Zachary Cefaratti is a risk officer at Dalma Capital Management, a hedge fund manager based in DIFC. The 26-year-old American has lived in the UAE for two years.
Describe your financial journey so far.
It began at the age of seven when I was encouraged by my grandmother to invest money I earned as a child actor in Hollywood. I began conservatively by purchasing California and New Jersey municipal bonds in a custodial account, following the guidance of my risk-averse grandmother – a survivor of the Great Depression. I quickly became obsessed with bond investing, preferring physical bonds that I could display in my room next to my Lego sets. Growing up in Newport Beach, California I became familiar with a local firm called Pimco – which happens to be one of the world’s largest bond fund managers. I learnt from them that I could increase my returns by trading my bonds. As I grew up, I was a serial entrepreneur. I was my neighbourhood’s go-to service provider – cleaning houses, walking dogs, selling soft drinks, repairing and building computers – doing whatever I could to get my hands on money to buy more bonds and Lego.
How did you end up in the financial services sector?
I began as a bank teller at 16 when I was accepted into a selective high school internship programme with a local Newport Beach bank. I also worked my way through a Swiss university as an insurance and mortgage broker; in my free time I served as the president and founder of my university’s investment club. I was then finally able to enter my dream career in investment management.
Are you a spender or saver?
I’m an investor. I invest in my company and in the financial markets, but I also invest in my health, my entertainment, my well-being and my loved ones. I differentiate this from “spending”.
What is your philosophy towards money?
Always focus on the management of financial risk before the management of financial returns. People who seek risk-free return more often end up with return-free risk – while those who simply chase returns end up eventually taking losses that destroy the rate at which their wealth compounds. Managing money is all about taking smart risks by making investment decisions based on the risk you are willing to take rather than the return you would like to receive.
Have you made any financial mistakes along the way?
As a young computer nerd, my portfolio became very overweight with dot-com and tech. In 2001, I learnt an important lesson as markets crashed when the dot-com and tech bubble burst. I learnt that the best way to manage my returns was to manage my risks.
If you won Dh1 million, what would you do with it?
I would invest Dh999,000 in my company and take the remainder to Zuma for a celebratory dinner with a special someone.
What has been your best investment?
In Dalma Capital. I believe wholeheartedly that we have our industry’s equivalent to the recipe for Coca-Cola.
Do you plan for the future?
I plan for the future by setting goals I seek to achieve, identifying risks I seek to mitigate and maximising the potential value of outcomes through hard work.
What do you enjoy spending your money on?
My guilty pleasure for spending is on Apple – both their products and their stock. I have been planning my purchase of the Apple Watch since mid-2013, when I deduced the timing of its production as Apple struck a deal with a firm using particle accelerators to mass manufacture sapphire glass.
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