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Patience Brings Rewards

Creating an extraordinary wine blend is a delicate dance between science and art. When done with the right mindset, philosophy and depth of expertise, blending can result in an exceptional wine. The same is true in the world of wealth management, MARANA BRAND discovers.

CRAFTING AN IMPRESSIVE investment portfolio is akin to creating a timeless wine. “Both demand patience, commitment, confidence in the process, and an understanding that optimal results unfold over time,” reckons Jean Minnaar, managing director of Private Clients by Old Mutual Wealth.

“What I’ve learnt from my journey of crafting my own red wine is that it demands far more time and expertise than I initially thought. There are so many pitfalls along the

way that can spoil the entire batch. You have to pay meticulous daily attention to a myriad of factors. Even with so much dedicated effort, a great outcome is not guaranteed – and it’s a costly exercise. It dawned on me that this intricate affair is best left to the experts!” says Jean.

The same holds true when managing an investment portfolio.

While many believe they can navigate this path on their own, even having the knowledge to do so may not suffice.

Like winemakers, investors want to see excellent investment outcomes, but they often overlook the importance of a solid process and the attention to detail required to achieve those returns.

“I had to admit to myself that I don’t have the time to craft and oversee a high‐quality wine. I don’t really have the requisite skills, expertise and depth of experience to anticipate and swiftly respond to new scenarios and challenges. I believe the same holds true for investors.”

Jean Minnaar, MD of Private Clients by Old Mutual Wealth.

THE ALCHEMY OF WEALTH

Similar to the art of creating a great wine blend, constructing an outstanding investment portfolio involves carefully selecting components with the expertise of various specialists. These experts have to work together seamlessly, aligning with a shared goal. Just as the failure of one can lead to overall failure, their harmonious interaction creates a balanced outcome, poised to mature at the right moment, delivering a unique and desired result, according to Jean.

Crafting the optimal investment portfolio follows the same principles.

“It’s not only about investing the client’s money, it’s more about wealth curatorship. Individual investment portfolios cannot be isolated from the needs of an individual’s family, life events and personal goals and aspirations. You need someone who can take a holistic view of your wealth and understand and manage all these elements so they can coexist and blend well, if you wish,” he says.

“True alchemy lies in the formula,” says Jean. A winemaker, like a portfolio manager, considers your present needs and future ambitions and is agile enough to respond to your unique needs. This means building a relationship with clients and keeping track of how their life changes, adapting their investment portfolios and guiding decisions for the individual, their business and their family. A portfolio manager should be part custodian and part guide, ensuring that each aspect of a client’s portfolio builds upon the former. “Sometimes that involves adding some extra elements, or pruning away some others,” continues Jean.

“A good portfolio manager can step back and see which high‐quality businesses will be the best blend for an investor. These businesses must withstand disruptions in various segments, yielding consistent results over time,” he says. Like the winemaker, a portfolio manager can strategically overweight certain components for maximum value extraction, yet should possess the flexibility to balance out unexpected challenges with other elements.

AGEING WITH GRACE

Much like a well‐aged wine, strategic investments mature beautifully over the years. “Allowing investments to mature gracefully will result in a vintage portfolio of enduring value,” Jean explains.

“Investors are advised not to let short‐term fluctuations influence their behaviour, potentially compromising how the portfolio was composed for the long haul. Despite inevitable volatility and unexpected events in the short term, the selected companies in the portfolio, when blended for consistent performance, will yield quality returns over the long term.”

Opening a treasured bottle of wine that you selected carefully, cellared well and shielded from temptation over the years is one of life’s great pleasures. “Like with wine, one should resist the urge to uncork one’s investment too soon. Exceptional results happen only after years of carefully and patiently tending to it,” he adds.

“I’ve realised that, much like finding a fine wine for endless joy, trusting experts to blend it for me is crucial. The same goes for the cellar of finance where, as in winemaking, the finest results emerge over time and the returns will be nothing short of exceptional!”

CONTACT

Contact Private Clients by Old Mutual Wealth at +27 (0)21 524 4678 or privateclients@omwealth.co.za or visit wealthprivateclients.co.za.