What is your investment philosophy? 

We believe that a disciplined investment process is the key to long term success, a point we underscore in our upcoming book The Alternative Advantage. We do not claim we are smarter than other investment managers, but our discipled investment process is surely more sound and conflict-free.

To quote Warren Buffett, "to invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What is required is ... a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework".

WHAT WE BELIEVE

At Smart Alternatives, our disciplined min-max process is based on certain time-tested truths about investing which we have derived from academic and professional research over the past decade. This disciplined investment process inherently keeps both our and your all-too-natural emotions at bay.

Over the past decade, we have collected lots of hard evidence which confirms that only a few investment strategies truly work over longer periods of time. While the investment world is awash in scores of sexy strategies and thousands of flashy funds, most don't stand the test of time, especially not when the market cycle turns as it does every few years. We believe there is no such thing as a low risk yet high return investment which will thrive in all economic scenarios.

We believe the quintessential wealth management challenge is to artfully balance the often conflicting objectives of maximum risk-adjusted return, maximum resilience to economic cycles, minimum risk per unit of return, and last but not least, minimal cost of investing. 

WHAT OTHERS BELIEVE

The investment world is full of noise. Thousands of financial salespeople (although they are often labeled differently) offer so-called objective advice in person, on TV, in slick brochures and in some books too. In our humble opinion, there are too many big bankers and brokers out there who push make-a-quick-buck speculative schemes. Often these investments ideas are sold with glamorous appeal and are hard to resist. They might even be backed up with sophisticated-looking back-test charts and other performance illustrations to convince you to buy into them. In our extensive experience spanning dozens of high net worth clients and hundreds of investment products, they do work sometimes in the short-term... but in the medium to long term reality bites, i.e. they rarely deliver on their tall promises. An objective look at the hard evidence gathered by both professional and academic experts agrees. Why?

REALITY BITES

Why is it that only a few investment strategies truly work over time?

Because many investment products are designed to succeed in the current market cycle. However, the cycle turns every few years, and most advisers, forecasters and investors get caught out. Of course, at the point of sale, the seller of that investment idea convinces you that they will be able to get out before the cycle turns. Perhaps they sincerely yet wishfully believe it too. If you are investing with or without a broker or banker to help you, an honest review of your investment history since inception will likely result in the same conclusion.

As we have painfully learnt time and again, in 2008, 2000, 1998, 1994, 1991, 1987 etc., timing market cycles is very difficult, and most bankers and advisers fail to anticipate the turn. Every time, the business cycle turns from growth to recession, or when the market cycle turns from bull to bear, these speculative strategies which once appeared solid fail spectacularly, resulting in a big dent in your portfolio. We all hope that this time will be different and that we will exit before the correction or crash. But as the adage goes, "this time is different" are the four most expensive words in the English language. 

STEP-WISE APPROACH

With the Smart Alternative approach to investing, we do not pretend to forecast the future precisely, but we arm ourselves with the opinions of other forecasters and assess whether they skew the behavior of other  investors. Then we design portfolios that meet your goals but also weather through multiple market cycles and diverse economic scenarios. We focus on maximizing risk-adjusted return and resilience while concurrently minimizing cost in these "all weather" investment portfolios. The we select the best investment fund or equivalent product which minimizes your cost. The steps we follow:

  • Assess investor goals, requirements, risk tolerance and constraints.
  • Examine risk impact from plausible economic scenarios.
  • Balance the oft-conflicting objectives of return, resilience, risk and cost to design the portfolio.
  • Construct a diversified portfolio using equities, fixed income, commodities, REITs, etc.
  • Select the most effective investment instruments, deciding between traditional and alternatives.
  • Choose most suitable instruments between index funds, ETFs, mutual funds, alternatives.
  • Enhance portfolio with liquidity requirements and leverage as appropriate. 
  • Invest initial wealth. Rebalance, reevaluate, rejuvenate and report on portfolio continually.