Want to adopt an aggressive approach to investing in a passive investment strategy? Listen to ETF's Nerina_Visser as she shares her strategy tips on the Be A BetterInvestor with Ryk_van_Niekerk. Download this insightful conversation below.
RYK VAN NIEKERK: Welcome to this week’s edition of the Be a Better Investor podcast. My name is Ryk van Niekerk, and in this podcast series I speak to leading investors and business leaders about their investments, and we also peek into their personal investment portfolios and philosophies. We try to get a sense of how they analyse investment opportunities, what shares and assets they invest in, and whether they have more hits than misses.
NERINA VISSER: [Chuckling] Thank you, Ryk. Thank you for that introduction. As for my background, I grew up in what is now known as Centurion. It was Verwoerdburg at the time. My parents moved into the house I think 10 days before I was born. So for 36 years that was my parental home in Centurion. I went to school in Pretoria, and so was very much born and bred in what is now Gauteng.
In fact, I was the ripe age of 30 before I got my first introduction to the world of finance and investments. It was a new world that opened up for me. It was love at first sight, and it was only after I started working in the industry that I embarked on, first, my MBA qualification, where I did quite a lot of finance investment, and then ultimately my CFA qualification – the chartered financial analyst.
I’m the youngest of six children and when I reached the teenage stage, my mom started working half-day and I remember at the time she worked for a state institution. There was an opportunity at the time for employees of state institutions to buy-back their pension back to the age of 16.
But no, never conversations around money. It was fairly traditional in the sense that my dad managed all the finances, partly because he was very mathematically inclined. I certainly got my love for numbers from my dad. My mom was a ‘word’ person. So yes, my dad managed all the finances, and it was never really a topic for conversation.
And so here I was, all of 22 years old, with not a dependant in sight, no debt, and yet the most important thing that was sold to me was life insurance. RYK VAN NIEKERK: Those policies were designed to earn commissions for the financial advisors and for the insurance companies. At least that has changed significantly in recent times, so it’s a lot more transparent.
Even then I knew theoretically and practically what an ETF was. Remember, in 2007 we already had ETFs. Satrix 40 had been listed for seven years by then, we had NewGold, and we had a couple of other Satrix products. We had those old Db X-trackers, the global ETFs already. They, of course, are now with Sygnia.
But the second one came in terms of the transparency and the consistency that you get from following an index; that when it comes to planning my investments, the transparency and the consistency of exactly what I’m invested in gives me infinitely more insight and control over my very active choice as to which of these exchange-traded products I would use, either in my own investment portfolios, or nowadays in my client investment portfolios as well.
Now this industry has evolved so significantly from that time, where not only do the format and the makeup of these indices nowadays cover a vast range of investment strategies and exposures and geographical exposures – a very, very broad range of investment strategies. And exchange-traded products, when their underlying investments give you exposure to things like bonds or property companies or, very importantly in our case, global investments, the JSE now effectively becomes what I call ‘my shop’, the place where I go to buy my investment products.
So I already have a living annuity as well. It’s in my tax-free investments invested in exchange-traded products. I’m not talking about long-term assets, maybe such as a house, property, or even a car, where to some extent one might need to do some financing – although even there please, please, please don’t get involved in balloon payments. They are the worst thing ever, maybe, other than life insurance for a 22-year-old with no dependants.
With that I mean expenses that you would have beyond your normal month-to-month living expenses. Those might be things like the deposit on a house or even being able to buy a car for cash, for example. Or maybe it is partly the school fees that you want to pay, or [for] travel that you want to do, or buying furniture – or whatever the case might be.
From that perspective I’m not going to chop down the tree; it’s no good planting a fruit tree, then chopping it down and using it for firewood. I want that tree to bear fruit so that I can enjoy the fruit into perpetuity. NERINA VISSER: We’ve parked that. I think probably my worst investment ever was when I was working as a quantitative analyst in the industry already, and I got caught by or listened to one of our analysts who sold us all on the idea of a particular company at the time. There’s no need to go into which company.NERINA VISSER: Oh, no, we are going back to the 1990s. I think the important lesson that I learned there is that I actually did not understand that investment at all.
RYK VAN NIEKERK: There are many scars from the late 90s. And your best one ever? Which one are you most proud of? So I ignore the, the gyrations, the up and the down of markets, and just say I’m consistently sticking to my strategy. And that’s what’s allowed me to build wealth over my lifetime.
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