Inside the Mind of a Portfolio Manager: Navigating Markets Overcoming Odds

I had the pleasure of having a sit down with a luminary who has not only mastered the art but also paved an extraordinary path in the industry of finance and portfolio management. Meet Antony Mwangi, a seasoned portfolio manager, whose journey from a modest background to the helm of financial success is nothing short of inspirational.

What initially drew you to a career in finance and portfolio management?

Coming from a humble background, my folks didn’t have an understanding of the financial world whatsoever. Understanding this drove me to venture into finance. I have always been fascinated by the operations of the Wall Street markets and I wanted to know more about creating a successful investment portfolio.

Do you have a pivotal moment or experience that shaped your approach to investing?

Growing up in an African household, we were brought up knowing that debt is bad and leads to poverty so I had this mentality that to invest, you need to have 100% capital. Then, I learned that the elite leverage what they have to fund their projects and enjoy numerous benefits. And that the easiest way to create wealth is through a well-managed debt system to supplement your equity.

How do you maintain a work-life balance in a demanding field like finance?

The best way was to open my practice, maintain a manageable clientele list, plan, and delegate. This frees up some time to strike the balance. A clear and relaxed mind is more productive.

What do you enjoy most about working as a portfolio manager?

The fact that I can piece information together, understand trends and can project the direction of a market before the larger public catches up. Information is key in any field and helps one make informed decisions.

Are there any hobbies or interests outside of work that you’re passionate about?

I read to unwind, I like the coast, specifically ship watching, and I am very passionate about flying, it’s still my goal to get a pilot’s license shortly, not commercial, just a PPL.

Do you have a mentor or role model who has had a significant impact on your career?

That would be Warren Buffett and the late Charles Munger, they’re the architects of Berkshire Hathaway. Following their process of decision-making, defending what’s rightfully theirs, and growing it into a $900B firm shows they have exemplary Portfolio management skills. There are a few more like Larry Fink, Jack Bogle, and Michael Burry.

How do you handle stress or pressure in your role as a portfolio manager?

Sometimes it helps to have a routine and an avenue to vent. The job requires a highly resilient individual that can compartmentalize matters. High crisis management skills and experience as well because it can be stressful sometimes.

What motivates you to continually strive for success in your career?

My family, to give them a better life than I ever had and pass as much financial knowledge to the next generation as I can. Also, am very competitive, and my urge to always be at the top of my game helps.

What is a valuable lesson you’ve learned from a past investment mistake or setback?

Chaos presents opportunities for those who are keen enough to plan. This comes from the 2020 pandemic crisis, I hesitated to act in time and minimize some risk exposure on some of my personal investments and the market punished me for it. My key takeaway was, to ignore the noise, focus on the market signals and consult with other experts.

How do you stay innovative and adaptable in an ever-changing financial landscape?

By keeping myself as informed as possible on emerging trends and news across the globe on top of the normal financial developments. You need to understand what’s going on in different markets and the implications in our local markets.

What’s the overview of your investment philosophy and approach to portfolio management?

I look at an investment with a long-term mindset, have a margin of safety, go for quality, and have a disposal strategy for any product in my mix should it cross the safety threshold. This helps minimize any risk posed by any single unit to the portfolio.

How do you assess and manage risk within your portfolio?

There are ways of calculating risks in the market and different ways of mitigating them. However, the best way of picking a well-balanced portfolio mix is to ensure to go for quality products in the market, don’t rush for the high-risk rewards units, instead balance out high-quality products supported by other factors and create a low-risk portfolio with an adequate rate of return for your investors.

What factors do you consider when selecting investments for inclusion in your portfolio?

Among others are the needs of our investors, the long-term yields, and the stability of the investment. The quality of the products like Apple, historical data analysis of the market, future projections of the market, various types and extents of risks, its suitability and compatibility, and movement with the other units in the portfolio. It takes a lot of data to evaluate and deem an investment viable as you have to cover a lot of angles to make an informed decision.

How do you stay informed about market trends and developments?

The best gift mankind has given themselves so far is technology. I have in my palm over a thousand times the processing power and information we didn’t have when the first man landed on the moon. I can access most of the information at the convenience of my house, but also doing due diligence, and visiting the trading floors and various bodies to be updated is very crucial. It’s necessary to keep your eyes open for opportunities, changes, policies, or emerging issues even in sectors that don’t directly touch on your investments.

Can you describe a successful investment decision you’ve made in the past and the thought process behind it?

A client of mine was looking to invest in a project that I had vetted. Unfortunately, they didn’t have all the required funds but had quite a sum sitting idle in the bank. I was able to negotiate a high-interest rate with the bank for a fixed but callable account. This is a low-risk high-yield move that’s making the client millions p.m as we work towards adding a more permanent unit in their portfolio.

How do you handle periods of market volatility or uncertainty?

This is where crisis management, planning resilience, and focus comes in. I ensure that my firm stays focused on our objectives, that we’ve planned ahead of time, that the units in our portfolio react differently to movements in the markets, and that we don’t panic or get excited depending on the short-term performances. To mention a few.

What metrics or benchmarks do you use to evaluate the performance of your portfolio?

There are various metrics we use in our firm, ranging from ROI, BETA, Standard deviation, and various ratios, we have our effective portfolio management criteria, and we also employ benchmarks.

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How do you tailor investment strategies to meet the specific needs and objectives of your clients?

Through well-coordinated communication with the client to understand their needs and provide guidance. Once we have a clear understanding of their needs, we then embark on comprehensive research and present options that fit our criteria to the client together with our recommendations supported by the data. This ensures that the client is always in the know of their portfolio mix and that they’re comfortable. In case of any adjustments, we have a process that involves notification, recommendations, and the power to act on behalf of the client in some scenarios.

What do you see as the biggest challenges and opportunities facing investors in the current economic environment?

The biggest challenge to investors at the moment is the instability of our country’s economy, the aggressive monetary policies and the rising interest rates, inflation rates, and high taxation are not conducive generally. However, Africa has the fastest growing economies globally and it’s predicted to be the next business powerhouse come 2050. We have various emerging markets in the Sub-Saharan region, these are presenting alternatives for Kenyan investors. We have Companies like Safaricom PLC, Equity, and KCB among others venturing and opening up East African markets and creating opportunities for other companies to invest in these markets. Also, due to our country’s technological prowess, we can think and invest globally.

Can you discuss any ethical or sustainable investing principles that guide your decision-making process?

I am very passionate about the environment, people, and wildlife. I try to avoid holding any interest in companies that don’t value these three aspects of life. So in evaluation, I consider what are they involved in, how their product affects the environment and wildlife, and how their products better human life. Are there studies, or legal entanglements that contradict their data? What is the precedent set in that industry in other nations?

Mwangi’s journey is not just a testament to personal success but also an invaluable guide for aspiring investors. As we conclude our conversation, it’s evident that the secrets to their success lie not only in numbers and market trends but also in the art of balancing passion, perseverance, and a profound understanding of the financial landscape.

Learn more about portfolio management here.

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