Quantum Wealth Summary
- There’s now some certainty around rising interest rates, which means investors will act differently.
- Since late last year, the market has been rotating away from technology stocks. It started favouring defensive stocks with value.
- The portfolios we manage have been built with a value focus— so they’ve outperformed the market.
- Will the market turn again in 2022? How can you catch the upside when it happens?
- We profile one listed business that could once again rise against the tide.
‘Change is inevitable. Growth is optional.’
―John C. Maxwell
As investors, we seek growth above all else.
Passive income from dividends is great. Holding a diversified portfolio gives security.
But the real benefit from investing comes from growing your capital.
Growing your capital in volatile markets means swimming against the tide. Source: Pixabay
Toward the end of last year, I spent some time at a salmon farm in the South Island.
It was fascinating seeing the fish jump into the air. And tasting fresh sashimi.
After watching documentaries on some of the horrors of intensive salmon farming, I was happy to learn about the fresh, natural approach here in New Zealand.
Currently, the feed for Kiwi-farmed salmon does not contain antibiotics, vaccines, steroids, or colourants. Only Astaxanthin — naturally present in wild salmon diets — is added to the fish feed to mimic that diet and maintain fish health.
Wild salmon contains many more minerals than farmed salmon and tends to be lower in fat.
If you can find it, it’s also likely to be 3x the price.
There is something special about the way salmon breed in nature. They migrate from the sea back to the rivers or streams where they originally hatched to spawn.
To achieve this growth, they swim vigorously against the stream.
If you want to achieve growth as an investor, you too can benefit from swimming against the stream. You’ll find opportunities others miss. And you could grow your wealth faster.
In the Wholesale Portfolios we manage, for the past few years, we’ve swum against the stream by concentrating on value and defensive stocks. While the market has chased tech.
This has meant, over the past few months, through a volatile period of war, inflation, and fear — we’ve done better than most. We’ve kept ahead of the curve.
With value and defensive now sitting high, we’re looking to change tack. To keep swimming against the new tide we now see.
Of course, a rotation from value to tech and speculative carries more risk.
We don’t want to stick our hands in acid to chase increasingly uncertain growth. And even if we chased tech and growth, what about inflation?
The US Fed has signalled six more rate hikes are to come.
Many high-growth firms carry high rates of debt. Inflation makes their return hurdle much harder.
Well, it is possible to find speculative growth companies with low debt. Now sitting at value.
And in this case, I wish to now profile ‘the one that got away’…
Simon is the Chief Executive Officer and Publisher at Wealth Morning. He has been investing in the markets since he was 17. He recently spent a couple of years working in the hedge-fund industry in Europe. Before this, he owned an award-winning professional-services business and online-learning company in Auckland for 20 years. He has completed the Certificate in Discretionary Investment Management from the Personal Finance Society (UK), has written a bestselling book, and manages global share portfolios.