At Acuvest, we go to great lengths and effort to develop innovative and rewarding investment strategies for our clients. This is to be expected by you, as today we advise our clients on more than €4.5 billion in assets and impact the futures of more than 40,000 households.
The Acuvest team has held executive positions in the actuarial, finance, insurance, communications, pensions, general management and investment management disciplines across some of Ireland’s largest financial institutions. We understand the importance of planning in business and being able to adapt to a changing business environment. Similarly, when it comes to advising our clients on their investment planning, our investment process focuses on a long-term horizon, but at the same time being able to adjust to an ever-changing market environment.
Our investment committee supports our in-house investment team, who combine a rigorous investment planning process with deep-rooted investment knowledge and research. The investment world is changing every day, and our research and education ensures we stay at the forefront of the evolving investment climate.
When it comes to long-term investing, our investment principles are aligned with that of some well-known experts in this field, such as Warren Buffett. Widely recognised as the world’s shrewdest investor, the Sage of Omaha is now 91 years old and continues today as the chairman and CEO of Berkshire Hathaway, the conglomerate headquartered in Omaha Nebraska. Their annual shareholder’s meeting is a famous event, attracting crowds some years in excess of 40,000 people. Some investors buy a tiny shareholding just to attend the event and to receive his famous annual letter to shareholders. When Warren talks, people listen. And why wouldn’t they, he has amassed a fortune in excess of $100 billion dollars through sticking to his investment principles.
Buffett is a great communicator, he has made extremely complex and technical investment theories understandable by all. He does this through a very wide range of pithy and memorable quotes, and we would like to share a few of these with you.
Starting with what’s known as his Golden Rule, Buffett said that,
“Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.”
It sounds very simple, but it’s amazing how often investors can forget this. Buffett believes that investing over a reasonable timeframe is about making instead of losing money. It’s not about taking unnecessary risk with the hope of achieving supernormal returns, instead investors should focus on rational investing that will ensure they always make money. You need to grow your capital over a reasonable timeframe, in all circumstances.
The importance of time in investing is a theme that Warren Buffett returns to again and again and is the subject of some of his most famous quotes. Among these are,
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
“If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”
“No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”
Investing takes time and patience and cannot be rushed. Your rewards will come in the future, like the shade of the tree. You cannot achieve them in the short-term, except by taking significant bets… back to his Golden Rule.
Another theme that Buffett returns to frequently is the importance of investment behaviour and not letting emotion cloud your judgement. Think back to just before the financial crash of 2008 as Irish people bought second and third rental properties, and holiday villas in places they couldn’t find on a map. And others had all their wealth in single stocks that surely must keep going up – do you remember Anglo Irish Bank? People got greedy. Buffett said,
“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”
Before 2008, greed took over and some investors paid a very heavy price. In hindsight, this was the time to be fearful and run away from such investments. We see this in various markets all the time. As they climb high, novice investors get greedy and buy in when assets are expensive. Likewise after market crashes, we see investors panicking and selling up at the lowest, price, just when Buffett says to be greedy and buy in. On this theme he says,
“Whether we’re talking about stocks or socks, I like buying quality merchandise when it is marked down.”
At Acuvest, our ongoing research ensures we make the best possible investment decisions for our clients. Right throughout his career, Buffett blocked out a portion of his day just for reading and thinking. Every single day. He believes that without knowledge, poor decisions are taken that increase his risk. As he said,
“Risk comes from not knowing what you are doing.”
If you would like to find out more about Acuvest’s investment expertise and how we can help you reach your investment goals, please contact Aengus Moran, Investment Advisor, on 01 634 4807 or email directly at aengusm@acuvest.ie.
