OUR APPROACH BOILS DOWN TO 8 PILLARS:
THERE ARE ONLY TWO TYPES OF ASSETS; WITH RISK AND WITHOUT RISK
CASH SHOULD ALWAYS BE THE DEFAULT INVESTMENT AND RISK ONLY TAKEN WHERE GROWTH IS REQUIRED
TRANSPARENCY IS KING, KNOW WHAT YOU ARE HOLDING AND WHAT IS AT RISK
HOLDING THE SAME ALLOCATION TO GROWTH ASSETS ACROSS THE CYCLE IS NOT APPROPRIATE
KEEP FEES TO A MINIMUM, BUT DON’T AVOID THEM ALTOGETHER; GOOD ADVICE COMES AT A COST
EVERY INVESTMENT MUST HAVE A PURPOSE AND EXIT STRATEGY
NEVER CHASE THE HOTTEST TREND; BE UNCONVENTIONAL
GROWTH IS AS VALUABLE AS INCOME.
INVESTING BY WATTLE PARTNERS
Whilst the manner in which we uncover, identify and analyse investment ideas is complex, our overriding philosophy is straightforward.
History has shown that investing into businesses (i.e. shares) provides the greatest rewards over the long-term. We understand that a successful financial plan requires investment in capital markets over the long-term. We know that short-term, highly active trading adds little value and that outstanding returns come from the benefits of compounding; or maintaining your exposure to markets over the long-term.
We believe that simply investing into those companies paying the highest dividends will result in underperformance, so we search all over of the world and in all asset classes, both traditional and alternative, for investment opportunities. We seek to identify investments trading at a discount to their fair value and which offer the potential to grow earnings in a changing economic environment.
We have a preference to invest directly into shares and other asset markets, but believe managed funds can add substantial value where their strategy is focused to an individual sector. We appreciate the value and cost savings that popular index and exchange traded funds (ETF’s) can provide, but we do not believe today’s environment is a suitable time for these strategies.
DYNAMIC ASSET ALLOCATION
We do not subscribe to the passive, static asset allocation approach of our competitors.
We believe it is common-sense that your portfolio should be adjusted for both your changing attitude to risk, as your life changes, as well as the prevailing valuations of assets across the globe. The ‘traditional’ approach seems to ignore this logic to simplify the process for the advisory industry. There is no wonder this approach has seen investors greatly underperform expectations and take substantially more risk than required over the last 10, 20 and 30 years.
We aim to be dynamic rather than static in everything we do, but particularly in managing your portfolio. We implement this by:
Determining an appropriate allocation to Capital Stable assets for you specifically
Regularly adjusting our views on the appropriate level of Risk asset exposure
Increasing or decreasing your Capital Stable allocation as conditions change
Increasing or decreasing your allocation between our various Risk Bucket’s as conditions change
We refuse to pigeon hole our clients into ‘portfolios’ or individual investments based on the ‘conventional’ wisdom of the industry. We seek to understand the characteristics and influences on the investments we are considering and allocating them appropriately. For this reason, we believe investments should have one of four purposes:
To provide an income – The Income Bucket;
To offer substantial future value – The Value Bucket;
To generate capital growth over the long-term – The Thematic or Growth Bucket;
To provide a hedge against poor markets or unexpected events – The Targeted Return Bucket.
Above all, at Wattle Partners, we seek to question the conventional wisdom, or the ‘herd’ and to be unconventional.
We know that following the herd leads to below average returns and we believe investors should be seeking absolute returns that allow them to meet their goals, rather than returns relative to an index.
More detailed information and the background to our approach can be found in the below White Papers:
Investment Philosophy – From IPS
Dynamic & Active Asset Allocation – From IPS
Our research providers