Financial planning brings the future to the present. We create and manage your portfolio based on what you want in life instead of reacting to the market and current events. The value of our relationship lies within your financial plan. Your portfolio is simply a function of it.
Financial markets reward long-term investors but often punish those who overtrade or make their decisions based on short term news or during times of market stress. Warren Buffett famously commented that “The stock market is designed to transfer money from the active to the patient”. And his business partner Charlie Munger concluded that ‘The big money is not in the buying or the selling, but in the waiting’.
We believe inflation is your future wealth’s biggest enemy. It can also be your best friend if you are invested in assets that benefit from rising prices like the great companies of the world. Whilst equities are less tangible than property, as a shareholder, you are a part-owner of real companies selling real things to consumers like you. We are all part of the stock market; the key is to be an owner and a customer.
In exchange for superior long-term returns, we must bear the cost of short-term price volatility. History being our guide, you should expect to experience significant falls every three to five years. This turbulence is always expected but only feared by those who don’t understand it. Declines are temporary; the advance is permanent.
Many people struggle to separate their emotions from their finances, as human nature can be a significant impediment to successful investing. We are often prone to making particularly poor investment decisions at times of heightened anxiety. This can result in considerable wealth destruction and missed opportunities. As Benjamin Graham said, ‘The investor’s chief problem, and even his worst enemy, is likely to be himself’.
Diversification is said to be 'the only free lunch in investing'. No one knows which asset classes will rise or fall in the short term. A diversified portfolio removes this guesswork by ensuring your portfolio can withstand any market movement.
Modern media competes for your attention with outrageous headlines and negative exaggerations. We don’t make investment decisions based on ‘breaking news’, but on sound market analysis and your lifestyle financial plan.
The world is uncertain, but there are countless reasons for optimism. Humanity is prospering and more peaceful than ever before. Technology is changing millions of lives for the better. Medicine cures diseases that were once untreatable. The pessimist will seek confirmation of their negative outlook and is likely to be a poor investor. The patient optimist anticipates growth and participates in it.
Sir John Templeton coined the phrase ‘the four most dangerous words in investing are “this time it’s different”.’ As investors, we never move from an uncertain period to a certain one. We simply move from one uncertainty to the next. The key takeaway is we must have faith in human ingenuity and perseverance and not crystallise losses during times of maximum pessimism.