Invest in blue chip companies if you want to create wealth over the long term, says Steven Nathan, CEO of 10X Investments.
To create wealth on a reliable basis over time, you need to invest in great companies in SA and globally, says Nathan. Doing this successfully means diversifying your portfolio rather than speculating on the next big share and placing all your eggs in that basket.
While the risks associated with the stock market drive more conservative investors towards defensive assets, Nathan says these yield little growth in the long term. The risk with these is of not creating the kind of wealth that will sustain you in your retirement.
“The risk to me is that at age 60-65 I haven’t earned enough money, I haven’t had enough growth on my money. So the risk is that I’ve done badly, paid too much in fees or my returns are too low. That is risk to me.”
These are Nathan’s strategies for maximising on your investments in trying economic times.
• Get your objective right by reviewing your strategy. The hardest part is getting the right long-term strategy in place.
• Do not be scared off by the doomsayers. Investing in the stock market gives you over 50% international diversification and this is why the JSE has done much better than expected in the climate of low growth in SA.
Watch Nathan and Kura Chihota discuss the impact of a slow market on your investments:
• New Retirement Thinking airs on Business Day TV channel 412