Our investment philosophy
Our investment approach is underpinned by a series of core beliefs that guide how we manage your money. Find out more about what these are and why we think they matter.
We believe...
Faith in capitalism and confidence in markets is rewarded over time
The capital markets are far from perfect, but they do a good job of fairly pricing all publicly available information about securities. The price is an aggregation of all that data over time.
Asset allocation and portfolio structure drive return
The most important factor determining the level of risk and variability of return in a portfolio is asset allocation.
Risk and return go hand in hand
It is a fundamental law within investing that to achieve a certain level of return, you must accept a certain level of risk. In other words, the potential financial loss you expose yourself to in investing and taking a risk, is also the reason you earn a return. You are compensated for the risk you take, with the return you receive.
Consistent outperformance is rare
It’s an extremely hard task for an active manager to consistently beat the market. It’s even harder to predict which manager will manage to do so in advance. Economic uncertainties, random market movements and the rise and fall of individual companies are all part of financial markets’ natural activity, and predicting when and to what extent those things will happen is a fool’s errand.
Diversification is essential
No one knows what the future holds and owning a highly diversified portfolio spread widely across different assets (bonds, equities, and property, for example) and across global markets, industry sectors and by company, helps make sure that we are prepared for whatever the markets throw at us over time; a portfolio for all seasons, if you like.
Costs matter
Portfolio costs eat away at the market returns that you should be gathering for yourself; after all, it is you who is taking the risk. The effect of small differences in costs will compound into large differences over long periods of time.
Patient, long-term investors are rewarded
One of the great challenges that all investors face is that there is no easy or quick way to investment success. Aesop’s fable of the tortoise and the hare is a useful metaphor. Use the time on your side to capture the returns of the markets effectively, but slowly.
Control your emotions using a systematic, disciplined approach
It is essential to stop yourself succumbing to impatience and ill-discipline. Market difficulties like the Covid-19 crisis can test our fortitude. When an investment strategy has been agreed, it is important to stick to it, in good times and in bad.
We don’t believe…
Advisers should pick funds
We have seen plenty of evidence that this doesn’t work with consistency over the long term. Advisers should concentrate on life planning, financial planning and tax mitigation, as modern index funds give investors the market return less very low costs.
Investors or advisers should try to time the market
You should invest when you have the money and withdraw it when you need it. If you do anything else, you have to be lucky twice. Timing markets can be like “trying to catch a falling knife”.
Investors or advisers should try to predict the future
It can be very tempting to try and look into the future and guess the direction that the markets may take. There is a saying in investing that we adhere to: “Those who live by the crystal ball are destined to eat ground glass”.
That risk should be avoided
History shows us that markets rise much more than they fall. Risk can be managed with a patient, disciplined approach and by using methods such as portfolio rebalancing. Investors need to embrace risk as this is the only way that their portfolio can outpace inflation.
The value of an investment can go down as well as up, when investing your capital is at risk
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To find out more about how we could help with your finances, simply get in touch to arrange your free, no-obligation consultation.
Callisto Wealth Management Limited, The Stables, Pasture Lane, Business Park, Pasture Lane, Rainford St Helens, Merseyside WA11 8PU is authorised and regulated by the Financial Conduct Authority. Financial Services Register Number 607698. https://register.fca.org.uk/
The Financial Conduct Authority does not regulate taxation advice and will writing.
Registered office: The Stables, Pasture Lane Business Park, Pasture Lane, Rainford, St. Helens, Merseyside, England, WA11 8PU. Registered in England & Wales (07540572).
Regulations, levels and bases of taxation are subject to change and individual circumstances. The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
If you have a complaint or dispute with us, you are entitled to make a complaint. We have a complaints procedure that is available on request. If you wish to register a complaint, please contact us either in writing, by telephone or email.
Please be assured we treat complaints seriously. For your protection if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service (‘FOS’). Please see the following link for further details:
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