Our Process

Our Process

The vital first step in our process is to formalise our clients’ goals into a set of future financial objectives. These objectives may be simple – ‘make a return of X’ or ‘beat inflation’ – or complex, incorporating long-term retirement spending, school fees, family and philanthropic giving and other aspirations. The common thread is that they show, with mathematical clarity, what the portfolio is supposed to achieve.

The second step is to decide how best to meet these goals. It is impossible to eliminate uncertainty from the practice of investing: one is always dealing with probabilities. We look at a range of possible portfolios and use computer models to establish, for each one, the probability that it would meet the goals, recommending a portfolio that performs well in this analysis. The purpose of this process is to face up to, and account for, the unavoidable uncertainty of financial markets, in a way that is tailored to each individual client.

Of course, to paraphrase Helmuth von Moltke, no plan survives contact with reality. But military commanders still make plans, and investors should do so as well. The crucial thing is to adapt both the plan and one’s tactics as the situation changes. Adaptation is the third step in our process. At our regular reviews, we will reassess the probabilty of meeting your goals, taking account of changes in your circumstances and aspirations and of movements in the financial markets. In that way we can identify any risks to your plans many years before they might become a problem, and provide genuine reassurance when things are on-track.

It is a simple fact that investment involves risk and we see no point in pretending otherwise. Our approach is to build a portfolio to meet a plan, and regularly reassess both plan and portfolio in the light of changing circumstances. We cannot claim to know what is going to happen, but we can use sensible analysis to get to grips with uncertainty and build portfolios that have a good chance of doing what they are supposed to do.

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