Investing is just like making wine

1. Momentum Collective Investments (RF) (Pty) Ltd
268 West Avenue Centurion 0157 PO Box 7400 Centurion 0046
Client service 0860 111 899 T + 27 (0)12 671 8911 F +27 (0)12 675 3889 ci.clientservice@momentum.co.za momentum.co.za/collectiveinvestments
Please refer to our website for directors and company secretary details Registration number 1987/004287/07
Momentum Collective Investments (RF) (Pty) Ltd is part of Momentum Metropolitan Life Limited, an authorised financial services and credit provider (FSP6406)
Momentum Metropolitan Holdings Limited is a full member of the Association for Savings and Investment SA
Investing is just like making wine
”Wine to me is passion. It’s family and friends. It’s warmth of heart and generosity of spirit. Wine is
art. It’s culture. It’s the essence of civilization and the art of living.” – Robert Mondavi
I’m not a wine expert, maybe I’m just an informed wine snob, fascinated by the complexity and
creativity of wine and winemaking. It’s a fairly simple thing, right? Just fermented grape juice.
While enjoying a superb wine is one of life’s great pleasures, the carefully managed journey from
grape to glass is often overlooked in the joy of consumption.
Similarly, careful decision-making is critical for superior investment outcomes. The trick in making
a superb wine, and indeed the trick to having a smooth investment journey, is making the right
choices at the outset. The Art of Winemaking and the Art of Investing both require professional
skillsets as well as pure patience and faith in one’s process.
Even with loads of strategic planning, the winemaker is constantly on a journey of discovery. He
may know the vineyards well but his learning and adjusting in the search for success never cease.
An investment manager in turn positions his portfolio for success, yet is constantly balancing risk
against return.
Just as the winemaker invests in his craft by often upskilling to become a cellar master and
viticulturist to give superior quality to connoisseurs, so the investment manager upskills to
become a behavioural expert and economist to understand the market dynamics so that he can
create a strategy to get the investor to his desired outcome.

2. Page 2 of 3Momentum Investments | Document name | Date
Great wine is made in the vineyard
A host of variables determine the quality of a wine: soil composition, rainfall, direction of the
sunlight, prevailing winds, gradient of the vineyard, row direction and timing of the harvest.
Where grapes are grown is the single most important aspect of winemaking. The French refer to it
as terroir, that little bit of je ne sais quoi that turns a good wine into an unforgettable experience.
Terroir in winemaking is akin to an investment manager’s philosophy and process. An investment
philosophy represents the guiding principles behind a company’s belief system when investing.
Every successful investment philosophy will have the following core principles:
 Proficient, passionate individuals where client centricity is at the core of the process.
 A robust, repeatable and flexible process that has been tested through a range of
market cycles.
 The ultimate focus is achieving the client’s investment outcome over the long term.
Staying the course
When planning the best cabernet sauvignon, preparing the vineyard is likely to take at least two
years, especially if it involves removing old vines and minimising pest or disease control. From
planting to reasonable crop is likely to take four more years, and to get to the desired yield levels
and stable quality can take a few more years. The wine is likely to require at least three years to
mature and age before release. And a wine expert will claim a good cabernet needs seven to nine
years in the bottle before savouring.
Patience and staying the course in winemaking can be likened to an investor staying invested in his
portfolio and reaping the ultimate rewards by not becoming emotional and taking risks. Staying
invested over the long term is like giving your investment time to mature. It will often deliver a
stronger outcome than listening to noise and jumping in and out of investments. Like fine wine,
investing needs the right blend of preparation and perseverance to yield the best results.
Five steps to choosing the right investment:
1. Sit down and honestly assess your entire financial situation.
2. Choose an investment house that focuses on putting the client’s needs first.

3. Page 3 of 3Momentum Investments | Document name | Date
3. Choose an investment house that stands for predictability and stability in what they
do. Make sure that your investment journey will be as comfortable, predictable and
smooth as possible.
4. Have a plan, stay invested and know the goal that you are working towards.
5. Map your journey and understand that you need compelling reasons to change the
journey.
“Tell me what you drink and I will tell you what you are,” said Brillat-Savarin, one of the first
gastronomic writers. Appreciation for wine shows that you have taken time to understand
complex things. If you’re new to investing, it’s very easy to feel overwhelmed by the
language, complicated ideas, new decisions and conflicting advice. It doesn’t take a PhD in
finance to be a good investor, just as you don’t have to be a viticulturist to learn about and
enjoy this mysterious, liquid silk beverage called wine.