CARE INVESTMENT PHILOSOPHY
Investing is a powerful wealth creation tool. Whether you are a seasoned investor looking to grow greater wealth or are interested in starting an investment portfolio, the many products available in the marketplace, diverse investment options and complex tax implications, makes managing your own portfolio a challenging affair and an area best left managed by the experts.
It is not necessary to have a lot of money to get started, however you will need an understanding of the extensive range of investments available to help you achieve your goals and gain greater wealth.
Your investments will be selected according to your individual needs, risk profile and financial goals, with daily portfolio management by our qualified and experienced investment committee. We’ll also take care of all your administrative needs and work in collaboration with accountants, solicitors and other advisers, to reduce costs and maximise tax advantages for you and your family.
Some of the investment options we provide include:
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Direct shares
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Managed Funds
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ETF's (Exchange Traded Funds)
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SMA (Separately Managed Accounts)
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Property
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Cash
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Bonds
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Fixed Interest
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Saving Strategies
Our CARE Investment Philosophy is made up of four key components, which combine to form the foundation of your investment portfolio and the first step on your pathway to wealth.
Discover our CARE Investment Philosophy and how this makes us stand apart from other financial advice practices.
What is the CARE Investment Philosophy?
Fundamental to the CARE Investment Philosophy is what is known as the DALBAR Study. The original DALBAR Study was conducted between 1980 to 2000 in the USA on the top 500 US listed companies. The study found that the average return over that 20 year time period for the 500 companies was a 12% return.
Do you know what the return was for investors over the same period? It was around 4% over the same 20 year period! That’s a poor average investor return. The number one reason for the 8% difference was bad investor behaviour.
See the DALBAR emotional rollercoaster schematic below.
The CARE Investment Philosophy believes that 50% of your returns are made up by your investment behaviour. 45% of your return is to do with asset allocation and the remaining 5% is timing and selection.
The traditional investor would contest this and say the investor return equation is 90% asset allocation and 10% timing and selection and has nothing to do with investor behaviour.
However, based upon the DALBAR Study we do know that 50% of returns are based on investor behaviour, which has a critical impact on your returns. See the impact of investor behaviour in the graph pictured.
The DALBAR Study found that the average holding period by investors who said they were investing for the long term was just over 3 years! Those investors made bad short term decisions based upon events happening in the world at the time. That’s why the CARE Investment Philosophy was designed – to stop investors from blowing up money, to prevent bad investment decisions being made in down markets and to stop the dangerous DALBAR cycle that destroys the wealth our clients have worked so hard to create. Are you interested in an excellent investment philosophy that protects your investment future?
C
CORE INVESTMENTS
The “C” in CARE stands for “Core” investments. The Core of a CARE portfolio is made up of a range of Exchange Traded Funds (commonly called ETF’s) and fixed interest fund managers that are single sector, single manager securities and funds that are constructed to be invested according to your risk profile. Your Core investments, together with your risk profile are a strategic mix of Cash, Fixed Interest, Property, Australian shares and bonds, and overseas shares and bonds.
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ACTIVE INVESTMENTS
The “A” in CARE stands for “Active” investments. This is a tactical blend of ETF investments which includes Australian Shares, Global Shares, Emerging Market shares, Global Small Companies and Gold. The Active component within the portfolio is designed to take advantage of long term market themes and attempt to smooth your total portfolio return by systematically adjusting allocation to undervalued or overvalued asset classes.
R
RESERVES (Used when income is required from your portfolio)
The “R” in CARE stands for “Reserves”. This is a very important part of the overall investment strategy that looks to benefit you in two ways. The first is that it provides a steady income stream with a very low risk to capital. The second benefit is that we recognise that volatility and capital loss have a probability of occurring in the short term. By allowing enough time for investment in shares and property to grow, the risk of you having to sell assets in times where markets are declining is mitigated. Reserves are an important component of CARE where we set aside up to four years of any income requirements, especially for retirees, because in volatile markets if you don’t have enough Reserves you may have to sell assets to provide sufficient income, or worse: you may panic and sell. The Reserve is a good buffer for peace of mind and to assist you with the cash flow you need during these investment downturns.
E
ENHANCED RETURNS
Lastly, the ”E” in CARE stands for “Enhanced”. This portfolio is made up of Australian and overseas shares, held either directly or through managed funds or ETF’s. Listed Australian shares will predominantly be selected from the largest 100 Companies on the Australian Securities Exchange (ASX). These companies generally produce good dividends for our clients. Investors also have the option of investing in a portfolio of international shares managed by a specialist manager or via an exchange traded fund (ETF). The Enhanced looks to deliver above market returns or “Alpha” as it is called in investment circles.
Book an introductory call to learn more
MEET THE CARE INVESTMENT COMMITTEE
We have industry experts on the Investment Committee overseeing the CARE Investment Philosophy and liaising with our high quality Australian investment provider partners. Their primary role is to both protect and grow your wealth.
Emmanuel Calligeris
BEc MBus (Finance)
Emmanuel is Chairman of the CARE Investment Committee. Emmanuel holds a degree in economics and previously had 20 years’ experience as Chief Investment Officer for OnePath Investments (the investment arm of ANZ Bank) and was responsible for $13 Billion of funds under management.
Grahame Evans
GAICD DipSM MBA
Grahame is the Risk and Compliance member of the CARE Investment Committee. Grahame brings over 35 years of financial service industry experience.
Dr Mark Brimble
BCom(Hons) PhD CPA FFin
Mark is an independent member of the CARE Investment Committee. Mark holds a doctorate in capital markets and is keenly interested in investor behaviour.
Rob McGregor
SIA (Aff) ADFP
Rob was a founder of GPS Wealth, developed the CARE Investment Philosophy over the last 15 years and successfully managed $100m in clients’ funds during the GFC.
