A Cautious Haven in GARCH Times | Whitechurch Securities Limited | Redland, Bristol

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A Cautious Haven in GARCH Times

- How do you manage cautious portfolios when cautious investments look increasingly risky?

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The long forgotten Generalised Autoregressive Conditional Heteroskedasticity (GARCH) model of financial market volatility came roaring back into favour recently.

This return of volatility to stockmarkets (w/e 16/02/2018) may well have unnerved many investors. In context, the movement (thus far) is small compared to previous market sell-offs. Nonetheless, at Whitechurch, we see an increasing demand for cautious investment portfolios at the current stage of the investment cycle. In particular, we are seeing demand for cautious, income-generating investment portfolios.

After a sustained period of rising markets, many investors are looking to lock in gains and move to reduce risk, but they still want a cautious investment strategy that can provide the potential to beat cash and inflation.

However, for those managing cautious investment portfolios, a key challenge has emerged - How do you manage cautious portfolios when cautious investments look increasingly risky?

THE WHITECHURCH WAY

  1. We do not rely on a traditional asset allocation based frameworks.
    We believe these models are too restrictive and rely heavily on expensive assets becoming more expensive.
    We allow greater freedom to fill a portfolio with attractive opportunities.
    As a result, we are not compelled to own assets we deem to be unattractive.
  2. We have a disciplined risk management approach.
    We manage risk according to total exposure to equities, volatility and have an emphasis on diversification.

 

PROOF OF THE PUDDING

Our Cautious income-generating Prestige Income 4 Portfolio picked up the Platinum Award for the Best Cautious Investment Portfolio at the recent Portfolio Adviser Wealth Manager Awards. Click through to see why and how it's strong track record demonstrates the robustness of our risk management approach.

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