Investment Philosophy
The principles that guide my advice.
1. Managing risk comes first.
- Investing consists of one thing: dealing with an uncertain future. Which means there is risk.
- Understand, recognise and control risk.
- What is risk? Don’t lose money over the long-term.
- The first step to growing your money is to protect it.
- Aim for a superior return which outweighs the risk taken to achieve the return.
2. Aim to beat inflation
- Inflation is an investor’s no. 1 enemy. The biggest destroyer of wealth.
Because it reduces your money’s purchasing power. - Aim for a return of Inflation plus 3 to 5% over the long-term.
That means a real return of 3 to 5%.
Know the return expectations of the various asset classes: shares, property, bonds and cash.
3. Invest for the long term. Be patient.
- Time is the most important gift you can give your investment.
It is scarce and precious. Therefore the best time to start is today. - Stay invested for at least 5 years. Preferably for 10, 20 years and longer.
- Patience is the investor’s most important quality.
- Compounding, which needs time, is the investor’s best friend:
re-invest returns to achieve further returns. Returns on returns on returns. - A longer term leads to a decrease in risk of holding shares and property.
4. Don’t put all your eggs in one basket
- Spread your money. Diversify.
Therefore I favour balanced funds. Also known as asset allocation funds.
Invest in various assets: shares, property, bonds and cash. Local and foreign. - Split between funds with different characteristics.
- Split between fund managers with different strenths and skills.
- The fund managers, funds and assets may unlock value at different times.
5. Control your emotions
- One of the most destructive forces. Don’t be your own worst enemy.
- Know thyself. Know your risk tolerance, your appetite for risk.
- Know and avoid peer pressure, mental laziness, greed and fear.
- Stay calm in times of chaos. Resist the temptation to do something.
6. Buy low. Sell high.
- Stock markets reflect human emotions and psychology. Mainly greed and fear.
- In the short term these behaviours cause a difference between share prices and values.
Which present opportunities. - I favour fund managers who focus their research and skills on determining the value of businesses.
Buy shares of these businesses at a discount to there value. - Wait until the share prices reach the business value. And sell at a profit.
My process
How I help you put these principles to work.
My aim is simple: to help you make an informed decision with confidence.
Reading about “seasoned” investment managers helps a lot!
Your story and needs
- Study your unique story, principles, history and personality profile.
- Discuss your needs. What’s your money for?
Risk
- Study your risk tolerance report. Discuss it with you.
- Use your FinaMetrica risk tolerance score.
- Find the level of investment risk that feels right for you.
- Use the comfort zone calculator of FinaMetrica.
- Growth assets include shares and property.
The funds
- Identify funds which have the % of Growth Assets compatible with your score.
- Carefully assess the quality of the funds.
- Study the research reports of Fundhouse.
- Consider the ratings of PlexCrown.
- Fundhouse and PlexCrown are leading Fund Research and Ratings Providers.
- Peruse the fund fact sheets.
- Study the characteristics of the funds. Use the Allan Gray fund research tool.
- Discuss your capacity for risk, the extent to which you can handle negative returns.
Tying it all together
- Advise you on a suitable product.
- Guide you towards your informed decision.
- Help you to implement my advice.
My purpose
- My aim is simple.
- To help you become a confident investor.
- One who understands risk, stays calm and stays invested.
My purpose
- My aim is simple.
- To help you become a confident investor.
- One who understands risk, stays calm and stays invested.
If you’re serious about long-term investing, let’s have a chat.
Book your free, 30-minute, no-obligation meeting to discuss your needs.
I’m ready to help you become a confident investor who stays calm and invested.
