MCG Wealth Management has a set of investment beliefs which help govern the way in which we manage portfolios:
- Risk is somewhat more predictable and manageable than return, especially over the longer term.
- Although risk is multidimensional the primary risk to be managed is material loss of capital.
- Returns are somewhat more predictable and manageable over longer horizons than over shorter horizons.
- Asset valuations drive expected returns over the long term but far less so over the short-medium term where sentiment can dominate.
- Some investments have high expected returns especially in the less efficient parts of the capital markets. Capturing them requires a high degree of skill and an acceptance of meaningful levels of risk.
- A focus on absolute rather than relative returns is fundamental to wealth management success.
- Portfolios can be crafted to provide ‘reasonable’ trade-offs between absolute returns and the risk of material loss. Generating such superior risk-adjusted returns requires high degrees of investment insight and skill.