Our expertise lies in managing assets with intrinsic value and long-term prospects that can be rationally understood.
Two investment categories
- Fixed-income products: the by-word for steady performance, as their returns are known in advance and guaranteed to maturity. This visibility comes at the cost of lower returns, which are generally just slightly ahead of inflation.
- Equities: returns are correlated with long-term economic growth and the success of companies. Their performance over a long period is strong, generally more than double the rate of inflation. Where these assets are listed, they are subject to volatility that can be significant over the short term, due to the economic unknowns of the companies and the psychology of investors.
Investment horizon: performance and volatility
The investor allocates their assets between fixed-income and equity securities depending on their investment horizon. The measure of the risk of an investment is the probability that it will result in a loss of purchasing power at the end of the investment period.
- In the short term, volatility is the average risk of loss. Historically, only fixed-income investments (bonds, money market investments) have had volatility lower than their returns. This is why they alone can be used to protect capital and ensure income over a short period.
- In the long term: equities generate higher returns than money market or bond investments.
Moreover, the risk and scale of loss decrease over time. Historically, when held for more than ten years, equities prove to be less risky on average than fixed-income assets, whilst also offering twice the return.
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The investment decision is the result of a four-stage process of reflection.
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