Investment Approach
In practice the overall investment approach employed by Proactive Portfolios can be summarised as follows:-
- Avoid paying too much for an asset class or individual stock using a long term fair value approach to assessing whether current prices are high or low
- Be prepared to make significant decisions to shift weights in individual stocks or in asset allocation
- Be patient in making those shifts over time if the level of uncertainty is high
- Actively Manage Holdings without necessarily making lots of changes in a short space of time (avoiding transaction costs) or making sudden changes which may be incorrectly based
At Proactive Portfolios we aim to deliver returns which are above those of a long run neutral asset allocation benchmark. This is achieved by proactively shifting asset allocation away from the neutral benchmark when asset prices are over or under valued and also by proactively selecting an Australian Equity portfolio based on input from our panel of specialists.
Proactive Portfolios has set unashamedly wide asset allocation ranges. We expect to make full use of these ranges in extreme market conditions but also expect to operate within the middle two thirds of the ranges most of the time. We may reach the top or bottom of the ranges only once in twenty years but we need the ability to do so to provide the best value to investors.