Crafting Your Investment Strategy to Reflect Your Unique Goals

Your goals are as unique as you are. Therefore, your personal investment strategy needs to reflect where you are headed, how you plan to get there, your specific objectives, when you want to achieve them, and what level of risk you are willing to accept to reach your goals.

Successful investing requires Intelligence, Action, Patience and Discipline. By understanding our investment beliefs and methodology, you will have greater peace of mind and pass the critical ‘sleep at night test’ while we work hard to help you reach your financial and personal goals.

Preserving the real value of your capital after fees, taxes, and inflation is crucial to living the lifestyle you desire.

Achieving a return greater than the rate of cash requires you to take on risk, but it only makes sense to do so when the rewards from taking on the risk are greater than the risk itself. Markets are efficient over the long term.

There is a lot of volatility in the investment markets; however, over the long term, the growth asset classes (Australian shares, International shares, Listed property) have tended to offer returns that have outpaced the impact of inflation, taxes and fees on your portfolio.

We do not speculate on where the investment market will be this month or next month. We do not feel anyone can do this with any certainty, and therefore we stick to proven principles of long-term investing when managing your capital. This also means we invest for the long term, not the short term.

We believe in diversification at three levels. Diversification across asset classes, diversification across fund managers and diversification across investment styles. By utilising this approach, we can reduce risk, as well as get a smoother investment return for you.

Although over the longer-term markets are efficient, in the shorter term, there are opportunities for the astute asset manager to take advantage of any inefficiencies in the investment markets. A neutral position would be to have half your portfolio actively managed and half passively managed.

We must look at the investments themselves and peripheral aspects such as currency and liquidity. With currency, our neutral stance is to have half our international share and property portfolio hedged, and all of our fixed interest exposure hedged.

When choosing investments, we look for investments with a high degree of liquidity as we do not want to be in the position of a forced seller due to some illiquid assets within a portfolio. We saw this through the global financial crisis and will happily take less return to have liquid assets.

Professional fund managers can add value over time through their superior research capabilities, knowledge and experience and can play an important role in the ongoing management of your portfolio. The benefits can be through decreased risk exposure in terms of not owning specific stocks that an index manager may have to own.

With high market volatility, monitoring the market and your asset allocation is critical to long-term investment success. It could mean that stocks are no longer fit for purpose or a fund manager has left a fund which would necessitate a review of the ongoing suitability of that fund among just two examples among many.

Our first role is to maximize the probability of you achieving your goals. Our second goal is to try and get you the best possible return after fees and taxes. To do this, we will go and negotiate discounts on your behalf with investment platforms and fund managers and look to use low-cost funds when we feel it is prudent. We will not ever invest your money only to reduce fees and taxes as that is not the way to investment success but is undoubtedly thought as we build your portfolio.

Intelligent investing says to buy low and sell high, yet most investors do not achieve this. By having a disciplined approach to portfolio rebalancing, we are able to do this at set time periods for your portfolio. This achieves the ability to buy assets that have underperformed and sell assets that have outperformed. This reduces style drift as well as investment bias to want to hold onto winners.

Many investors build a portfolio to give a certain amount of income which is problematic whether it be dividends being reduced or rents not paid. After building the right structure for your portfolio, the goal is total return and having a portfolio system that can continue to pay you income and have capital there should you need to access lump sums occasionally.

Using a third-party custodian to hold your investments which goes through a strict ongoing management assessment, ensures that you can have peace of mind that the investment strategies we are pursuing are reputable.