Investment Philosophy

Investment Philosophy

The SA Wealth Management advice team invest the necessary time and effort into helping you clarify what is important to you and your family. This understanding allows us to provide advice that is tailored to helping you achieve these goals and objectives. A key component of this advice is investment planning and as such SA Wealth Management have designed a clear and robust approach based on our investment philosophy.


Our approach to investment planning is underpinned by a number of key beliefs. These key beliefs form the basis of the SA Wealth Management Investment Philosophy. This Investment Philosophy is used to establish and review our client’s portfolios. We believe that:

  • Diversification leads to more consistent outcomes
  • disciplined approach underpins successful investing
  • Risk and return are related
  • Investment decisions should largely be undertaken by experts
  • Portfolios should be properly tailored based on client objectives and risk profile


Diversification is a genuine way of reducing uncertainty in your portfolio by spreading investments and not taking a concentrated approach. Whilst most people understand and accept the concept of not putting “all your eggs in one basket” many do not implement it in their investment portfolio. At SA Wealth Management we look to diversify in many ways:

Across multiple asset classes;

  • Across multiple investment managers;
  • Across multiple securities.

This has the effect of reducing overall risk and lessens the impact that any single event can have on your portfolio. A well diversified portfolio can offer a much smoother pattern of returns and reduces the “roller coaster” ride.


We believe that truly successful investing requires a highly disciplined approach. It is definitely not about chasing the highest return in any one year but is about taking a strategic approach, avoiding the all too typical mistakes that erode wealth. An example of taking a disciplined approach is not reacting to short-term performance but, rather, understanding that some markets, managers or securities may not perform as well as others (and may even go down) from time to time. This is the natural cycle of events and reacting to this when it is unnecessary can significantly destroy value. Instead we believe in regular reviews and portfolio rebalancing to keep your portfolio on track.


We understand that risk has a different meaning for each investor but, when we look at portfolio risk we consider the volatility – or the degree to which investments fluctuate. Volatility and return are related and, in general, investments with higher volatility can be expected to have higher returns – a premium for accepting the greater fluctuations – whereas lower volatility investments are expected to offer lower returns – reflecting their greater stability. This is called the risk/return trade off. The range of expected returns varies across different asset classes – defensive assets and growth assets. Equities are expected to have the higher volatility but generate a higher long-term return. When we construct client portfolios we consider the risk/return trade off by balancing volatility and expected return to not only meet your goals, but also smooth out the peaks and troughs.


Many investors spend a great deal of time selecting and managing their own portfolios rather than using the skills of investment experts. Often there is a cost of trying to pick your own portfolios. A US study by research group Dalbar found that over a 20 year period ending 2009 the US share index (S&P 500) returned over 8%p.a. This outperformed the average investor by almost 7%p.a. as they received less than 2%p.a.

Experts can avoid the mistakes that lead investors to get this result because they don’t get caught up in the emotion of investing which often drive the bad decisions made by investors. Also, with literally thousands of investment choices available in Australia and globally, it requires an enormous amount of research and detailed analysis to identify excellent managers, blend them together and undertake ongoing monitoring and change.


At SA Wealth Management, we believe that portfolios should be tailored specifically to your circumstances, taking into account your goals and objectives and your views on risk and return – in fact we may need to construct multiple portfolios to account for your different objectives (e.g. buying a home in a few years and retiring in 30 years).