Our Investment Philosophy
An uncompromising commitment to focus on wealth creation over the long term is the foundation of the firm’s investment philosophy. Our overall objective is to help clients retire wealthy and retire earlier if they wish by searching for opportunities and developing strategies to improve personal wealth. We adopt an active but disciplined approach to purchasing high quality investments and our relatively conservative investment philosophy focuses on the preservation of capital first. We never forget that we are managing other people’s money and this reinforces our strong aversion to loss. When it comes to investment, the world’s greatest investor, Warren Buffett was quoted as saying: Rule 1 – Never lose money; Rule 2 – Never forget Rule 1.
Today’s financial landscape is changing at a rapid rate with the introduction of more and more investment products that are convoluted and difficult to understand. We have a firm belief that what’s too complex to understand is too complex to invest in and thus favour the simple over the complex. Prior to recommending any investment strategy or product to our clients, we ask ourselves is there a more transparent, cost-effective, tax-effective, lower risk and liquid way of achieving the desired outcome.
At Tristone Private Wealth the following factors are integral to our investment philosophy of sensibly growing wealth over the long term:
An uncompromising commitment to focus on wealth creation over the long term is the foundation of the firm’s investment philosophy. Our overall objective is to help clients retire wealthy and retire earlier if they wish by searching for opportunities and developing strategies to improve personal wealth. We adopt an active but disciplined approach to purchasing high quality investments and our relatively conservative investment philosophy focuses on the preservation of capital first. We never forget that we are managing other people’s money and this reinforces our strong aversion to loss. When it comes to investment, the world’s greatest investor, Warren Buffett was quoted as saying: Rule 1 – Never lose money; Rule 2 – Never forget Rule 1.
Today’s financial landscape is changing at a rapid rate with the introduction of more and more investment products that are convoluted and difficult to understand. We have a firm belief that what’s too complex to understand is too complex to invest in and thus favour the simple over the complex. Prior to recommending any investment strategy or product to our clients, we ask ourselves is there a more transparent, cost-effective, tax-effective, lower risk and liquid way of achieving the desired outcome.
At Tristone Private Wealth the following factors are integral to our investment philosophy of sensibly growing wealth over the long term:
- A strong aversion to loss. The primary investment objective should aim to minimise the risk of permanent capital loss and generate investment returns that outpace inflation over the long term.
- Rational approach. Investors should eliminate emotion as much as possible from the decision making process and resist being distracted by potentially irrelevant media or analyst market commentary. The great temptation is to chase investments that don’t make the grade, in the hope that one doesn’t miss out. However, we believe to be successful in investing you need to stay within the bounds of what you understand (your circle of competence). Once you stray off course it is much harder to remain in control. Investors should also maintain realistic expectations about potential returns and spend more time preparing than predicting making sure their portfolio is positioned to cope with a range of outcomes.
- Appropriate portfolio construction. Portfolios need to be constructed in a manner that is consistent with a client’s overall risk profile to contain the appropriate diversification across the range of asset classes. Research demonstrates that strategic asset allocation accounts for over 80% of investment returns so this decision is crucial to achieving desired returns.
- Tax-effective and cost-effective investment solutions. Ultimately, investment performance should be assessed on a post-tax, post-fee basis. Given the range of investment products available to investors, we believe that all potential investment opportunities should be compared to the post-fee and post-tax performance available from an index fund or leaving your money in a high yielding cash investment.
- Value liquidity. One of the lessons of Global Financial Crisis has been to always place a high value on the liquidity of an investment i.e. the ease and speed with which you can access your money should it be required.
We believe that a great adviser keeps one eye on the present and one eye on the future so we work closely with our clients to simultaneously deliver immediate results and prepare them for the future by providing a well informed and educated view of what potentially lies around the corner in an ever- changing landscape.
What you can expect from us
- A thorough assessment of your goals and risk profile
- Personalised solutions tailored to your needs
- Robust analysis to evaluate potential investments
- Regular reviews of your portfolio in response to changes in the economic outlook and your goals
- Importantly, we follow our own advice
What you should not expect from us
- False promises about the future, market timing or investment returns
- Impulse reactions and constant changes based upon media or analyst commentary (“market noise”)
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