Expert Guidance Every Step of the Way
Investment is about the probable and the possible, it’s about risk and duration. It’s about you, your age and stage in life, your plans, your tolerances and ambitions.
Outcomes are a function of methodology and planning. There is no such thing as risk free return, however, historic data suggests it is possible to achieve a reasonable level of predictability over the long run. In developing an investment strategy, due consideration should also be given to external factors such as taxation and how inflation will impact the spending power of your wealth.
Managing risk through diversification, avoidance of behavioural mistakes and other good practice will maximise long run returns.
Here are some beliefs that inform our investment philosophy:
Markets are imperfect but broadly efficient – a market price reflects all known knowledge and the collective wisdom of all market participants. In practical terms this is the best way to price things.
Diversification disperses risk – if you own shares in a single company and it fails, you will lose everything. If you own that company and 999 others, such a failure will have minimal impact.
Market returns trump manager skill – A greater portion of your return will be a function of underlying market returns as opposed to individual manager skill. This leads us to respect a passive or market tracking approach however we also believe active managers can add value.
The longer the term of your investment the more predictable the result will be - Long run market data informs us that the range of probable returns narrows over time. This is particularly informative in developing risk appropriate strategies for long term investors.
Process drives outcomes – We cannot predict the future, neither can anyone else. Long run historic data informs us as to probable future outcomes. In setting a plan we aim towards outcomes within a reasonable target range. This is informed by duration and other risk factors.
We are not overly concerned by near term volatility or news-flow. We are investors and not speculators or traders. Near term movements have little impact on long run returns. As target duration decreases, risk levels should be adjusted to reflect target outcomes