Watson Moore believes that it can help navigate your wealth through the booms and busts and financial cycles that have occurred through generations. We believe that, contrary to what we were led to believe, there will be more financial bubbles to come, more booms and certainly more busts. By understanding that this is inevitable we can help eliminate some of the risks that our wealth will no doubt have to endure over our lifetimes.
Watson Moore has a very flexible approach to investing your money. We do not have to stick to rigid benchmarks, for instance we do not have to invest in Equities when they are falling, and we can be very quick to react to changes in economic circumstances. These are the reasons that we outperformed so strongly during the worst financial crisis of our lifetimes.
Investing money is what we enjoy and what we are good at. All the strategies and portfolios that we invest our clients into are the same portfolios that we invest our own, our families’ and our friends’ wealth into. If you want your wealth actively managed using tried and tested methods, then Watson Moore will be happy to assist.
Our Core Investment Values:
Using Trend Following to Minimise losses when assets are falling
If Equities fall 40% in a year like they did in 2008, and your portfolio consequently also falls 40%, there is a chance that you may sell or reduce your exposure to Equities at the bottom. Many investors fall into this trap and buy high and sell low.
If the same investor lost less than 20%, or did not lose anything then they are more likely to remain invested and benefit from the recovery. ‘Trend Following’ values the importance of minimising losses and through careful analysis of trends our portfolios will endeavour to minimise losses during the next asset class ‘crash’.
The core to any portfolio is ‘Diversification’, and our lower risk strategies simply attempt to “Own as much of the World” as possible. In order to achieve this we will invest in Bonds, Equities, Property and Alternative assets such as Gold. We do this in an “intelligent way”, where we have the ability to change the exposure within each asset class depending on the performance. For example, if inflation-linked bonds are outperforming in the Bond section then we will increase exposure.
Intelligent Fund Selection
When we populate client portfolios with actively managed funds, we are not solely looking at the past performance, but analysing the whole market place to try and select the ‘future winning funds’. This means that we look at lots of different criteria such as the risk they have taken, how much they fell during the bad times and how consistent their returns are. By analysing all these factors and more we believe that we have a much better chance of selecting funds that will consistently perform well in the future.
Using Academic Research to Beat the Benchmark
Academic research has shown that if you follow a systematic method for investing, you will significantly outperform against the benchmark. For example, research by the Cass Business School has shown that if you combine a number of ‘factor’ ETFs in the US market you can beat the S&P 500 by at least 1.5% per annum. One of the main factors we will use is momentum. Momentum is simply investing more money in those asset classes/regions that are demonstrating the strongest recent returns. Academic research has once again proved that if you follow this strategy then returns over the long run have been significantly higher than just by equal weighting a portfolio.
An Intelligent Oversight
By applying an intelligent but common sense approach to the processes behind building the portfolio, we attempt to protect your wealth by rigorously analysing each component part of the portfolio and making changes if part of it isn’t working. For example, in the diversified part of the portfolio, we will allocate more wealth to those asset classes that are performing the strongest and reduce exposure to those asset classes that are falling in value.
Past performance is used as a guide only. It is no guarantee of future returns. Your investment may go down as well as up, and you may not get back the full amount invested.
It is a regulatory requirement that we categorise our clients to identify the level of regulatory protection that they are entitled to. In providing investment services, we usually categorise our clients as a ‘retail client.’ As a retail client, the regulatory protections available are determined by this category and will be the highest available. Where we have categorised a client other than as a ‘retail client’, clients may request re-categorisation under a client category which benefits from a higher degree of protection. However, we reserve the right to agree to such a re-categorisation on a case-by-case basis, and where we agree to do so it does not necessarily mean that they will have a right of access to the Financial Ombudsman Service.