Santiago
London
Sound wealth planning recognizes that there are things outside our control and frames these problems as decisions under uncertainty.
Investment Philosophy_
Capital
less control
more control
The role of uncertainty_
The natural state of things and the financial market in particular is uncertainty. Both market performance and regulatory scenarios are things that change dynamically and over which we usually have no control.
The correct construction of portfolios recognizes that there are things that escape our control and faces these problems as one of decision under uncertainty.
This is a fundamental difference with other investment approaches based on projections or fixed assumptions about the future, which usually do not come true and end up generating wrong results and incorrect risk management.
The value of simplicity
Simplicity is the perfect complement to transparency when managing investments and building long-term relationships with investors
Investment policy
Complex investment strategies are difficult to manage, lead to errors and hinder the resolution of the core problem. It is important for the core of any investment policy to be simple and transparent in order to ensure adequate measurement and management control. Simplicity does not imply a lack of sophistication in the analysis, but it does lead to general guidelines that are easily implementable and measurable.
Investment vehicles
Investment products can often be more complex than necessary. Sophisticated, opaque instruments, intricate remuneration structures and multiple proprietary layers are frequently used without a sound investment rationale. This sophistication rarely benefits the investor.
Management control
Complex structures hinder the benchmarking and monitoring process. The number of ad-hoc assumptions and intermediate resolutions for investment evaluation grows significantly as complexity increases. Weaker measurement tools mean more monitoring time and poorer feedback between agent and principal.
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