Clients are real people with real problems. I believe that success in investing is dependent on understanding that this is where theory and reality come together.
My investment perspective has been shaped over 25 years as a Chartered Financial Analyst, my early years in institutional money management, and the last 15 years working with individuals and families.
The principles that guide our approach:
- Stay focused on long-term returns. My clients’ number one goal is to get to their own finish line. Trying to exceed a certain index or other short-term benchmark is not the way to go - swinging for the fences generally increases the risk of striking out.
- Protect my clients on the downside. I believe that another way you win is by losing less. This is one of the most important things I do – understand what types of risk my clients are exposed to, what they can handle (emotionally and financially) and aim for less.
- Design a plan to fit both. Our investment plan needs to answer two questions: How big does the pot of $$ need to be to meet our goals? How do we get there with the least amount of risk?
- Remember that not all growth investors are the same. There’s a big difference between the intent and circumstances of a 70-year-old “growth” investor and a 35- year-old “growth” investor. Their investments and plan should reflect that difference.
- Individuals are not the same as institutional investors. Institutional investors have infinite lives, which means they can more easily ride out the ups and downs of the market, and they don’t have emotions. Individuals don’t have infinite lives and they certainly do have emotions.
When creating portfolios for clients, our process includes:
- Analysis of what the markets are telling us to determine what to take advantage of as well as what to avoid.
- Careful study of asset classes focusing on expected future returns, expected future volatility, and performance relative to each other.
- Discipline to stay within a defined risk-tolerance range while getting the most return possible.
- Identification of investment fund managers who consistently outperform, analyzing their results to determine whether returns are attributable to luck or skill.
- Selection of a combination of fund managers to achieve optimal asset allocation.
- Use of risk budgeting. If a holding exceeds our established risk budget, it’s time to sell it and move to cash if necessary.
- Most importantly, while there will always be ups and downs in the markets, our goal is to stay focused on our long-term objectives by taking the most efficient path with the least amount of risk. Some people may call that boring; we call it a strategy for success!