A Better Way…
According to Warren Buffett, the top 2 investing rules are…
Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.
I believe that the most important aspect of financial planning is having an investment approach that protects you from large permanent losses and still gives you an opportunity to make money over the long-term.
Our goal at GFIN is to provide investors an opportunity to participate in most of the upside of markets while being protected from much of the downside. We will not catch all of the upside all of the time, nor we will not miss all of the downside, however by mitigating risk the long-term equation tends to work out well in our opinion.
For over three decades, most financial people have managed assets using a “strategic” asset allocation approach based upon Modern Portfolio Theory. That method uses historical asset class returns to build a mostly static portfolio based upon past performance. In effect, asset management that aims to hug a benchmark limits upside performance and does absolutely nothing to limit draw down of a managed account’s value.
Not only does the strategic asset allocation approach conflict with the industry disclaimer “past performance is not indicative of future results,” but it also fails to take into account the rapidly moving intertwined computerised markets of today. The real problem is that during correlated market downturns — meaning when many asset classes fall in unison — there is little benefit from the type of “diversification” that most investment people recommend.
My thesis for funds management is that capital flows around the globe to the markets and countries that are expected to provide the highest return, adjusted to risk of course. So this begins with movement among currencies, migrating down to bond markets, commodities and equity markets of the chosen country.
“Get the US Dollar right, you tend to get a lot of other things right.”
The primary premise or investment philosophy of the Barwon Investment Program is that if we get the US dollar right, we will tend to get a lot of other things right. Capital flows around the world at an increasing speed, therefore trends can end almost before they begin!
The Barwon Investment Program utilises multiple systematic, mechanical and precise trading models that have performed successfully over time. This investment approach has shown its ability to capture the big capital flow trends that occur in many investment assets. Previously used privately, GFIN is now offering this approach to its clients.