A rich man is nothing but a poor man with money

– W C Fields

We do not outsource the management of the portfolios, which many adviser firms do, and this is why we are different. Paul done this since 2009, with George coming on board in 2011. Much of the learning has come from investing greats like Charlie Munger and Warren Buffett.

Our fundamental aim is to deliver positive returns of between 5% and 7% per year (after fees and charges) over the medium to long term. During these periods there may be some negative returns but what we try to do is minimise losses.

If funds are left within the portfolio even when markets are struggling, then they can still recover from poorer investing conditions. Money withdrawn at lower valuation points locks in losses and can be more difficult to recover from. There is no restriction to withdrawing funds as it belongs to clients, however it will be important to consider investment conditions at the time, as well as any tax liability.

We think we are different because:

  1. We share our portfolios publicly on our website
  2. We share notes from our fund manager meetings
  3. We do not follow the crowd with our investment decisions
  4. We have a strong performance track record since 2009 and a combined of over 20 years of experience

Sometimes not following the crowd can seem strange. Some examples include:

  1. In 2009 we decided against using bonds (debt) as an alternative to equity and have consistently used a mix of assets to great effect,
  2. In 2014 we launched our Ethical Portfolio (now our Positive Impact Range) way before the ESG movement
  3. For the last few years, we have had a higher allocation to Asia, China, and Emerging Markets because we believe in the long-term growth opportunities.

These are some of our investing principles that have been the cornerstone of our philosophy:

Act rationally

The market has a herd like mentality which produces distortions in price. It is not possible to achieve returns unless one acts rationally and differently from the herd.

It isn’t necessary to change investments or increasing / decreasing allocations to regions monthly just because everyone else is. This works on the basis that we think we know more than the market and to quote “To do as the majority are doing can logically only produce average returns.”

We change investments once a year in July irrespective of whether the markets are high or low.

Be patient

We share short term performance but believe the real focus is on the long-term performance. The changing of investments in July seems counter-intuitive but we are not trying to predict specific events or trends. We are trimming those assets that have done well and buying more of those that have done less well.

Most investors don’t buy more of those that are undervalued by the market, they buy those assets that are overvalued and therefore they miss out on opportunities for growth. It isn’t known when the majority will recognise this mistake, but they ultimately will!

Ignore forecasts

We spend a lot of time listening to the good and great, reading and studying the markets. This can be a rich source of information, and we are happy to share this.

What we know with certainty is that even with all this knowledge we do not know what will happen tomorrow or the next day. We know however, that whatever anyone says – they don’t either.

This is important when managing the portfolios, because if we listened to the forecasts, we would lose the discipline of managing the investments and we would be rebalancing constantly.

Be disciplined

Markets are cyclical (and occasionally hysterical!) The investment philosophy that has proven consistently successful is “be greedy when others are fearful and fearful when others are greedy”.

We have a process, and we have seen over time it works. It can feel uncomfortable when markets fall (2011, 2016, 2018 and 2020 are just some examples), but time and again patience and discipline have proven successful.

Understanding the economics

Any asset will be subject to outside influences, be it governmental, social or market. We will assimilate these factors into our analysis and recommendations.

We have a bias to Asia, Emerging Markets and China but we know this must counterbalanced because there are factors that mean that these regions can carry greater risk. In investing you must be a realist.

Be what we want to see

Our mission is to enhance our clients financial wellbeing using our research and experience. LWM is a partnership with our clients and our responsibility is to understand their needs and wishes and without exception to do what is most beneficial to achieve them.