At Old Mill we believe that investment decisions should be guided by the wealth of academic and empirical evidence available to us. Once reviewed, this evidence provides a number of clear indicators as to where we should focus our energies, to deliver a successful investment experience for our clients.
We define a successful experience as one where our clients can sleep soundly at night, have a strong chance of achieving their future lifestyle goals, and understand and believe in the investment journey they are taking. It is probably quite different to investment approaches that you may have experienced in the past.
In practical terms, this means that we will focus on structuring your investment portfolio in line with your attitude towards, and capacity for, investment risk. We create an equity-orientated mix of assets (such as developed and emerging market equities, and commercial property) that is highly diversified by security, geography and asset class. Where necessary, we balance that with a defensive mix of high-quality bonds (including gilts, corporate bonds and index-linked gilts).
Costs are an important consideration in investment management, as small differences in returns due to costs can have a major impact over the longer term, significantly affecting your future lifestyle choices.
From a financial perspective the evidence suggests that investment industry costs are high, particularly those related to active management (for example, where managers attempt to outsmart the market). We focus on minimising investment product and transactional costs (buying and selling) by using low-cost funds to deliver the bulk of the market returns necessary to build robust client portfolios.
From an emotional perspective, behavioural finance literature tells us that most investors have a number of psychological biases which drive them to make poor decisions, such as ‘buying high’ at the top of the market and ‘selling low’ at the bottom of the market – actions which can swiftly and needlessly destroy wealth. Our disciplined approach to the management of client portfolios, along with ongoing expectation management and education, helps to reduce the emotional costs of poor or badly timed decisions.
To chat to us about your plans, get in touch with us or make an appointment with one of our financial planners at one of our offices in Exeter, Wells, Chippenham and Yeovil.
