Are You Measuring Real Growth or Just Keeping Up with the Joneses?

In the world of investment, we’re constantly bombarded with big numbers: “15% return,” “Fund X outperformed the benchmark,” and “Market is hitting new highs!” But here’s the critical question you need to ask yourself: Is your portfolio truly growing, or is it merely treading water against the invisible current of inflation?

For South African investors, focusing on nominal returns—the raw, stated percentage gain—is a dangerous illusion. Real growth is the only measure that matters; it is the growth of your capital above the rate of inflation. It represents the true increase in your purchasing power. A 10% return in a year with 7% inflation is a deceptive win—it’s only a 3% real return.

We need to start measuring success not by what looks good on a statement, but by the actual wealth we are creating.

Are We Caught in the Big Fund Narrative?

It’s easy to get swept up in the marketing and myth-making of major financial institutions. Have we accepted the “big fund narrative” of what makes a return acceptable?

This narrative often focuses on beating a local benchmark (like the JSE All Share Index) or achieving an arbitrary target. While benchmarks are useful, they can become a trap if they distract from your ultimate goal: preserving and growing your purchasing power.

When you look at returns through the lens of real growth, you might find that high-profile funds, due to structural inefficiencies, hefty fees, and an obligation to track complex indexes, often deliver disappointing results. Ask yourself: Are we measuring success by the size of the fund or by the quality of the return?

Don’t let the pursuit of simple, high-nominal returns lead to poor timing and worse outcomes. Real wealth creation demands clarity over complexity.

The Global Investment Trends You Need to Know

To achieve real growth, you must look beyond local headlines and understand the forces shaping global capital markets. These are the trends creating new opportunities for investors to outpace inflation:

1. The Rise of Private Credit & Alternatives

In a world where traditional public markets are becoming volatile and yields are often low, sophisticated investors—including global family offices—are shifting capital toward private credit and direct investments. These alternatives can offer superior, less correlated returns, helping portfolios escape low-yield environments and providing a true inflation hedge.

2. The Power Duo: Technology & Sustainability

The biggest long-term growth stories are found at the intersection of innovation and necessity. Artificial Intelligence (AI), renewable energy infrastructure, and digital infrastructure are attracting massive global capital flows. Investing in companies and funds driving the necessary transition to a sustainable, digitized world is a powerful strategy for generating real, long-term returns.

3. Adapting to Deglobalization

The world is moving from a fully interconnected, single-supply-chain model to a more multipolar one. Investors are adapting by prioritizing supply chain resilience and investing closer to home, or in regions strategically positioned to benefit from new trade alignments. This shift creates unique investment opportunities in logistics, local manufacturing, and national security-related sectors.

4. Beyond Local: Global Mobility and Real Assets

Global mobility is no longer just for the ultra-rich. Entrepreneurs are increasingly blending lifestyle with legacy planning—focusing on global asset diversification, multi-residency strategies, and investments in real assets like luxury real estate that provide both utility and an inflation-resistant store of value.

Your Strategy for Real Growth

It’s time to redefine your investment success. Here’s how you can pivot your focus from the nominal illusion to the real growth that builds lasting wealth:

1. Focus on Real Returns, Not Nominal Gains: Insist on seeing performance figures after they have been adjusted for inflation. This is the only figure that reveals if you are actually getting richer.

• Diversify for Inflation: Actively seek out assets that historically perform well when inflation rises: Real Estate, Commodities, and essential Infrastructure funds.

• Educate Yourself on Global Trends: Don’t just follow the local stock market. Your wealth will be preserved by aligning your investments with the dominant, forward-looking global trends mentioned above.

• Challenge the Narrative: Always scrutinize the fees and real performance of any fund. Are they making you money, or just making themselves money?

It’s time to move beyond the illusion of growth. Real wealth is built when your investments outpace inflation, align with global trends, and reflect the true increase in your purchasing power. Are you ready to rethink what growth really means?

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