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Investment principles

Through our client profiling process we agree your investment objectives and time frame, and then decide on the most appropriate investment solution. This initial recommendation is then reviewed regularly and can be adjusted to ensure your investment portfolio continues to meet your changing needs and circumstances. Our investment recommendations all adhere to the following principles:

Asset allocation is an important driver of returns

Research published over the last two decades has concluded that asset allocation is the major driver of returns for the investor. We define five major asset classes: cash, bonds, property, equities and alternative investments. The latter asset class includes commodities.

Diversification can reduce risk

By combining a range of assets with different risk and return characteristics, we seek to maximise the potential return of our investment strategies for a given level of risk. The increasingly complex array of financial vehicles and strategies available means considerable skill and expertise is needed in order to deliver attractive 'risk-adjusted' returns.

Risks need to be properly understood

Risk management is key to portfolio construction and it is important to consider the range of risks faced. In addition to volatility, which looks at historical price movements and short-term falls in the value of your portfolio, probably the most important risk to manage is shortfall risk - the possibility your portfolio will not achieve your wealth objective. Our investment team will regularly review the risks created by, for example, volatility, liquidity, inflation, interest rate movements and geopolitical events, to ensure your agreed risk and reward balance is maintained and your investment achieves your stated objectives. As a general rule, the greater the level of risk you are prepared to accept, the higher the potential returns can be.

Investment is for the long term

Investments should be made with an appropriate time frame in mind, and measured over a similar appropriate period to ensure a long-term view for your investment and reduce any emotional response to short-term volatility.

Value investing and minimising cost

We believe the price you pay for your assets is an important determinant of future returns. Minimising costs is also vitally important as the return on your investments will be adversely affected by the fees, expenses and taxes that are deducted. Net investment returns represent economic reality and are what investors should always focus on.