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Investment Philosophy

Your long term wealth is our prime concern. We believe a global perspective on investment can reduce long-term deterioration of wealth. We generally manage ‘segregated’ investment portfolios of direct equities and direct fixed income as opposed to portfolios of collectives (funds, investment trusts, OIECs, etc). We also manage passive strategies using ETFs or similar. Because the accounts are segregated, as a client, you can see the details of each individual investment you hold.

Investment Brief

Equities

Our Fixed Income

Investment Philosophy

Buy/Sell Discipline

A Strong Sell Discipline

Natural Cash Accumulation is a Natural Risk Reduction Exercise

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Investment Brief

We aim to efficiently manage your investments regardless of market condition.

We are long-term investors. We try to assess the markets and invest to take advantage of long-term potential. We will attempt to shift the overall risk of the portfolio slowly higher and slowly lower within the risk parameters you have given us in order to maximise return for risk. As our perception of risk rises as reflected in the markets, we may raise cash levels to abnormal investment levels to buffer against what we may deem too much risk.

We hope that our clients will accept our honesty when we say that after all is said and done, we can not guarantee anything, but that one day no matter how well we do there will be a down day, week or year. We just hope that there will be many more up than down.

Equities

For the portion of your money that we manage in equities:

  • We are not index constrained.
  • We are not style constrained.
  • Within risk parameters we will invest in whatever works to make a return including raising cash to protect principal in difficult markets.
  • Notwithstanding, we do use a global index as a rough guide for benchmarking equity returns.
  • And, we are not hedge fund managers.

If we were forced to use a style moniker we would call ourselves relative value managers. (In other words, a manager that manages in a value-based style but only relative to the value of its peers or sector.)

On Fixed Income

If fixed income is included in a balanced portfolio, in order to properly diversify your portfolio for any portion of fixed income investments (such as bonds, gilts, or treasury’s), we may use all or a portion of collectives to do so. In other words, depending on market conditions, we may invest directly in fixed income or we may invest in funds, unit trusts, investment trusts, etc., (i.e. collectives) to facilitate fixed income exposure in investment. We believe it may be necessary to actively trade a fixed income portfolio and feel that the scale necessary to achieve good pricing, quality issues and liquidity may at times be better achieved through the use of collectives.  However, in best of conditions we will favour direct investment in fixed income.

Investment Philosophy

Regardless of asset class, we use fundamental analysis and very much like to buy one unit of assets at 50% perceived discount or at least a good discount to generally perceived value. However, if we feel that the market will pay much more for an asset that is already selling at much higher than the relative market price for other assets, we may feel inclined to buy it as it is perhaps cheap relative to where it might otherwise be.

For example, we may see a stock that traditional market watchers would categorise as a ‘growth’ stock trading at what we may deem is a substantial discount to its peers. We might be inclined to include it in your portfolio because it is a ‘relative value’, but not a ‘value’ stock according to traditionalists and style watchers.

Buy/Sell Discipline

Some of the following may be reasons why we invest in a security:

  • We often buy when others are selling. Occasionally, we may be considered contrarians.
  • We may not buy on an absolute low; and we may be late buying after a big trough, but we may buy more of the same on dips.
  • We like buying new positions when large revaluations have occurred (i.e., we are not afraid of market corrections).
  • Various investment themes may run in currents in portfolios – several stocks in the same industry or focus.

Overriding many investment factors is that each investment should have a reason to go up. Just because it is cheap does not mean someone else will want it. So, we generally like a ‘catalyst’ giving reason to think the asset may reasonably soon appreciate.

A Strong Sell Discipline

When we buy an investment we put our own valuation on the asset. There are several reasons we may sell an asset as follows:

  • We reach our target valuation.
  • There is a sudden jump in the price of the asset.
  • An unexplained drop in price.
  • The fundamentals of an asset change.
  • Another investment needs its place in the portfolio.

Natural Cash Accumulation is a Natural Risk Reduction Exercise

When it becomes hard to find opportunities that meet our buy criteria, we will often find that we are selling more than we normally would. Cash may naturally build up as a defence against what may be reaching a top of the market. In the past, we have found that this can be a nice way to take advantage of our affinity for market drops.

We are very personal, accessible, and hands on.  To learn more about how we manage your money, arrange a free consultation by phone or in person with one of our investment managers by ringing +44 (0)20 7929 5225.