Growth Shares: A House Of Cards?

Schalk Louw explains why being overweight in growth shares could leave you exposed.

- Schalk Louw

I think most of us have attempted to build a house of cards at some or other point in our lives. A single card is such a light, nearly two-dimensional item, but if you go about it carefully by first placing two sides upright, and then placing your card roof on top, you will have your first house of cards. From there, you’ll add a few rooms to each side and once the structure is stable enough, you’ll start with your second storey. If you continue to repeat these steps, your house of cards, which started with only one card, will rise higher and higher.

At some point, however, the structure will start to become unstable, but despite this, we have a tendency to keep aiming higher. Eventually, it doesn’t matter how light these cards are, you will always end up regretting that one misplaced card that made your entire house of cards come tumbling down.