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THE RAINBOW PROMISE, WHEN THINGS SEEM “PEAR-SHAPED”

by | May 1, 2022

You may not speak about the past much, but for many of us in the industry, we still have a fresh memory of the most recent and latest promise of a “pot-o-gold”. Especially when the world seems in chaos with much uncertainty. The likes of MTI and its promised returns attracted many an astute investor and man/woman on the street.  If you want to read the most recent update on the progress and any possible hope for “investors”, here is a link to the latest article by Moneyweb:

https://www.moneyweb.co.za/moneyweb-crypto/fsca-agrees-to-waive-r50m-admin-penalty-on-mti/

Last week a friend asked me about the latest “Rainbow investment” (This is a term I have coined for tech/social media- “get rich quick” schemes). Times are tough and markets over the past 3 months have been volatile. In case you are promised a “pot-o-gold” and need to know how to identify a “rainbow investment”:

  • They promise monthly returns above that of the average returns for long- term investments in a well-diversified portfolio (i.e.: like the RWM Model portfolio’s)
  • They encourage you to bring along some friends and family
  • It always starts small and seems to motivate quick access to larger sums
  • And the word “guarantee” features almost always

So, what do we do when markets are volatile and our living expenses are on the increase?

  1. If you do not have one, draw up a budget (your Wealth Manager can assist with this). If you have one, review it. Review all major budgetary items, but do not overlook the little items, it all adds up.
  2. Regarding the possible recent reduction in your portfolio value, do not panic, and just sit tight. Quinton Ralph “Markets don’t go up in a straight line and it is normal for investments to pull back from time to time. We do not try and time markets, as that strategy does not work”. Sit Tight!
  3. If “rainbow investing” excites you” Start building your own “pyramid scheme” or rather a personal savings plan. Yes, I said it, that name attracts so many “investors” that perhaps the way to get you to look after yourself is a personal “pyramid scheme”. The principle is to invest and save when you can for when you cannot. Build some principle into your life so that you do not get unstuck in market-downturn periods, there have been many and there will be more.

A TYPICAL GENERAL PERSONAL SAVING OVERVIEW:

*Contact your Personal Wealth Manager to update your planning or for the creation of a personalised financial plan.