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INTRODUCTION

INTRODUCTION

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INTRODUCTION

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  1. OUR INVESTMENT PROCESS INTRODUCTION Warren Buffet (born 1930 ) has been described as the world’s greatest investor and has amassed a fortune of $50 billion, simply by investing in private companies, shares and fixed interest investments. Benjamin Graham, his mentor and teacher founded the Chartered Financial Analyst (CFA) degree and wrote a book “ The Intelligent Investor “( in 1949 !) which Buffet described as the best book ever written on investing. The book is still so relevant that it has been republished many times and again in 2005. The Spectrum investment planning principles are based on many of Graham and Buffet’s teachings, the cornerstone one being the differentiation between investment and speculation "If you are an investor, your decision is based on the underlying economics of the stock you own. If you are a speculator, your decision to buy or sell is based on what you believe about the near-term direction of price." The Spectrum process focuses on an INVESTMENT BASED decision process and avoids a SPECULATIVE approach. value through knowledge

  2. OUR INVESTMENT PROCESS OUR INVESTMENT PROCESS What makes an investment portfolio successful ? • Some years ago, one of the largest multi-manager investment groups in the world, • conducted a survey of many investment fund managers to determine what part • of the investment process added the most value. Was it ? a. Timing ?( when to buy, when to sell ? ) b.Stock Selection ?( what share ?) c. Asset Allocation ?( How much in property, shares, bonds and cash ? ) The study showed that, on average, Timing and Stock Selection actually subtractedvalue from the performance of a portfolio while Asset Allocation added 80% of the value. For this reason, we have made Asset Allocation the cornerstone of the Spectrum Investment Process value through knowledge value through knowledge

  3. OUR INVESTMENT PROCESS OUR INVESTMENT PROCESS Choosing the right funds • In our experience, most people choose investment funds by looking at tables of • historic investment performance. Naturally they would choose the top performers. It has been shown that if you were to use one year historic performance as the only reason to choose a fund, you would do better to move your cash into the worst performing funds of last year ! ( Think about - why ? ) Our fund selection process is based on : 1. Consistency of Performance. Over a period of at least 3 years in comparison with similar funds. We also study the short term fluctuations in performance. 2. Pedigree of Investment House. What is the “culture “ of the company? Is there consistent personal integrity in the management team ? Is there an alignment of company and client objectives ? 3. The Investment Process. Is the process dependant on any one individual ? Does the process have a specific investment style ? At Spectrum, we believe that building a successful investment portfolio is about combining fund managers with complementary investment styles within an asset allocation framework that suits the client’s circumstances, expectations and risk appetite. value through knowledge value through knowledge

  4. OUR INVESTMENT PROCESS Implementation STEP 1 Together, we will complete Spectrum Client Information Sheet which will give us a full understanding of your personal and financial needs and circumstances. STEP 2 Then we will complete the Spectrum Risk Profiling and Asset Allocation Questionnaire which will enable us to measure your attitude towards investment risk as well as the appropriate risk for your financial circumstances and income needs. STEP 3 We will then discuss the results of the questionnaire which will give us the general guidelines to prepare a recommended investment portfolio using the Spectrum Shopping List of approved funds and the Spectrum Asset Allocation Matrix STEP 4 We will present our recommendations to you which will include cost comparisons of potential investment administrators and full disclosure of all the details of underlying funds. STEP 5 We will implement the investment and provide you with internet access to the real- time value of your portfolio, enabling you to track performance and costs by individual fund. STEP 6 We will monitor the portfolio performance every month and set 6 monthly review dates when we will discuss any changes in your circumstances or improvements in the fund selection within your portfolio. value through knowledge value through knowledge

  5. OUR INVESTMENT PROCESS If you need any further information about our investment process or would like to complete our Risk Profiling and Asset Allocation Questionnaire, Please contact one of our Financial Planners in the “Our Team “ section or go to the “Contact details “ section of our website value through knowledge value through knowledge