Managing Portfolios

Managing Portfolios

Investment Philosophy

At Cardale we apply a common sense approach to managing the money you trust us to invest. Our ultimate goal is to help you preserve and grow real capital value over the medium/long term, together with the income generated thereon.

Following an in depth discussion we will structure a portfolio that best meets your stated investment objectives and by understanding your personal circumstances and attitude towards risk, we will formulate a mix of asset classes that seeks to meet your expectations. We believe the ability to fare well in any economic environment is crucial, and that a sound, diversified portfolio represents the most successful strategic approach in attempting to accomplish this. As a result, we provide all our clients with the ability to diversify their portfolio across several asset classes.

It is our business philosophy that all clients are individuals, regardless of the amount of capital they have at their disposal, and should be treated as such.

Creating Your Portfolio

At the heart of our approach is creating an investment portfolio that best suits you as an individual. The financial world today is complex and frequently turbulent, as markets are buffeted by unpredictable world events. At Cardale we explain our strategies and investment choices in plain and simple terms, in order to ensure that you understand the recommendations we make.

Our approach is structured but also flexible. We will discuss asset class selection, outline the rationale behind choosing certain geographic areas and explain our preference for particular industry sectors. We do all this to create a real partnership of understanding before we make a start on the underlying stock selection process.

We can then use our independence of thought and extensive experience to act decisively in whatever way we judge to be in the best interests of our clients.

Portfolio asset allocation is the key driver of investment performance and the combination of asset classes within each portfolio is derived primarily from the client's investment time horizon, attitude to risk, investment objective and tax status. Once these elements have been considered we will recommend a portfolio asset allocation that we believe best meets the client's requirements and expectations.

Measuring Performance

While many money managers will benchmark their performance against that of the major stock market indices, it is our experience that the vast majority of private investors and trustees are trying to generate a positive return on their capital.

As a firm we are benchmark aware but not benchmark driven. We do not restrict ourselves to market weightings and we are not afraid to hold significant amounts of cash in portfolios for a length of time.

If we believe it is in a client's best interest to be underweight or overweight in any particular asset class or industry group, then we will act to adjust the content of their investment portfolio accordingly.

Our Investment Process

The effectiveness of our bespoke service is dependent on the quality of our communications with you. The more we understand individual circumstances and requirements, the better equipped we are to assist in trying to achieve your investment objectives. That is why we appoint a personal investment manager to each account, to ensure that the person responsible for the day-to-day management of the portfolio is fully informed of individual circumstances, which may change from time to time.

Selecting appropriate investment opportunities requires time, judgement and access to quality research. As an independent firm with our own in-house analysis capability, we can do this efficiently and objectively.

At the core of our investment approach is our 'top down' look at the economy and financial world. After looking at the 'big picture' we analyse the various industrial sectors in order to select those which we believe will benefit most from the prevailing economic conditions. We then use a rigorous screening technique based on strict criteria, to identify potential investment opportunities. Following this we perform an in depth fundamental analysis based on business quality, balance sheet strength, cash flow and growth potential. This is designed to ensure the potential investment represents a secure and sustainable business proposition. The final part of our process is valuation, as we believe it is important where possible to purchase stock trading at a discount to long term fair value. Only when an investment has satisfied all aspects of this process is it considered for inclusion as part of our investment portfolios.

Balancing Risk and Reward

Historically, stock markets have borne witness to the fact that high risk does not necessarily go hand-in-hand with high reward. At Cardale we try to satisfy a client's investment objectives through a combination of suitable asset classes. These can include:

  • Equities
  • Fixed Interest
  • Collective Investments (Unit Trusts, OEICSs)
  • Property
  • Cash
  • Hedge Funds
  • ETFs
  • Structured Products
  • Commodities

As a firm, we endeavour to balance risk and potential reward in accordance with your expressed requirements. Each client has their own definition of risk and their approach to it. By understanding this, we look to build a portfolio that is tailored to both the client's time horizons and tolerance to risk. Our judgement of what is suitable will be reflected in the structure and content of each client's portfolio.

For some clients the return on cash is a suitable benchmark, whereas for others the return of stock market or private investor indices is more relevant. It is for this reason that at an initial meeting we will form a clear definition of risk, which enables us to construct a portfolio tailored to each client's preferences and requirements with agreed parameters, as defined in our terms of business.

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