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 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.
Ripe Umsobo berries
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
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.
Royal purple Umsobo jam, as delicious as it looks
When it comes to being an investor, especially if you prefer to DIY, there is a fine line between being smart and being an idiot. If you stuff up ...
Checklist for your Will
Every day I come across clients who either don’t have a will, have a will that is so out of date the ex-spouse will inherit everything, or ...
Aren't estate plans for the elite?
Doing even the simplest estate plan seems too much of a morbid undertaking for many of my clients - so can it make any difference ...
So you thought you read the small print...
Just when you thought it was safe to sign a form without reading the reams and reams of fine print… along comes some ...
Keep it simple but not stupid
For the average person, investment can be confusing and stressful, usually resulting in a number of unhelpful scenarios – from a multitude of investments all ...
Don't just stand there - Do something
When it comes to personal finances there are times to take action, and plenty of other times just to let it be. This applies ...
When you leave a job for a new, better one, most of your focus is usually on the new venture and you can’t wait to get out of the existing ...
The Passive revolution
All over the world investment fees have fallen substantially, not just as a result of lost trust in investment bankers’ post 2008, but with the massive increase in ...
Thriving not just surviving a slower economy
We’d all love the good times to last forever, or at least a good few years. The reality in good old SA Inc is ...
Taking emotion out of investment decisions
Timing of the markets is like trying to catch a falling knife, you are very likely to catch the blade and do yourself a nasty ...
Smart Investor or Clever Dick?
Will your Will stand the test of time?
Estate Plan – I’ll be dead anyway!
Uncovered! So you thought you read the small
Just one page – Consolidated Wealth
Investments and Risk – When should you review?
Group Benefits – Before you kick them to
Catching a Falling Knife – Timing the markets