Colgate vs Bitcoin: Reasons to invest in the goliaths
JOHANNESBURG – Amid rapidly changing economic conditions, trends and technology, South African investors seeking to grow their wealth should be wary of attempting to identify the next Bitcoin or Apple. Instead, choosing to invest in well-established, multinational brands with proven track records is a far better predictor of future investment success, says Scott Cooper, chief executive of CybiWealth.
CybiWealth is a low-cost digital platform that enables investors to purchase shares in an offshore investment portfolio of 20 select, high-quality multinational companies including Colgate, Coca-Cola, Unilever, Johnson and Johnson, L’Oréal and Nestlé.
Cooper states that the immediate benefits of choosing to invest in global companies versus tech start-ups lies in their pre-established positions as market leaders, with global distribution networks and a history of reliable capital growth.
“Consider, for instance, that 15 years ago it would have been extremely difficult to predict that Apple would be where it is today. There were perhaps ten other companies that were similar to Apple that simply didn’t succeed in the same way that Apple has. So, when looking at start-ups, you may choose the next market leader, but there’s also a strong possibility of getting it wrong.”
Likewise, he points to the example of Bitcoin, which has plunged some 70% since reaching record highs in December 2017.
“If you look at Bitcoin, it’s also impossible to say what the price will be in five or ten years. The price is extremely volatile, and the downside of that volatility is that there’s just no way to know where your investment will be in the future,” he notes.
“By comparison, it’s much easier to predict where companies such as Coca-Cola or Johnson and Johnson will be in five, ten or even 25 years from now. We may miss out on picking the ultimate winner of the self-driving race, but the companies in the CybiWealth portfolio have all withstood the test of time.”
Content supplied by CybiWealth.