Personal investing

True rewards take time

Allan Gray’s advertising strategy has always been built around the characteristics of the firm and continues to tap into human truths that connect with our audience at an emotional level. Zwelethu Nkosi explains the message of our latest campaign and the relevance to you when it comes to your investments.

When we embarked on our advertising journey 16 years ago, it was our desire to make our investment management services available to a wider and more diversified client base. Our approach was to illustrate who we are, what we believe, and our investment philosophy. Fast-forward to 2018, and our rationale and approach to advertising remain the same.

Our challenge is to keep telling stories and delivering messages about our approach to investing in a novel way that captures the imagination of our audience. We believe that stories influence behaviour and can encourage our clients and potential clients to embrace the values that are important for the brand. The extent to which these values are embraced reflects the success of our advertising efforts.

The campaign insight

Any good advertising campaign is founded on a deep, meaningful and timely insight. The insight for our new corporate campaign is that we live in a world of instant gratification. As a long-term investment manager, it is important to remind our audience of the benefits of delayed gratification by subtly tying them in with the benefits of long-term investing.

Borrowing from the old cliché “anything worth doing takes time” to counter a short-term outlook and the quest for instant gratification, the campaign endeavours to make our audience realise the value and the rewards of waiting. The campaign slogan, “True rewards take time”, remains true to our brand positioning, “Long-term investing”, by delivering messages that tell a great story about Time.

Our advertising mix

To ensure a rich platform from which to communicate our new advertising message, we have launched an integrated campaign that runs across television, newspapers, magazines, airport billboards, radio and cinema.

Each medium plays a different role in delivering the same message using stories, visuals and thought-provoking statements that illustrate the commitment and perseverance required in the investing process. We continue to use television to convey the emotional component of the brand, while airport billboards, newspapers and magazines (mostly financial press) play a supportive role and communicate more rational messages. The radio ads allow us to add an element of wit, charm and humour in how we convey our brand message.

The television commercial

Our new television advert, “Father’s share”, is a gently humorous and heart-warming story about a father who teaches his children the discipline of long-term investing. Set in South Africa and spanning five decades, the story gives us a glimpse of South African life rarely seen on our television screens. Rich and heartfelt performances by the cast, language, carefully considered period pieces in wardrobe, furniture, props and classic black-and-white footage bring the story to life and transport us to a part of our history whose indelible footprints linger to this day.

In a dramatic twist in the final scene, the purpose of the ledger is made evident and we come to understand its meaning when the children’s uncle reveals that their father had saved every cent for them.

The story explores the relationship between parents and their children, one that we can all relate to. Told from the son’s perspective, it is a tale of a seemingly punitive father who takes a portion of his children’s earnings from the time they are young to adulthood. From a young age, the father teaches them the concept of putting aside a portion of one’s earnings. Much to his children’s dismay, the father is undeterred by their silent protest and continues to solicit a portion of their earnings long after they have left home.

As the father takes his share, we are introduced to the harsh reality of having to do with less than what you have earned for a hard day’s work. In so doing, the story does not romanticise or shy away from the hardship of long-term investing and the discipline required. As the story unravels, the viewer is provided a clue in the form of a ledger, as we see the father diligently making notes every time money exchanges hands.

The advert is the illustration of the discipline, patience and commitment required for long-term investing. It tells a universal tale that subtly echoes the essence of Allan Gray’s philosophy, our focus on the long term, and how patience pays off. Through the father’s actions we are taught how a single considered act repeated consistently over a long period of time can reap rewards.

We believe that “Father’s share” delivers a powerful, meaningful and inspirational message portrayed in a touching manner.

Stories are touching, but what does this mean for my investment?

The shortcomings of instant gratification
Satisfying immediate desires can leave one completely under-resourced (or unprepared) for the future. While the fulfilment of an immediate desire requires one to act on impulse, the ability to put things off requires self-control and planning, attributes that can be particularly difficult to muster. The ability to wait is one of the building blocks toward long-term wealth creation.

The impact of investor behaviour
A simple guideline that forms a basis of a good investment partnership is as follows:
Above-average investment performance – Fees + Good investor behaviour = Investment success
The above equation puts into sharp focus how your behaviour can influences outcomes. Given the cyclical nature of investment markets, behaviours such as timing the market and switching in and out of funds following a period of underperformance can destroy wealth by permanently locking in the losses.

On the other hand, continuously chasing unit trusts that have recently enjoyed a period of outperformance can also result in buying high and selling low – thereby eroding value. Making rational and not emotional decisions is the key to investment success, and an independent financial adviser can assist with the discipline of investing or help you make informed decisions that are not influenced by temporary market conditions.

The power of compounding
Time is an essential ingredient for successful investing. The longer you leave your money to grow, the more you can benefit from the power of compounding – earning returns today on the returns you earned yesterday. Given a long enough period to work, compounding can dramatically multiply the value of your investment so that less of your total investment will be from your contributions and more from growth.

Time in the investment process
Time is also an essential ingredient for our investment team as they make investments on your behalf. They hunt for shares that are unloved or unfashionable and it takes time for the market to see their value and for the shares to reach their true worth. This can take years, but if the portfolio manager has high conviction in his or her ideas they will be prepared to wait for the thesis to play out. Patience can be handsomely rewarded.

Investors often ask how long is long enough. When it comes to your investments, your time frames are often influenced by your goals: You have longer to save for your retirement than for a holiday or a car, for example. When it comes to investments we make on your behalf, it depends how long it takes for a share to reach our estimate of fair value and what opportunities present themselves along the way, but generally when investing in equities, we believe you need at least five years. But we have been known to hold on to a share for much longer.

True rewards take time.

To see the full campaign go to www.allangray.co.za/advertising.

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