At IJG we believe in the basic concept that our services should be tailored to fit our clients' personal and business needs. As an established market leader, we work with our clients to craft bespoke financial solutions, which include –

IJG Capital is the fund manager and service provider to the following investment funds and investment holding companies:

“Price is what you pay, value is what you get” – Warren Buffet

Rugby Rules For Protecting Your Capital

Sometimes it helps to start by focusing on what something is not. Leaving your cash under the mattress is one of the surest ways to cause a permanent loss of capital. No, not necessarily due to burglary on your premises, but rather the simple facts of economics. If one works with a long-term average inflation rate of 6%, your purchasing power will decrease by 50% every 12 years. Put differently, the average cost of consumption will at least double over a 12-year period. Why “at least”? Because not everyone consumes the average basket of goods or services. Private medical care, for example, on average increases by around 10% per year – and so the list goes on. A 12-year period is a relatively short time considering such a significant effect on your capital. Einstein said that compound interest (interest on interest on interest…) is the eighth wonder of the world, and his reason was that wealth is created exponentially, not in a linear way. Inflation is also exponential and therefore the effect over a 12-year period is so substantial, albeit in the wrong direction. If you want to win a rugby game, you at least need to be in the game. Leaving money under the mattress or even just in a bank account, means sitting on the sidelines. If you think “maybe I can sit on the side-lines for a while and re-enter the game when the time is right…”, the problem is that when it comes to investments there is too much evidence that it is not possible to consistently get your timing right and that you most probably will end up chasing your tail as well as incurring unnecessary transaction costs. The question remains, how do we protect capital? We now know that at least we need to be in the game and grow our assets in tune with inflation, but we still need to know what is necessary to at least grow them at the same rate as inflation. The two goal posts for which you have to aim are adequate diversification and paying the right price. They have to be considered together and require a balancing act when aiming to create an all-weather portfolio, allowing you to play well at Newlands and at the Hage Geingob Stadium. Adequate diversification means that you don’t place all your eggs in one basket. If you want to invest in businesses it would be wise to invest in 30 stocks, for example, not just one. Read More

Layers of Investing – where to begin 

The range of options available to investors can often be overwhelming. Where do you even begin? To answer this question it can be useful to break your investment decisions into three simplified layers: 1. The ‘why layer’ tries to establish exactly what your investment objectives are. It attempts to answer the question as to why is it that you want to invest. 2. The ‘when layer’ tries to match your investment objective with an appropriate investment time horizon of the solution considered. 3. The ‘where layer’ tries to tie together your investment objective, appropriate time horizon and investment geography. Within each layer come other considerations, so let’s go through each one in more detail. The Why Layer The why layer is a good starting block on which to base your investment decision as it lays the foundation for asset classes that might be appropriate for you, given your objectives. Your ‘why’ might be that you would like to put down a deposit on a house in 12 months’ time. In that case an investment that could be characterised as short-term might be appropriate. Alternatively, your ‘why’ might be that you would like to start planning for your retirement right from your very first paycheck (good for you). In this case, an investment characterised as long-term might make more sense. Either way, you have now established a ‘why’ and can move on to the ‘when’. The When Layer Now let us consider your investment time horizon and your volatility risk profile. A volatility risk profile refers to up and down movements on your investments and how willing you are to absorb these movements, whereas your time horizon refers to the projected length of time over which an investment is made or held before it is liquidated. This might sound a bit technical but the concept is actually very simple. Going back to our previous examples: You need a certain amount to put down a deposit on a house in 12 months’ time. Let’s work with a future value of N$100,000. Thus your investment objective is N$100,000, your time horizon is 12 months and your volatility risk profile would most likely be very low. A low volatility profile means that you are not willing to see large fluctuations in the value of your investment and would prefer a steady rate with a steady return that will result in the amount of N$100,000 with a high level of predictability. For instance, if you worked on a money market rate of 7.5% on an annualised basis (compounding monthly) you could calculate what you would need to put away per month to reach your future value of N$100,000. In this instance you would need to put away ~N$8,050 per month for 12 months to reach your objective. As another example let us consider a 30-year-old who is saving for her/his retirement. Read More