Investment is the process of laying out money today, in order to get a return tomorrow. Our number one problem is that we don’t know what tomorrow will bring.

Our approach is to try and manage that risk of not knowing the future.

We do this by:

• not putting all our eggs in one basket

• Sticking to quality

• Knowing our time frame, and

• Trying to buy things for less than what they are worth, and selling for more than what they are worth

We diversify (don’t put all the eggs in one basket) so that when one of your assets zigs, another might zag. This gives your overall investment portfolio a smoother result that should be more in the middle, rather than the extreme of either everything doing very well or everything doing very badly.

By sticking to quality we mean sticking to investments that have very little chance of going bust. For example, we can invest in, say, a 2 year term deposit from a Bank, or lend money for 2 years to someone we’ve never heard of who pops up on a Facebook feed.

One is quality, one is not.

If you are 60 years old, and retiring, you have a long investing time frame.

If you are 60 years old, you are retiring, not your money. Your money has to keep working until the day you die, which might be 30 years away. You still need to be mindful of risk, but you can afford to, and should, have a decent exposure to good quality Shares, as you have a long enough time frame to allow you to receive good, bad and mediocre returns from sharemarkets over the years, and end up with a decent averaged out return.

Our final investment rule is that we try to buy things for what they are worth, or less if possible, and sell for more than what they are worth. In other words, we lean towards buying low, selling high.

We think this is a very important part of the Risk management process. Investment markets tend to move in cycles. Every now and then assets are cheap, and every now and again they are expensive. When they are cheap, we want more of them, and when they are expensive, we want less of them. We don’t take 100% bets - we just lean towards where we see value.

If you like the idea of earning relatively steady, consistent returns in retirement without having to worry too much about what the investment markets are doing day to day, please feel free to contact us. You won’t often have returns to boast to your friends about at weekend barbeques, but you should be able to sleep soundly at night.