Passive + Active: The recipe for a mature investment portfolio

Feel free to reach out to PSG Wealth Adviser Chrisley Botha  directly.

Over the years, I’ve realised that investing works in much the same way. There are times when it makes sense to simply follow the market – passive investing. But there are also times when you need to actively seek out those “boutique” opportunities that unlock unique value. The key is not choosing between the two but combining them intelligently.

Passive: The solid foundation

Passive investments are like that reliable bottle of wine. You know what you’re getting, it’s affordable and straightforward, and it forms a solid foundation to build upon. An index fund that tracks the JSE Top 40 or the S&P 500 is a good example. You gain broad exposure, low costs, and long-term stability.

Every investor needs this core of passive exposure. It helps diversify and stabilise your portfolio, especially in a world where you can’t always predict what the economy will do.

Active: The search for value

But, as any wine connoisseur knows, it’s not always enough to buy the big, well-known names. Sometimes you need to taste, compare, and discover. This is where active management comes in.

Active fund managers use experience, insight, and research to deliberately decide where to invest – not just to follow the market, but to try and outperform it. This means managing risks carefully, identifying trends early, and spotting the companies that not only continue to perform but actually thrive in challenging environments.

I often think of a small wine estate that, with care and dedication, produces a wine that surprises you – a product with character that doesn’t shout from the shelf but offers great value to those who discover it.

The current environment

I often hear the question: “Is the South African investment environment really as bad as it looks?” Yes, our economy is under pressure – low growth, structural challenges, and political uncertainty are all very real. But the market is not the economy.

There are still exceptional companies – established giants and smaller innovative firms – that don’t just survive, but flourish in difficult times. Active management is often what identifies these hidden gems in time and unlocks them for investors.

More than just diversification

Active management isn’t just about which sectors or countries you choose. It’s about when you move, and why. Sometimes it makes sense to hold liquidity and stability in a money market fund. Other times, you shift into sectors like technology or healthcare, or increase exposure to international markets.

The key is dynamic adjustment – not blindly holding, but strategically moving as conditions change. This is precisely the value a skilled active team brings.

My advice to investors

If you feel uncertain about your investments, remember this simple principle: don’t let your emotions drive your decisions – manage your portfolio.

The right balance between passive and active strategies gives you both stability and growth. Work with an adviser who understands your goals, risk profile, and time horizon, and who can help you find the right combination.

Because you can’t control the market – but you can choose who manages it for you.

Closing thoughts

Just like wine, good investing requires patience, knowledge, and balance. You need those established, passive components that mature steadily. But you also need the active element – the experts who know where and when to look for value.

That combination of wisdom and boldness, stability and dynamism, is what truly lets a portfolio flourish.

And at the end of the day – whether you’re building wine or wealth – it’s not just about what you buy. It’s about who you trust to choose it with you.

Feel free to reach out to me at: ChrisleyBotha@psg.co.za | 082 413 1811