Quantum Wealth Summary
- Building real wealth means beating the market.
- We look at alpha and value opportunities.
- We look at 2 companies delivering outsized returns in a tough market.
- We consider where value is currently evident in 2022.
In offshore finance, you see some of the world’s wealthiest investors.
Family offices with £300 million or more invested.
This is generational wealth. Often, the concern is not to necessarily grow the pot. But to protect it against unstable governments, wayward family members — and, of course, market movements. Or at least the fear of the next big drawdown.
You see, when you get another Covid 2020 or GFC, a 35% market drawdown could mean loss of £100 million for a large family office. Since investors often use the liquidity of their portfolios and assets to raise credit, this can have a huge effect.
For example, if the family wants to take the opportunity to buy a commercial property somewhere, this can be difficult if part of the equity has dried up due to market meltdown.
So, when I was working in the industry, for a few years around the Brexit vote, there was one goal everyone sought: alpha.
Alpha is the return an investor can achieve over and above the market return. It is the extent to which your wealth fares better compared to the market. And the protection you have from deep market movements. It’s the gold, really!
For example, if your benchmark is the S&P 500 and it falls nearly 6% (as it has since the start of this year), but your portfolio grows over 2% — as our Vistafolio model portfolio shows — your alpha may be 8%. Potentially, 8% over and above the benchmark.
Actually, the benchmark for our model portfolio is the MSCI EAFE Index — which follows our weighting toward European and Australasian opportunities. But numbers are not yet out for this index for 2022.
In any case, here’s how we’ve done since 2014 against this index — and here are the specific opportunities we’re now looking at…