou die gees jonk. Om te stagneer is om jou menswees te verwaarloos; om te groei is om jou menswees te eer. Selfontwikkeling hou die vlam van betekenis aan die brand, en dit is die vlam wat die mens se lewensreis tot die einde toe verlig. Geksryf deur Koos van die Waterberge vir Bovest
In a quiet corner of a garden, a tiny egg rested beneath a leaf, unnoticed by the world. In time, it hatched into a caterpillar—small, vulnerable, and endlessly hungry. Day after day, it consumed everything in its path, growing rapidly but remaining earthbound, exposed to every passing threat. Then, without warning, it stopped. It found a still place, attached itself to a branch, and formed a chrysalis. From the outside, it looked lifeless—fragile, even pointless. To an observer, it might have seemed like the end of its journey. But inside, everything was changing. The caterpillar was breaking down completely, dissolving into something unrecognizable before slowly rebuilding itself into something entirely new. Time passed. When the chrysalis finally opened, the creature that emerged was no longer confined to the ground. Its wings were soft at first, uncertain. It struggled, pushing fluid through them, strengthening them with effort. Only after this resistance could it take flight. And when it did, it soared—no longer bound by the limitations of its former life but shaped by every stage that came before. It’s been six years since humanity’s last global threat, the Covid pandemic. A lot has changed, but we as people have not. Just as the butterfly in the story above goes through its cycle the global economy does too. But the butterfly does not know its going through this cycle, its merely following its path. We are very aware of the cycle as it has an effect on our every day lives especially on our finances. But just as the butterfly follows its path, we do too. Focus on what you can control. We often stress the issues out of our own control and isn’t exclusive to finances. Not a single person reading this article has any control of the global economy and the current conflict in the Middle East. None of us also knew exactly when it would happen and when it is going to end. Don’t get me wrong, I too struggle to manage my thoughts and emotions when we go through the tough parts. Shifting the focus towards finances; except for being in control of how you earn an income, the only other factor you can control is your spending. Stick to your budget! Never stop investing! Stay disciplined! Crisis Asset Allocation I get many questions on what we are doing to manage risk and potential losses. This is where financial planning becomes extremely important. Every single investment in your portfolio is linked to a need or a goal, not just any goal but a time-based goal. This specific time horizon has influenced the type of assets bought in order to reach these goals. The longer away the goal, the more risk is taken and vice versa. Investments where liquidity is needed will be affected much less than a long-term share portfolio. More liquidity, less risk. Meaning that if you need cashflow you should not be worried as the asset exposure will be less affected. Retirement products will have exposure to many different assets where there are conservative assets to provide protection in the short-term. The growth asset exposure that may be volatile now is the part that gives you the long-term inflation beating returns. During this part of the cycle certain assets have become less desirable and opportunities have popped up elsewhere. All portfolios are monitored to make sure that the original mandate is followed, and the investment goal is reached at the end of the applicable term. All asset managers have started to make asset allocation changes to match the changing of the cycle and the Bovest investment committee has also done so. Is it time to sell and move to cash? In short, no. We don’t know when markets will turn and no one else either. Historically in these crises it takes on average around two weeks to reach the bottom of the market and then more than a month to recover. This does create many buying opportunities for asset managers but also for you as investor. Warren Buffet always says, "Be fearful when others are greedy and greedy when others are fearful" . This is the time to buy assets on “sale”, don’t sell them. Getting out of the market is the biggest risk, this is where investors lose money. Stick to the plan and stay patient, you will be rewarded. Ruvan J Grobler RFP™ (PGDip Financial Planning)
