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It's My Money with Sonia du Plessis · Strictly Business

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  You're listening to Strictly Business Podcast with Lindsay Williams.
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  This edition of It's My Money is brought to you by Brenthurst Wealth, your partner
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  for global wealth creation.
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  Welcome to It's My Money.
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  It's My Money is brought to you by Brenthurst Wealth, South Africa's
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  multi-award winning boutique wealth manager.
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  This week I'm speaking to Sonia Duplessis from Brenthurst Wealth.
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  And we're going to talk about the biggest investment mistake that can be made and is
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  constantly made by
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  investors.
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  Just tell us what it is first, and then I'll give you an example as well, please,
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  Sonia.
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  But over to you.
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  What is the biggest mistake that we always make?
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  Hello, Lindsay, and hello to your listeners.
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  Thank you.
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  We've talked a lot about this subject on your podcast before,
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  but I think it's definitely worthwhile repeating because to me it seems like
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  investors
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  keep on stepping into this trap, and it is definitely worth reminding investors.
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  not to fall into this trap.
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  But at the end of the day,
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  the most expensive investment mistake you can make is not having money invested into
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  equity markets,
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  regardless of what the markets are doing.
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  One shouldn't be scared and one shouldn't be hesitant to invest your money in growth
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  assets.
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  Quite right.
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  So being out of the market can be very, very costly.
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  Now, I used to speak to a woman called Di Turpin.
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  She used to be, 20 years ago I think it was now, the head of the Unit Trust
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  Association of South Africa, which is something else now,
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  but anyway, it was a collective investment organisation that looked after the
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  regulatory side of things.
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  And she would say, Lindsay, it doesn't matter whether it's a bull market of great
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  fundamental consequence
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  and people see the market going up.
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  Most people will put their money in the money market or fixed income, for example.
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  And the statistics were quite staggering.
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  As the money went into so-called safe investments, the stock market was going up
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  at the same time.
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  And money would be coming out of the equity market, which seems rather peculiar
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  to me.
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  Yeah, look, I mean, Lindsay, if you look at, you know, exactly, if you look at the
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  statistics for last year, 2025, you know,
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  massive amounts again went into money market.
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  and into cash and bond portfolios,
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  which is the lowest risk that you can take with your investments.
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  And if you just look at the amounts, 56.4 billion went into money market.
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  This is now only for South African investors.
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  56.4 billion went into money market.
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  Another 52 billion went into income funds, which is cash and bond.
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  And then 16.5 billion was pulled.
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  out of our South African equity markets.
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  So, you know, these are large,
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  large amounts saying and telling a story that clients or investors were very,
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  very nervous of markets last year.
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  And they had good reason to be so.
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  You know, things politically was very unstable.
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  You know, I think we've got three wars going on now at the moment.
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  So investors are very scared.
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  very hesitant but the fact of the matter is regardless of what's happening in
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  social politically
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  it's still it definitely is still worthwhile keeping your money invested
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  into markets and now if you if you
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  pull that you know if you go full circle going back to 2025 and i know hindsight is
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  always 2020
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  perfect vision but if you look at what markets actually did in 2025 You know,
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  the S&P delivered 17% in dollars.
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  The NASDAQ, 21% in dollars.
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  Emerging markets, 33% in dollars.
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  Our own South African JSE did 42% in rands last year.
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  So people or clients that pulled their money out of these equity markets
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  and moved it to safe havens missed out on all of this growth.
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  And, yeah, you know,
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  just imagine if these clients kept their money in the markets.
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  It's tempting, though.
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  It's human nature, isn't it?
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  You understand.
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  You hear the headlines, war in Iran, and all those years ago when Russia invaded
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  Ukraine.
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  You think, goodness me, I better get out and let the dust settle.
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  The market's going to come off, and then I'll get back in again.
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  Wrong.
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  You don't get back in again.
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  I'll give you another example of that in a moment.
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  because I spoke to a fund manager this week, a very, very well-known fund manager
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  with 50 years experience in the market.
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  And he said to me, Lindsay, for the first time, I got my team together and I said,
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  if you want to take some money off the table,
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  and this is mainly S&P 500 and NASDAQ.
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  If you want to take some money off the table, it's entirely justified.
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  Bond yields are rising in the United States.
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  Inflation is rising and projected to rise even further.
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  interest rates going up, and that's usually bad for the stock market, etc.
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  So you can go ahead and do it if you want to.
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  And at the end of the conversation, I said, did you do it as well?
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  Did you did you take your own advice?
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  He says, no, not a chance.
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  Until the market tells me until the market starts to turn down.
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  I don't mind if I miss the first three or 4%.
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  Because I've been in for years.
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  If I lose the first three or 4% to the downside, it doesn't matter.
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  I'm staying in.
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  But people don't do that.
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  Imagine if you'd sold you Just over a year ago,
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  when Trump made his famous or infamous Liberation Day tariff speech, if he'd gone
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  out the market then,
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  you would never have had the chance to get back in, Sonia, because it was only a
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  three, four day phenomenon.
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  Yeah, yeah, exactly, Lindsay.
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  And like you said now, once you pull that plug on taking the money out of the
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  market,
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  when do you actually step back into the market again?
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  And I mean, you'll never get it right.
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  The clever people out there, if you look at the fund managers, if you look at the
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  people that's got years and years of experience behind them,
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  they just leave their money in the market and ride the waves, the ups and downs of
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  the market.
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  The other thing that I do want to mention, Lindsay, is that now if you look back at
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  what markets did last year,
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  if you just look at the S&P who did 17% in dollar terms,
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  You might have other investors now saying, but look, Sonia, I only got 8% in dollars.
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  Why didn't I get my 17%?
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  And that's also human nature.
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  We tend to compare what we got over the last year with benchmarks and with
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  indexes.
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  And that's also a trap that you shouldn't fall into because a lot of the time...
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  most of the time, especially if you look at clients of branches,
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  we won't invest a client's money fully into the S&P or into the NASDAQ.
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  It is a diversified portfolio that's got a couple of asset classes
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  where if it goes into a unit trust,
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  just a portion of that will be exposed to the S&P or to the NASDAQ.
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  So just be mindful not to...
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  or be mindful to compare apples with apples and not look at your investment.
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  If you only got 8% in dollars and the S&P did 17%, just be fair.
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  Don't go to your advisor and say, listen, why didn't I get my 17%?
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  And that's, you know, at the end of the day, Lindsay, that's why it's so important
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  to,
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  if you've got a diversified approach and if you're following in a diversified
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  investment philosophy,
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  then you don't have to move in and out the market.
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  Then you've got your fund managers doing the buying and selling and making that
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  call on behalf of you.
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  You give four reasons why equities are a good idea.
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  And these are very basic principles.
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  For example, one of them is equities usually outpace inflation.
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  And if you look at it over whether it be 10 years or 60 years, the fact is that
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  that is the truth.
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  And if you stay in the market, as you've said repeatedly, that if you stay in the
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  market, then compounding.
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  will work in your favour over the years.
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  I don't think we need to go through those four points that you make, Sonia.
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  I think what's more powerful is that 60 years of proof paragraph that you kindly
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  sent me in your article.
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  The numbers are really staggering.
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  Perhaps you want to go through the different comparisons of different asset
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  classes for us.
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  Yeah, so in a nutshell, Lindsay,
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  it basically says that there's 60 years of proof showing that equity markets...
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  or stock markets perform better over the long term compared to cash bonds and
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  property and
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  I mean it just takes a very simple hundred dollars that's been invested
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  60 years ago so that would be 1965 that hundred dollars will be worth a thousand
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  five
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  hundred.
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  So that's an average of 4.5% return.
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  Now, this is looking at actual data, so it's not pulled out of thin air.
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  If you look at government bonds,
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  that $100 will be worth $2,800 in 60 years'
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  time.
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  That's about 5, 5.5% average return.
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  And then if you look at something like gold, where you bring in a little bit
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  more...
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  little bit more risk gold after 60 years that hundred dollars would be worth twelve
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  thousand dollars and that is about seven and a half percent but now if you look at
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  that hundred
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  dollars invested into equity markets or in stocks in
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  comparison that would be worth forty three thousand dollars in 60 years time and
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  that's an
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  average of ten ten and a half percent annual return
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  So it's actual proof showing that if you just left your money in the market, 60
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  years is a very, very long time,
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  Lindsay.
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  But even if you just halve that to 30 years, it still makes sense.
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  And if you're going to have your COVID-19 in between, you're going to have your wars
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  in between,
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  and it's quite normal for markets to fluctuate.
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  The main thing is just to sit tight and not move in and out.
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  Quite right.
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  the Question that you ask also in the article, you say, who should be in
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  equities?
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  A lot of people say, well, I'm retired now.
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  I can't take the risk of being in equities.
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  It's a risky asset class.
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  And you say, well, OK, you're 60 years old or you're 65 years old, and your family
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  history suggests that,
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  and medical advancements mean that you're going to live for another 20, 25, even 30
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  years.
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  Over that period, being out of the market just because you think it's too risky is
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  exactly the wrong.
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  It's risk.
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  It's actually in some ways, Sonia.
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  it's too risky not being in the market.
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  Yeah.
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  Yeah, no, exactly, Lindsay.
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  It's a massive opportunity cost.
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  And you still do get a lot of clients saying that, you know, once I go in
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  retirement, I want to de-risk.
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  But what you have to do is, I mean, you need that growth engine in your living
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  annuity or in your retirement capital.
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  And data also shows that you at least need 55% to 60% in equities.
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  And then, you know, we can go on about the bucket approach as well.
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  You know, we usually put like one to three years money aside in money markets.
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  So that will provide your income in the short term.
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  Then we go, then we cater for the medium term and then for the long term.
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  So, you know, Lindsay, I know it sounds stupid because we've talked about this so
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  many times.
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  But investors, you know, it's definitely worth repeating because investors, they do
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  not.
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  think of it.
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  They do not think of their retirement plan as a long-term strategy as well.
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  So, yeah, and even if you boil down to the equity exposure, if you've got that 55 to
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  60% equities,
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  you also need a very healthy balance between local equities and offshore
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  equities.
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  Don't just go and put everything offshore or everything local JSC equities.
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  You need a good chunk of that if you're a South African to go into offshore
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  equities.
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  I think it's worth making the point as well that it's not one size fits all.
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  It's not the sort of cookie cutter approach, as the Americans would say.
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  Everyone has a different time horizon.
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  Everyone has different financial aspirations.
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  So you've got to go to a financial advisor and sit down and say, this is how much
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  money I've got.
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  This is how much money I need after retirement, etc.
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  And it's a tailored plan.
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  Is that good advice?
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  Yes.
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  Yeah, no, exactly, Lindsay.
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  And that's what we are.
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  trying to educate our clients with.
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  And definitely, it's worthwhile having a plan.
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  It's worthwhile reviewing that plan.
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  So important to review it on an annual basis to see if you're still on track.
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  And yeah, then, you know, if there's a plan in place, then everything is sorted.
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  Sonia, thanks so much for your time and your expertise.
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  Sonia Duplessis is head of Brenthurst Wealth in beautiful Stellenbosch.
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  And that was It's My Money.
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  It's My Money was brought to you by Brenthurst Wealth, an award-winning
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  boutique Wealth Management Company.