Tailor made investment solutions
So how do you make sure which strategy and ultimately which investment is right for you?
Portfolio construction is all about investing your funds into a variety of different assets and markets with various strategies in order to achieve a desired outcome. Do you invest your money in active or passive investments? Should I adopt a core-satellite approach or try and stock pick all my investments? Should I invest all my capital into a few investments or should I diversify and spread my funds? Should I adopt a top down or bottom up approach? How should I benchmark the performance of my portfolio?
The correct answer is it can be any of these strategies at any given time. Our tailored approach means that we are not constrained to one way of doing things. The most important thing is to first understand what you want in terms of needs and then putting together the most appropriate investment strategy.
By understanding each person’s specific goals, we’re able to construct a portfolio designed to deliver outcomes suited to each individual’s needs.
Having the right investment strategy is crucial to successfully building your wealth. Below we outline the steps we take in order to help you manage your wealth.
Identify your goals, risk tolerance and time frame – this builds the initial framework to help guide us and put together your investment portfolio. We take into account the desired level of investment return in order to achieve your goals and your ability to tolerate risk. We also need to understand over what time frame you are wanting to achieve these goals.
Choose the investment vehicle – different investment structures may have different outcomes, for example, investing in your name will mean that you are taxed at your marginal tax rate but you will have the freedom to draw down on these assets when you wish in order to fund your personal goals. Whilst on the other hand, investing through your superannuation (including self-managed super funds) or pensions may have better tax efficiency but will likely be more difficult to access due to preservation rules. Alternatively, it may be that investing through a family trust or your business may be more appropriate depending on your circumstances.
Overlay our market and economic views – different investment strategies are appropriate at different times because there are a multitude of factors that could affect your investments such as; Are markets efficient and accurately priced? This creates opportunities for active managers to exploit such inefficiencies. Or perhaps the opposite is true and there may be very little value an active manage can add over an indexed approach that has lower overall costs. Other factors can include currency, interest rates, inflation, political policy, technology just to name a few. This is to ensure that when we invest your funds it is under the most appropriate environment.
Apply the investment strategy – next we bring together all this information and put together your portfolio which may involve strategies like active management, value investing, index based investing, currency and portfolio hedging, applying volatility trigger points, overall strategic asset allocation, dynamic and strategic asset allocation guided by market regime indicators. How we bring everything together depends on the needs of each of your goals and current economic and market environments.
Monitor the investments and make decisions – we continually reassess your assets and decide to tilt the portfolio towards, or away from, certain sectors or asset classes to express a short term or mid-term view. For example, weaker performance in equity markets may mean that we may choose to hold more cash than normal in order to take advantage of any future investment opportunities.
Evaluate against your goals – lastly, are your investments delivering the outcomes needed to meet those goals we initially set out to achieve? Not everyone makes decisions based on the trade-off between risk and return. Many investors will require their investments to help them achieve a specific goal like providing an income stream for retirement, saving for a deposit for a home or providing a certain lifestyle. Whatever the goal may be it is import to continually reassess your portfolio to make sure it is delivering the outcomes in order to meet these goals.