Argentum Private Wealth specialises in investment management and planning for whichever objective you have – retirement planning, education planning, succession planning, or general investments from surplus cash. All of these plans and objectives require investing your money in a sensible and risk-adjusted strategy so that it can grow, and you can achieve your goals.
Saving regularly, e.g. on a monthly basis, is a good way to build capital and often the preferred method of choice for those long-term objectives, such as retirement. But it isn’t enough just to save, as inflation over the long-term will erode the purchasing power of your cash savings. Investing gives your money the chance to grow and, depending on your risk profile, the chance to keep pace with or outstrip inflation. Investing also means you could achieve your targets sooner.
Investing on a monthly basis can be the easiest way to manage your cashflow and means you can benefit from ‘dollar cost averaging’. Dollar cost averaging helps you benefit from market fluctuations. Whether the market is going up or down, you are investing the same amount each month, but the number of units or shares in a mutual fund or ETF which you purchase with that amount will vary, depending on the unit or share price at the time.
As the market fluctuates, you will buy more units at lower prices and fewer units at higher prices. The average price at which you buy will likely be favourable compared to trying to time your entry into the market. Market downturns reduce your average cost per unit, and as the market grows over the long-term you have more units available growing for you and boosting your returns.
Dollar cost averaging has proven to be a successful investment strategy over time, particularly for those new to investing.
For those who have already accumulated capital and have surplus cash in the bank, lump sum investing is a strategy which we would recommend. In the current climate of low interest rates, cash built up in the bank suffers from the eroding effects of inflation. It is rare nowadays to find savings accounts with an interest rate anywhere near to the rate of inflation. To protect your cash against inflation, lump sum investing can be a powerful tool.
Timing the market is impossible; it is time in the market that counts. What do we mean by this? Rather than sitting on cash waiting for the “perfect time” to enter the market, it is better to invest early and adopt a long-term ‘buy-and-hold’ strategy. Research has shown that investment returns in the S&P 500 (the largest US stock index) between 1950 and 2019 would have been remarkably similar had you invested on any random day or at an all time high. In fact, between January 1928 and October 2020, there was a less than 1% difference in rolling 12-month average return on the S&P 500 if you invested on any random day versus investing at an all-time high.
What does this mean? Investing early is the best way to achieve long-term returns, as waiting to invest affects your ability to achieve compounding returns. Dollar cost averaging can be incorporated into your lump sum strategy: either by following up with regular savings or investing further when there is a market correction.
Time in the market is important, and our Wealth Advisers have experience of market downturns and will be there to explain the long-term benefits of remaining invested and taking advantage of the opportunities which that presents.
All of our clients complete a risk profile questionnaire, which assesses your comfort with short-term fluctuations in the value of your investments. Your risk profile determines the asset allocation of your investment strategy. The higher your appetite for risk, the more of your portfolio will be allocated towards equities; the lower your appetite for risk, the more of your portfolio will be allocated towards fixed income or defensive assets.
Risk profiling is one of the most important aspects of investing, as it allows our Wealth Adviser to truly understand your views and expectations for your investments.
Start early, stay calm, and hold for the long-term.
These three tenets are important for all of our clients to remember. The earlier you start, the easier it is to achieve your goals and the more you can benefit from compounding returns. The calmer you remain, the less chance there is of your making a knee-jerk reaction, whether it’s getting over-excited after exceptional short-term performance or starting to panic if we see a market correction. Holding for the long-term has been shown to achieve better returns than attempting to time the market with buying low and selling high – the compounding effect is achieved through remaining invested to the end of your investment time horizon.
We believe in a diversified, multi-asset portfolio. It is important not to have all your eggs in one basket and spread the range of your investment portfolio. Our Investment Committee have created Model Portfolios which are diversified across different asset classes, geographical regions, and industry sectors, in order to achieve this.
We believe our risk-rated Model Portfolios are suitable for all investors. Containing a blend of low-cost, passive index trackers, and actively managed funds achieving strong net returns, our portfolios offer a cost-effective investment strategy with the potential for strong returns.
We also recognise that some of our clients are sophisticated investors with prior experience, or have a particular ethical or religious focus they wish to bring to their portfolio. In these cases, we are happy to accommodate clients with bespoke investment needs and provide them with an appropriate portfolio.
ESG – Environmental, Social, and Governance – investing is becoming more and more popular as investors, both private and institutional, wish to see their investments have a more positive impact on the world. ESG investments can range from making a positive impact on climate change, to driving for social change and workers’ rights, to diversity and inclusion in the workplace. It is a wide and varied area of investing, and new investment propositions are becoming available all the time.
Our Investment Committee has put together risk rated ESG Model Portfolios, for those investors who believe strongly in this approach, which aim to incorporate most of the aspects of the ESG spectrum. We again recognise there may be more need for a bespoke approach to ESG investment, and as such are happy to work with those clients that have specific ESG requirements.
Do you have an existing portfolio, either set up back home or started since you moved overseas? If so, it may be worth a second opinion. We provide a full review service of your portfolio, informing you of all relevant costs and fees, the investment performance, the structure of your investment vehicle etc. If we believe we can do better, we shall inform you and explain how. There is no obligation to take up our services after we have completed our review.
Contact us today for a full, no-obligation portfolio review.
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