The Impact of Culture on Investment Performance

Over the years of researching asset managers in South Africa and globally, there have been many cases of successful asset managers who have seemingly fallen apart, lost assets and faced uncertain futures. This deterioration often happens quickly and without warning. We spend significant time analysing whether there is a common thread running between these firms that face collapse. Is there any specific factor or common denominator that we could focus on which would allow us to identify those asset managers in advance and avoid them?

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Financial Needs Analysis: counting pennies, creating wealth

To build a sound investment plan for the future, the first thing you need to do is consult a financial planner who will conduct an analysis of your current situation with the view to connecting your financial status with needs and goals. From this starting point, a strategy can be set in place comprising steps to a well-considered investment regime that will ultimately build the kind of wealth you dream of and hope for. It’s a thorough investigation of your financial affairs. A financial needs analysis is therefore essential to preparing for, and accessing, future financial needs.

There is no one plan that suits everyone, which is precisely why the individual analysis must be done. It’s a process that will be affected by five major factors: current wealth; income; health; dependents; and goals.

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A Partnership for Life: transparency and your financial advisor

“There’s no single professional that’s right for all clients.” ~ Gerri Walsh, vice-president for investor education, Financial Industry Regulatory Authority (Finra).

Service is generally about politeness, competency and going the extra mile to help a customer. But the service provided by your financial advisor is a different story altogether – because here you are looking at the very epitome of trust, the basis of a partnership for life.

And therefore it should be a relationship that is open, honest, forthright and enduring. In fact, a friendship. And the key to this, is transparency.

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Thirtieth Anniversary of Foster Wealth

The 1st of June 2018 marks the thirtieth anniversary of the founding of Foster Wealth.

Honesty, integrity and loyalty to clients were the cornerstones on which we started to build the business and these values still remain integral to our business thirty years later.

While we celebrate what we have achieved over the past thirty years, we reflect most of all on what a great privilege it has been to serve our clients. Many of the families that became clients in 1988 remain clients today, even though some of them no longer live in South Africa.

There are many events to reflect on:

  • We didn’t think in 1988 that a number of our clients would leave South Africa.
  • In 1988 there were 36 unit trust funds to choose from, however, little did we realise that by 2018 they would have mushroomed to 2103!
  • We were all generally concerned about the political landscape and had no idea that Nelson Mandela would be released in 1990 and that there would be a democratically elected government by 1994.
  • “State capture” was unheard of.

Nevertheless, despite all the political changes over the last thirty years, our clients’ investments have grown. This is, perhaps, the most significant reflection: we should not be influenced by short-term political issues.

We have survived major stock market crashes:

  • Most notably 1987,
  • The so-called Tech stock implosion of 1998,
  • The global financial crash of 2008/2009,
  • At least one major South African currency crash being that of 2001,
  • Several downgrades of the countries credit rating.

Consequently, we feel that it is worth reflecting on what long-term investment truly means: it means staying in the market, sticking to your long-term objective and not being distracted by political issues, stock market crashes or credit rating downgrades.

Our founder, Peter Foster, retired in 2017, handing over the reins of Foster Wealth Management to his son, Thomas Foster. Thomas and his team are passionate about maintaining and enhancing the honesty, integrity and loyalty that our clients have come to expect.

With this, we would like to express our sincere gratitude towards our clients for their loyalty to Foster Wealth and consider it a privilege to continue to serve you in the future.

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World Debt and Investment: risk and reality

“Everything we get, outside of the free gifts of nature, must in some way be paid for.” ~ Henry Hazelitt ‘One Lesson: The Shortest and Surest Way to Understand Basic Economics’

Debt is a complex issue – and depending on how it is controlled – can have either positive or negative effects. In its simplest form, debt could well look like this: if you owe more money than you earn, you are bankrupt, actually poor. Yet the world seems determined to ignore this reality and continues to spend beyond means and borrow beyond ability to repay. The effect is the same whether you’re an individual, a company, or a country.

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