Why a goals-based investing approach makes sense

Shaw and Partners
Cameron Duncan
Cameron Duncan
Shaw Co-Head, Income Strategies
Whilst risk can be thought of in various ways (standard deviation or volatility of returns) the true risk is that an investment portfolio is not appropriately aligned with the investor’s goals and capacity and tolerances around risk. Consequently, the investment strategy may fall short in achieving the objectives sought.

Shaw and Partners recognises that investors have not only one, but several financial objectives, each with a different consequence around non-achievement. Rather than viewing your investments as one blended portfolio with allocations based on a standardised measure of risk (volatility) we prefer to focus on specific milestones that are aligned with the priorities of our investors. 

The portfolio of financial strategies chosen must closely match one’s unique goals and objectives to create a better journey and outcome. Having this closer alignment of objectives and assets to support gives more confidence to investors and helps avoid common investment mistakes. 

Behavioural biases 
Overconfidence 
Loss aversion 
Regret 
Procrastination 
Hindsight bias 

The idea here is that once the key areas of importance are established by the investor, and have clearly defined the goals they would like to achieve, the appropriate investment strategy is then selected for each goal. An Income Objective for example will result in a different portfolio strategy than say for a growth or capital preservation objective. Also within these objectives the tolerance for risk will also modify the optimal portfolio strategy designed to best achieve the objectives.

The Asset Allocation underpinning the portfolio will consider the key components of investor’s goals: 
Time horizon 
Income versus growth 
The investment entity 
Risk tolerance around failure to achieve the goal 
Relative importance of the goal against other goals. 

Progress is measured against achievement of the goal, rather than simply looking to beat a market benchmark. 

In our portfolio design and risk management, Shaw and Partners blends direct securities such as Equities, Debt and Hybrid Securities together with Strategies such as Unit Trusts and Listed Investment Trusts designed to manage return and risk and maximise the likelihood of investors reaching their financial goals. This process is scalable whilst at the same time allowing for the customisation of investor portfolios with goals and objectives as the primary driver

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With a national presence and $16 billion of assets under advice, Shaw and Partners offers the intimacy of a boutique investment firm with the resources and scale of a major financial group.

We are privately owned and client focused, having helped our clients manage and grow their financial assets for over 30 years. Our emphasis on integrity has enabled us to achieve very high levels of client satisfaction, while unlocking opportunities of significant value.

Backed by fresh thinking, robust research and some of the nation’s best investment and wealth experts, our business has been designed to meet the growing needs of our clients. Shaw and Partners offers access to an extensive team of private client advisers, institutional sales and trading specialists, market leading research analysts and strategic corporate financiers.

By working closely with clients and targeting their needs, we have forged strong long-term relationships. So, whether you are an ordinary investor, high net worth individual, charity, institution or corporate, our goal is simple: to listen to you, then act according to your needs alone.