Comrades goes downhill; retirement wealth doesn’t need to, says Absa

Those looking to do well with the marathon task of building wealth for retirement can learn a lot from the Comrades, according to Absa Investments, the Absa financial service group’s investment arm and a firm frequently consulted by leading pension funds.

This year it’s downhill all the way, but retirement provision doesn’t need to go the same route, says Craig Pheiffer (General Manger: Absa Asset Management Private Clients).

He should know. For years he’s been advising high net worth clients on how to build wealth over the long haul and on Sunday (May 30) he’ll be at Pietermartizburg City Hall with another 18 000 runners starting out on the 85^th Comrades Marathon.

Pheiffer says parallels between successful long-term investing and a winning Comrades strategy are instructional for any investor seeking improved performance.

In the long run there are four things to watch.

1. TV runners: They race ahead in the early stages, looking for their 15 minutes of fame and media play. In investment terms, these are the people who look for short-term gains but have no long-term strategy. They might move ahead for a time. Some even maintain a lead at the half-way stage, but the lack of long-term planning catches up with them and they fall behind the smart players with a long-term goal.

2. Spectators: These are not real contenders for long-term honours at all. They may move in and out of the field from time to time, looking for short-term advantage. But they retreat to the sidelines, miss out on some big opportunities despite their apparent tactical sense and never make the steady gains that long-term participants achieve.

3. Contenders for gold: These smart runners start the journey conservatively, keep up a steady pace for the duration of the race and finish among the medals. They plan ahead, make asset allocations appropriate to their unique circumstances and commit to quality shares and financial instruments.

4. Jarring descents: From the start you face hustle and bustle as you contend with thousands of runners (or options) and the prospect of some jarring downhill stretches. It’s tough but you have to avoid a knee-jerk reaction to such things as global recessions, financial crises, over-indebted Europeans and volatile currencies and commodities. Ignore short-term noise and continue to focus on long-term goals.

Says Pheiffer: “Those providing for retirement can take heart from the Comrades and the example set by runners who go the distance. If you’ve maintained discipline, put in the time and worked to a plan you won’t fall by the wayside. You’ll make the finish and clock up some impressive gains. The best of luck to you!”