Blue Chip Issue 78 - Jan 2021

IT PAYS
TO PLAN
IF YOU’RE
LOOKING
OFFSHORE
By Kim Rassou, Portfolio Manager at
Old Mutual Wealth Tailored Fund Portfolios
Incorporating an offshore component into an
investment portfolio makes sense for every
investor; doing so provides exposure to the world’s
leading economies and high growth industries
while spreading the investment risk.
even individual stocks and property. Without a plan,
they tend to build their portfolios from the bottom
up, focusing on investments piecemeal rather
than on how the portfolio as a whole is serving the
investment objective.
Amid forecasts of declining domestic growth and
extreme uncertainty, when offshore investing seemed
the obvious choice, the past few months have shown
that no economy is immune to a global crisis.
Many will be enticed by projected returns, the
buzz around tech stocks, or the sense of security of
having dual citizenship that comes with investing in
international property. However, in my professional
experience, decisions that are influenced by fear,
vanity or greed are the worst an investor can make.
Do-it-yourself investors tend to focus on the markets,
the economy, the asset manager’s performance and
The possibility that these decisions are based on an
irrational assessment is exceptionally high. Nonprofessional
investors tend to “trust their gut” – and
generally don’t understand market valuations, nor
the underlying forces driving the performance of
Facebook, Apple, Amazon, Netflix and Google (the
FAANG companies), for example.
It follows that these investors wouldn’t necessarily
understand, for example, the full impact of COVID-19
on the FAANGs, whether these stocks are currently
trading at fair value, or if they’re overpriced or in
bubble territory.