While storyboarding for our new brand video with our official Brand Ambassador, Chris Bertish (watch it here), I found myself reflecting. Throughout the entire process of both opening Carrick Wealth’s doors in 2014 and sponsoring Chris’s transatlantic SUP (Stand-Up Paddleboard) Crossing in 2017, something occurred to me. This is that there are indeed valuable lessons to be taken from ‘supping’ that also apply to the world of investments.
Here are my 5 investment essentials.
1. It all starts with a goal realised through diligent planning.
As Chris says, you do not wake up one morning and decide to stand-up paddleboard (SUP) across the Atlantic. First, you are inspired by the dream that you’ll be the first ever to achieve this, but at the same time, you know that to get from Morocco to Antigua on a SUP takes very focused planning. As with investment planning, it’s important to balance the challenge of facing the unknown with informed preparation, careful planning and methodical execution.
Your first step – long before anything else – should be setting your financial objectives. Next up, a detailed plan is a prerequisite for success, including a forward cash flow projection so that you can see the impacts of decisions. Your investment plan is your compass on your financial journey ahead. When looking for a financial adviser to assist in identifying your objectives and setting up an investment plan, it’s vital to make sure that it is someone who will engage with you in an active, transparent way – discussing your priorities and long-term goals. It shouldn’t be a one-way process where the adviser instructs and you blindly follow. You need to fully understand the advantages and merits of all the options available to you before you make any decisions.
2. Risk assessment: Expect the best. Prepare for the worst.
A vital factor in Chris’s success was his thorough pre-planning and risk assessment well in advance of his transatlantic journey. In investment planning, assessing risk helps you understand your attitude to risk, what steps may be taken to mitigate risk and, through specific ratios, the upside reward compared to the risk profile. It determines what rate of return is necessary to make investments succeed. At Carrick, we balance three traits to ensure that we recommend and implement the correct investment strategy for you. These traits include:
Risk tolerance – the level of risk you are emotionally comfortable with;
Risk required – this relates to the risk required considering your financial resources available; and
Risk capacity – the level of risk you can afford to take.
3. A well-diversified investment portfolio: You can never have too many backup plans.
Chris had a custom-built paddleboard designed by a naval architect – the Impifish – built for his voyage across the Atlantic. From backup paddles to para-anchors and safety harnesses, Chris had numerous backups with him on the Impifish.
Similarly, one of the tools to minimise investment risk is a diversified portfolio: the idiom “don’t put all your eggs in one basket” will always remain sound investment advice. Spreading your investment across asset classes, geographies, currencies and industries is one of the few time-tested strategies for investors with long-term financial goals.
4. It’s not necessary to navigate the markets on your own.
As an investor, you won’t necessarily have access to the tools of the trade, but there are experts who do. As Chris says himself, he wouldn’t have been able to complete the SUP Crossing without a formidable team who supported him through every stroke of the voyage. His team included the best expertise in the world: an on-call doctor, experienced weather forecaster, routing specialist, as well as state-of-the-art radar and satellite communication tools.
While you are busy with your day to day responsibilities, you need someone to help you stay on course. In choosing a financial adviser, the most important thing to be on the lookout for is dedication to ongoing client service. It’s vital that your investment portfolio be reviewed on a regular basis, checking that your investment solution is still relevant. Having industry knowledge and experience, a qualified and experienced adviser will also be able to advise you during market fluctuations, avoiding often harmful knee-jerk reactions.
5. Communication is key, wherever you are.
While Chris was at sea, he was in danger from many things, such as being run over by massive tanker ships or caught in life-threatening storms. To avoid other vessels, he used a sophisticated radar system which gave him information about the other vessels’ location and bearing. Communication saved his life.
The same applies to investing: you want to have the best communication tools available to protect your investments’ performance. At Carrick, we are passionate about client communication and convenience. Our clients have access to an online platform where they can view their portfolio performance year-round. Each of our clients is also assigned a dedicated Servicing Associate who conducts quarterly reviews summarising their portfolio performance and is always available to answer queries.
In conclusion: Cultivating an attitude of resilience might be the best thing you can do.
Life has its challenges, whether in your personal or professional world. In investing, you often need to prepare for unexpected changes. Once you accept the inevitability of change and work on adopting an attitude of resilience you are on the right track. Being able adapt along the way is the difference between success and failure.
Carrick Wealth CEO