Money management is at the crossroads of art and science.
Investing necessitates a delicate balance of discipline, knowledge, and intuition, as markets are, in essence, a socioeconomic ecosystem expressing collective expectations – sometimes correctly, and sometimes not. Mulland Fraser’s investment strategy for wealth management is based on accepting today’s realities while also recognizing the massive changes that are transforming the world around us. Traditional asset allocation has become a relic of the past in an investment environment increasingly driven by global politics and the longer-term trends towards sustainable energy and digitalization. Patience will be required to ride out the ensuing volatility.
- Portfolio construction is crucial: we put together essential building blocks to create a meaningful portfolio.
- Strategic asset allocation decisions must be appropriate and sustainable.
- While we eschew market timing, taking calculated risks is necessary for capital growth.
- Remain fully invested as much as possible.
- One’s investment horizon plays a crucial role in determining an optimum investment strategy.
- We encourage clients to focus on long-term objectives.
Basic Investment Principles
- Stocks represent businesses. If you know what a business is worth, market fluctuations are your ally.
- Make the market your servant, not your master. We thoroughly research a stock’s value, enabling us to calmly benefit from price fluctuations.
- Stocks eventually revert to fair value, either higher or lower. The market is the sum of all information, known and not yet known.
- Fear inflation and loss of capital, not volatility. Fundamental research highlights the difference between stock prices and business valuations.
- We don’t trade – we invest. Have a long-term time horizon. Investors who do so have a competitive advantage in financial markets.
- Factor in room for error. Our research models build in worst-case scenarios into our valuations. We always price in a margin of safety for unexpected events.