Every long-term performance chart will show you that equities outperform other asset classes. But as my Biznews colleague Jackie Cameron explains in today’s fun contribution, for most people the real wealth creator has been their own homes. Clearly, one should never under-estimate the impact of leverage in a rising market.
Jackie Cameron writes: “When I was 18, a good-looking fellow student intercepted me as I was coming out of a Rhodes University lecture hall. ‘Do you play bridge?’ he asked. ‘Oh no,’ I replied quickly, slightly appalled at the idea that he imagined I might be hanging out with the blue rinse brigade on Saturday afternoons.
‘That’s a great pity. I’m looking for a bridge partner,’ he said, revealing that he had got hooked on the game to keep himself occupied on boring army duties north of the border. Always quick to spot an opportunity, I immediately indicated that I was ‘willing to learn’ the game.
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And so, after three weeks of brain-vexing informal card lessons, I too was addicted. That boyfriend did not survive beyond graduation – as I wasn’t the only student who found him irresistibly handsome.
Nevertheless, bridge has been an enduring feature in my life. Over the years I have entered into bridge ‘marriages’ with an array of interesting people. My husband used to joke about my Thursday partner in Cape Town, 85-year-old ‘boyfriend’ Louis, whom I sadly ‘divorced’ after he slammed his fist down on a table and shouted at me in a bridge competition. ‘No, bridge is not just a game – we are here to win!’
These days my regular bridge ‘lift’ is an actuary and retired asset management boss who plays golf with the who’s who of the Scottish financial services community. Aside from the fun of being ferried to a bridge club in his gleaming Porsche Cayenne and his statistical wisdom on where cards might lie in various contracts, I value those journeys for the chit-chat about investing.
You can learn a lot in an hour each week listening to someone who has lived and breathed asset management and watched the market ups and downs over decades. This man is still active in the investment community, too, serving on the board of a listed investment trust and various other boards and funding committees.
Although he advises on equity investments, his most revealing insight, perhaps, is that it is not the stock market that is largely responsible for ensuring many Brits have retired comfortably in recent years, but gains from residential property. Looking back over decades, equities are a poor cousin to real estate in terms of long-term individual wealth creation, is his observation.
I get the idea that my Porsche-driving bridge opponent – we have our own partners and, yes, it is a case of guns on the table once we enter the competition room – appreciates the conversations with me, too. I say this because occasionally he presents me with gifts. Tomes like ‘Put Not Your Trust in Money – A history of the Investment Trust Industry from 1868 to the present day’, written by industry leading light John Newlands.
When news emerged last year that his Aberdeen-based pal Martin Gilbert was negotiating a deal to merge his business with insurer Standard Life, my bridge friend wasted no time getting to me the coffee table ‘The History of Aberdeen Asset Management’. If there is one person in Scotland who would appreciate a history lesson on a major investment story, it must surely be me?
Which brings me back to my student beau. A lousy boyfriend in the end, but I will always be grateful to him for the introduction to a game that has connected me with interesting people and, in so doing, enriched my personal – and professional – life.’
The best prods sometimes come from unusual places.
