Investment Philosophy and Investment Style

Our Investment Philosophy and Investment Style reflects our own Primary Investment Objective and Investment Criteria, as well as our own Investment Risk Tolerance and Investment Personality.

We seek alignment between all of these areas to give us a strong strategic focus and high-conviction investment approach.

With this in mind, fundamentally, we call ourselves “value investors”.

We try and purchase assets below what we believe is their true value, while keeping in mind what we think they could be worth at some point in the future.

We then hold on to them for as long as possible, or until we think they are over-priced or are no longer an attractive investment proposition, or they no longer meet our investment objectives or criteria.

Traditionally, value investing as an investment philosophy and investment style has been associated with sharemarket investing and famous investors such as Benjamin Graham and Warren Buffett.

We believe that all sensible, logical and effective investing is based on this simple, yet powerful and timeless approach.

However, we extend its application from the sharemarket to include both residential property and commercial property.

These are the three major growth assets that we invest in (with bonds being used for further diversification and risk-reduction).

We have a “vertically-integrated” philosophy of value investing that is applied across these three different asset classes.

We don’t believe one asset class is necessarily better than another, but appreciate that each has their own pros and cons depending on a person’s circumstances, financial position, risk tolerance and personality.

We consider each asset class on its merits and on its usefulness in helping to achieve our primary objective, ie. to develop a passive income stream from passive investments.

We encourage people to move outside their investing comfort zones, and consider learning about each of these asset classes and how they may be useful for them now or in the future.

Our approach has been developed, adapted and tailored to passive investors that seek to develop a passive income stream from passive investments, and as such is both practical and easy to understand, implement and maintain.

Our approach is to take a relatively more passive approach to investments in more efficient and more liquid markets eg. listed shares, and a relatively more active approach to investments in less efficient and more illiquid markets, eg. private businesses.

With residential property and commercial property, our overall approach is relatively passive, but allows scope for active “value-adding” through future renovation or development.

Our approach uses more leverage earlier on in one’s investment life-cycle, where one has greater capacity and tolerance for risk, and with assets that are relatively safer to leverage in.

Our approach allocates more time, effort and money to areas where one has greater skill, expertise or capability.

Our approach can be described by a number of different “style tilts”, which we will discuss in more detail as this website develops:

Focus Investing
Value Investing
Life-Cycle Investing
Outcome-Orientated Investing
Strategic Asset Allocation
Tactical Asset Allocation
The Yale/Swensen Investing Model
Low-Volatility Investing
Smart Beta Investing
Factor Investing
Thematic Investing

Furthermore, we are not constrained, biased or influenced by training in a particular field or discipline eg. real estate, stockbroking, finance, investment banking or accounting etc..

We are independent thinkers, and are not constrained by academic theory or industry norms.

We look through and outside the box to consider what really works in investing, why it works and how to put it into practice.

Our insights are backed up by real investing experience, not just theory or talk.


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