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Guiding principles to manage, grow and protect your wealth

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5 guiding wealth principles

We use 5 guiding principles – Discipline, Diversification, Time in the market, Risk & return and Protection to manage, grow and protect your wealth. This ensures your investments remain robust and investment decisions are consistently applied to meet your financial goals.


1. Discipline

It removes emotions from investment planning and ensures you maintain focus on your long-term financial goals and protection needs through regular investing, monitoring and portfolio rebalancing.

  • Stay focused on the long term as short term market moves are difficult to predict
  • Don’t react to emotions such as optimism and fear as they can lead to poor investment decisions at the worst times
  • Stay true to your goals to remove emotions and biases – create an investment plan

Putting it into action:

  • Instil discipline through investment planning
  • Regularly review and rebalance portfolio
  • Invest systematically and regularly
  • Maintain some cash for opportunities
  • Avoid distractions that results in emotional buying and selling

2. Diversification

Don’t put all your eggs in one basket. Diversification allocates your investments across asset classes, geographies and sectors, based on your long-term financial goals, to reduce exposure and risk to each asset and achieve more stability for your portfolio.

  • Manage and reduce risk through diversification – if one investment underperforms, this may be offset by other gains
  • Ensure your portfolio has a variety of asset classes and investments that have low correlation to each other

Building a diversified portfolio:

  • Start with a diverse Foundation Portfolio using our Tactical Asset Allocation as a guide, to deliver longer term returns over investment cycles
  • Personalise your Foundation Portfolio by adding short term Opportunistic ideas to enhance returns or diversify further

3. Time in the market

Time in the market generates more consistent returns. Investing for the long term, and not worrying about daily market fluctuations, helps ride out bumps and avoid missing the best performing days, which can impact your returns.

  • Provides more consistent returns that can ride out bumps along the way
  • Market sell-offs are hard to predict and timing your exit and re-entry is challenging

Avoid timing risk:

  • Apply ‘Dollar Cost Averaging’ by drip-feeding savings into investments regularly, and agreeing on your purchase frequency
  • This average entry price smooths the impact of market fluctuations and timing
  • If any of these investments fall in price, you can accelerate your purchases

4. Risk and return

The relationship between risk and return is important in making sound financial decisions. Understanding what risk you’re willing to take, and how best you can manage these risks, helps maximise returns on your portfolio.

  • Higher investment returns typically involve taking a greater level of risk
  • Weigh the amount of risk you are willing to take against the potential return to decide if it’s worth it

Managing risks:

  • Understand the risks in your portfolio and manage these risks on an ongoing basis
  • Ensure you have sufficient diversification to reduce risk and the chances of loss if your investment underperforms
  • Have regular portfolio reviews and rebalance to ensure your portfolio remains aligned to your risk tolerance and return expectations

5. Protection

Don’t let the unexpected catch you unprepared. Protecting the value of what you have, and what you will generate in the future is important.

  • Even if you feel healthy or financially stable now, protection helps overcome times of financial uncertainty and mitigate the impact of unforeseen events
  • Your protection plan should also consider the value of your future earnings over your lifetime

A good protection plan:

  • Looks after you and your loved ones should you lose your income from illness, disability or accident
  • Provides protection against life’s uncertainties
  • Brings peace of mind
  • Brings certainty and discipline to financial planning

Our wealth principles

Our approach to wealth