Investment Planning
For many of us, achieving our financial goal requires us to make some investments. However, without careful planning and management of our investments, we may find ourselves unable to handle the volatilities of the market, succumbing to fear or greed in response to market developments, and may not even succeed in achieving our goal.
At Providend, investment planning always takes place only after completing the financial planning component, in which we align your need, ability and willingness to take risk before determining the level of risk you should be investing at. Financial planning also helps us to work out your financial objectives, which guides our decisions when we plan your investment portfolio. The investment portfolio we customise for you ensures that you only take on as much risk as you need to and can cope with, but remains able to give you the returns you need to achieve your financial goals.
In addition, as part of the annual financial review we will go though an investment review with you, which is a detailed report on the performance of your personal investments. In this way, you can keep track of your progress towards your financial goal. Through various channels such as our monthly newsletter, fund factsheets and regular client events, we also keep you updated on developments in the market and any changes we made to your portfolios.
Any form of investment involves some amount of risk. However, with our investment planning model, you can be confident of fulfilling your goal without losing sleep over the volatilities of the market.
Our Investment Planning Philosophy
Our investment approach is never to maximize returns by just timing the market. Such an approach, typically adopted by active funds, always attempts to beat the market, making it highly unpredictable and difficult to achieve on a consistent basis. Rather, we focus on the long-term returns of assets and believe in compounding returns by staying invested and continuing to invest. We prefer to ride the volatilities of the market rather than risk making permanent losses to our capital.
While our investment objective is to deliver an annualized target return from your investments, we control the risk level of your portfolios by diversifying across asset classes and markets, as well as investing mainly in index funds, which focus on getting the average returns of the market and are therefore less risky and better able to deliver more consistent returns. Index funds are also less costly, minimizing leakage from your returns.
On a day-to-day basis we are continuously monitoring market developments as well the performance of the portfolios. When the use of active funds are necessary, we periodically conduct valuations and ranking of the funds in our portfolios and arrange meetings with the fund managers to find out more about their performance and strategies going forward. All this information helps us to ascertain the need to make changes to our portfolios.
Although we do not engage in market timing, which reacts to short-term developments in the market, we do make changes to our portfolios from time to time in anticipation of long-term opportunities or risks to enhance returns or preserve capital. Such investment decisions are made by our highly experienced investment committee, who meet up regularly to discuss matters such as the implications of market developments and any necessary action to the portfolios.