One option is never the wisest

Posted in Blog
14/05/2018 Mduduzi Luthuli

Nature is beautiful to observe – and we can learn so much from watching it prevail under all conditions. Even if you think about your ‘tamed’ garden; if a patch of grass dies or is removed, the rest of the lawn will soon cover it (provided it gets good sun and water!). The grass grows back because it is surrounded by patches that are doing well. If you only have one little patch of grass, and it dies – it will take immense effort to grow new grass from scratch again.

The same is true for your long-term savings; your retirement spending money! If you only have one investment opportunity and it doesn’t perform the way you’d hoped (or worse – it loses you money), then it is extremely difficult (sometimes impossible) to build it back to the sum it was.

Remember the squirrel from last week’s blog? Here too is another example of how nature sees the wisdom in having many options for survival. The more food caches the squirrel can build up, the better her chances of making it to spring. At Luthuli Capital, we have become retirement investment specialists because we understand the nature of robust investment strategies.

We don’t see investing as a single opportunity, but rather as a strategy of viable opportunities that have been assessed and examined to show the promise of good returns over the long term.

Inside this strategy, just like the patches of grass where the soil may be less fertile and so grass will grow slower there, some opportunities may prove more stubborn than others. Or a squirrel’s cache that gets flooded out by a surprise rainfall, some investments may get washed away by unforeseen risks.

A robust investment strategy looks at several options, never just one, in order to ensure that the overall outcome is one that creates and builds wealth. Don’t rely on one ‘winning option’ when you’re betting on your future bank balance; choose an investment partner who understands the strength and wisdom of diversity and has enough experience and skill to make it happen.