Investment
WORDS
Arthur Molloy, Head of Private Wealth, Creechurch Private Wealth
Investments and wellington boots
How to invest - a magic formula? Sage of Omaha, the holy grail of investing is finding a quantitative and mechanical methodology based on a simple set of screening criteria that anybody can follow.
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very investor wants to beat the stock market, but most of us are all too aware that this is something easier said than done.
Becoming a superior value investor like Warren Buffett is probably the best and most sustainable way to outperform index investing, but Buffett’s version of value investing requires years of experience and expertise in fundamental analysis – there’s no secret formula. Outside of the kind of investment prowess displayed by the
There have been lots of promises delivered via a plethora of readily available strategies and vehicles, but all too often those who have taken a bite are left bemused with mundane returns from assets with little or no human factor. Their use also goes against the grain of what we naturally want to use to navigate this increasingly, unnecessarily complex environment. Clever marketing claiming to have found the holy grail of investments adds to this confusion.
Keeping it simple At Creechurch we like to keep things simple. The creation of optimal investment portfolios can only flow through the application of a robust framework, which while may not automatically throw options away, does at a very early stage, identify a universe from which optimal investment portfolios can be populated in a sensible risk adjusted manner. The results yield relative certainty and avoid the onset of surprises as the investment landscape evolves and global financial markets continue to suffer through periods of volatility that come what may. As the thirty year bull market for bonds rapidly
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veers toward a fork in the road, we prefer to take some of those profit laden chips away and reorientate to assets providing yield and exposure to real world activities and assets. They deliver the negative correlation so cherished and simultaneously (on an individual basis) produce the kind of strong long-term returns that those risking capital should rightly expect.
And finally… As a father of three perhaps I’ll now take to donning my Hunters more often (coupled with an alternative slant to my pension plan, I may avail of the kind of luck bestowed upon Deborah Kendall, should it come to it!). Kendall, 33, was hit by lightning as she put her two-year-old daughter in her car but escaped with only pins and needles and cramp. The mother, who was struck by several million volts, told how doctors who treated her said it may have been because she was wearing her husband’s rubbersoled wellies at the time. Mrs Kendall put her wellies on before stepping outside with an umbrella to shelter husband David, 36, as he carried their two-year-old daughter to their car. She said: “We needed to get going, and it was absolutely pouring with rain. I only had little pumps on, so David said I should put his wellies on as my feet would get soaked otherwise”.