Wealth management – using crystal balls and expertise

Have your investment and pension funds fallen either recently or in the past? David Woodward wealth manager and managing director of Woodward Financials wealth management explains the root cause.

wealth management

Being recently voted the Best Independent Wealth Management Firm of 2021 has shown that Woodward Financials fully understands what moves the investments markets and can react quickly to preserving capital. But for those that aren’t our clients, you may have experienced an unsettling journey of worry and uncertainty when the markets took a drop.

If only you had a crystal ball, you could go into cash, right? Well, we have a unique weapon in our wealth management arsenal; an algorithm that identifies market movements, especially a move to the downside, resulting in client portfolios being adjusted some days before the market drops and thus preserving capital.

Wealth management with no management

So, what happened in the following weeks? After the algorithm was triggered, nothing short of horrifying. The leading funds looked after by the so-called best fund managers in the industry fell nearly four times as much as the associated markets; how many investors got burnt even though they had a Wealth Management consultant?

How could that be? These fund managers getting six and seven figures to manage funds worth billions, have teams of analysts yet still suffered catastrophic losses.

We did some research to use to our future advantage so we could understand why our algorithm was ahead of the markets, how the leading fund managers stacked up, and also compare their performance with the market associated with their investment fund.

We discovered that many fund managers have limited ability to manage a fund in a bear market. After all, we spotted it and reacted. Why didn’t they?

So if it happened again, which it will, would you reduce your exposure to US funds by 50% if the Dow was going to fall and allocate this to another fund, such as a UK fund? I’d caution against such an approach because you can’t trust a fund manager to perform in a negative market; some funds do go up but what if it’s a systemic market, when everything falls, our algorithm is our crystal ball and we intend to use it as such.

Managing your level of risk

Historically, they say, you should not go into cash unless you have a crystal ball. That said, if you did have that orb of glass and could use it to support your investment decisions, that would be something all wealth management companies would be interested in, unfortunately for them, ours isn’t for sale.

Our opinion now is that if you know the market is going to fall, why watch it fall? And why leave your investment with fund managers that are inept at preserving capital in a negative market? Instead, look for a wealth management service that is looking to break the mould.

Moving out of a fund takes time; moving into another short-term fund also takes time and only when the dust settles do you move towards a growth approach. By sitting in cash for a short period, you can re-enter when the dust settles, you save on fund managers fees and benefit from the upswing.

You could, of course, use a dinosaur wealth management firm, watch it go up and then down and then back up for a mediocre return, or you could use the best wealth management firm with leading technology to help you reach your financial goals.

If you found Wealth management – using crystal balls and expertise useful, you can read more columns by David Woodward here.

Tags: , Last modified: December 14, 2021

Written by 5:32 pm News & Views, Finance

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