The art of making jam and investments

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Wakkerstroom

Wakkerstroom October 2014

Umsobo Berry – from toxin to tea time

I recently had the pleasure of spending a few days in Wakkerstroom. A small Mpumalanga drinking town with a birding problem. One of my finds was Umsobo Berry Jam (Zulu name, Nastergal in Afrikaans). It’s proper name is Solanum Nigrum, but also known locally as African Nightshade – itis actually found all over the world, and is certified as a weed in 61 countries. Parts of this plant can be extremely toxic to livestock, one of the reasons perhaps it isn’t found in droves in the wild in the cattle-rich areas of Mpumalanga. The berries are at their most toxic when they are green and unripe, they then turn to yellow, red and eventually the deepest royal purple. Heating the ripe berries, at the high sugar temperatures of over 250 degrees centigrade (not just boiling water) de-natures the rest of the toxin, making a delicious jam, and only a small teaspoon will colour a bowl of ice-cream in seconds. It will also stain your hands for weeks, and thousands of the tiny berries are needed to make a pot of jam. I wonder who was brave, or foolish, enough to work out how to de-nature the toxin. How easy it with man-made toxins that threaten to give our finances a real belly-ache?

What I found fascinating when researching this berry and it’s uses, was man’s ability to turn a toxic insignificant little berry into something not just harmless but perfectly delicious. It underlines the old axiom ‘don’t judge a book by it’s cover’. First impressions are often wrong, and even if they are right – with time they can be made to be useful and productive. In financial terms this applies to nasty little toxic investments that lie in our portfolio. Those AltX shares you bought and linger for years in a short range and you keep hoping they’re going to do something. That endowment that has a 30 year maturity and loses 30 cents for every rand you put in it. Those huge fees being imposed on your mediocre investments, leaving you wishing you’d put it in a savings account, or under your mattress.
Umsobu Berry plant, unripe green berries

Umsobu Berry plant, unripe green berries and ripe black berries

Sometimes just giving it time, with a little bit of attention as you go, will sort the toxic problem out for you – as it does with the Umsobo Berry. The occasional fund switch is often all that is needed to turn that small lumpsum into a significant investment over the decades. I’m not talking about checking it 3 times a day and endlessly swapping it in and out of funds, I’m talking about the occasional switch to follow new trends – switching a bit more into property, or out of equity for example. Your list of funds on some of the older products might be very limited, but your advisor will be able to do a ‘what if’ for you and come up with some suggestions. With some of the long term endowments that still litter the financial landscape, picking your investment too soon, and ‘sucking up’ the penalties is the equivalent of eating those unripe berries. Be patient, manage the investment and pick it when it’s ripe. Sometimes it is better to ‘park and hold’ than ‘pick and harvest’. Take emotion out of the decision.

Solanum_nigrum_fruit_black

Ripe Umsobo berries

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There is often a reluctance to sell poorly performing shares or investments (that aren’t tied up in penalties, in other words, in ‘flexible’ investments – like those on a LISP platform or Stock Portfolio). There is often an unreasonable expectation that it will improve one day, and then you’ll miss out of the upside that you’ve been waiting for forever. You need to take emotion out of it. It is just money in another form. Would you buy it right now? Is there another investment that you’re pretty much certain will grow? What emotion is making you hang onto it? Greed? Expectation of a windfall? Nostalgia? Memories of better times? Loyalty? In the long trm, the better you understand your reasons for financial ‘behaviour’ the better off your wealth will be in the long term.

Small spoon of Umsobu berry jam on a scone

Small spoon of Umsobu berry jam on a scone

There is no substitute for researching and understanding the basics of investment. It will help you find the nuggets and weed out the toxins in your investments. A basic understanding of ‘asset allocation  – the mix of cash, equities etc – and the volatility over time will make it much less stressful. If you have a medium to long term investment, properly structured to take advantage of the far higher returns in the stock market, it will be very much too stressful to anxiously watch it from day to day. Just like you’d need to put a fence around your Umsobo berries so that nobody steals them or eats them too soon, so you structure your portfolio, adjust it to your risk appetite and end goals, then keep an eye on it until it’s ready.
stain

Royal purple Umsobo jam, as delicious as it looks

 
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