Many of our clients have built up considerable wealth over their lifetimes. Critical to the preservation and growth of this wealth is sound portfolio management.

Arcadian Private Wealth’s portfolio management service includes:

• Investment research & selection
• Asset allocation
• Risk management
• Evaluation of new opportunities
• Ongoing review

In constructing portfolios, we consider two main risk factors, risk capacity and risk tolerance. Risk capacity is about how your money should be invested in order to achieve your long-term objectives. Risk tolerance on the other hand is about how you will sleep at night, knowing where your money is invested. The risk tolerance of people is often challenged in tough economic times and many people go from thinking long term to short term.

A common misconception is that it is an adviser’s role to ‘predict the future’. Financial history shows that time after time, noone has been able to predict the timing and extent of cycles business cycles or movements in financial markets. Many people hold the view that their adviser should be able to sell their shares before there is a correction in the stock market. All the academic and industry research shows that this is not the case.

In light of the difficulty in knowing the future, what role does your adviser play? The role of your adviser is to create a robust portfolio that will preserve your wealth and outpace inflation over the long-term. This role includes ensuring that your portfolio generates the cash flow that you require in retirement. The main driver of wealth management is ensuring you have cash to meet your lifestyle goals and desires.

We believe strongly in the principle of diversification. The are two elements to appropriate diversification. A portfolio should be diversified within an asset class, i.e. in the share market you should hold a significant number of stocks, and then diversification between the different asset classes, i.e. you should hold more than one asset class, such as shares, property, government bonds and cash.