The NorthStar Investment Philosophy
We believe that your money should work hard for you and that a long-term investment strategy is essential for success. For many people, investing money is fraught with complexity with so many options to choose from, it can be hard to get it just right and have confidence that your goals will be met.
Investing for the future is subject to many uncertainties. We don’t pretend to be able to predict the future or invest you in ‘the next big thing’; what we do offer is years of investment experience, a tried and tested investment process and a system of continually monitoring to ensure your investments have the best chance of achieving your goals.
We won’t baffle you with technical investment jargon to dress up our investment process or to scare you into using a professional investment manager – we tell it as it is and set out clear investment principles and our investment methodology.
Our investment process aims to give each of our clients a successful investment experience. Rather than using speculative practices, we adopt a methodical investment strategy that is cost-effective, academically proven and fully transparent.
We believe there are eight key things to ensure long-term investment success:
Define Goals
Investing without a goal is a bit like a journey without a destination. Setting clear investment goals is one of the most fundamental parts of successful investing and something that many investors fail to do. A clear goal will help determine the investment horizon (how long you have to invest), how much you may need to contribute to your investment and help with the assessment of how much risk you need to take to ensure your goals are met. We work with you to set clear investment goals and continually monitor and review your investments to ensure your goals are met.
Keep it Personal
Your investments should perfectly match your goals, your tax position, your beliefs, and your risk profile. This is why we provide each NorthStar client with a personal, bespoke investment strategy. Each strategy is dynamic and is designed to evolve as you progress through life and as your goals and aspirations change. Ultimately though, it’s really all about you – not your investments. Your investments are just a means to an end. We really get to know you to provide an investment strategy that will allow you to do the things you want to do – to live the life you really want.
Simplify
We like to make sure you can always see the bigger picture. Our Client Portal ensures you can see your total investment position in one place. This allows you to make sense of your financial affairs and allows us to create a bespoke investment strategy that optimises your position. Where necessary, we can move your existing high-charging, complicated or under-performing investments to simpler, leaner contracts to ensure they have the best chance of performing well. We can simplify your investments to create a single, unified strategy that is simple to understand, easy to monitor and is well-placed to deliver your investment goals.
Diversify
Study after study has shown the benefits of a diversified investment strategy. The old adage of not putting “all your eggs in one basket” really is true. Sure, by diversifying, you won’t ever get the returns that can come from an “all on red” risky investment tip, but you will get a strategy that you can depend on. Not only does a broadly diversified strategy mean you get more certainty in your investment returns, it can also provide a much better trade-off between risks and reward. Higher risk investments can be carefully blended to produce a portfolio that provides a lower aggregate risk than any of its constituent parts but that can still deliver strong long-term returns.
Cut Costs
Many people don’t realise how much they are paying for their investments and what a large disparity between high-cost and low-cost funds can mean for the long-term growth prospects of their money. We predominantly use low-cost investments, with clear, simple charging structures to ensure you always know how much you are paying. Our strategies have been shown to reduce the drag on performance suffered by many traditional investments meaning you can benefit from higher returns. Low-cost should not be confused with low-quality, with many of the funds we recommend being some of the best available.
Reduce Tax
Tax-efficient investing can really boost the overall returns from investments and should always be carefully considered. In the UK, there are many tax-advantaged investment ‘wrappers’ with the most popular being Individual Savings Accounts (ISAs) and pensions. Investments placed into these types of wrappers can significantly outperform versus standard investment options. Our comprehensive investment review includes a detailed analysis of the most tax-efficient investment strategies for you to ensure you make the most of every tax advantage available.
Be Disciplined
Discipline is essential for successful investing. It is sometimes easy to take short-term decisions to get short-term wins but this may detract from your long-term aims. We use a structured approach to investing, ensuring we stick to our principles and always plan for the long-term. Through a combination of technology and expert oversight, we actively monitor your investment portfolio. We regularly recommend portfolios are ‘rebalanced’ to stop excess positions building up and to keep all investments in-line with their original strategy.
Think Long-Term
Investment should always be seen as a long-term strategy. During the period of any investment, there are likely to be periods of underperformance, there will be financial shocks and there will be major global events that will all impact an investment strategy. Our expertise and experience is valuable to help you see through these short-term fluctuations and focus on the bigger picture. We help you understand not just what has happened, but why it has happened and continually assess the strategy employed to ensure it remains optimal over the long-term.
For more in-depth information about our investment management process, please head to the Document Library and take a look at the latest ‘Investment Management Process’ document.
What Drives Long-term Investment Performance?
When it comes to investing, studies have shown that the biggest factor in determining long-term performance is ‘Asset Allocation’. This is the make up of a portfolio – the mix of equities, bonds, property, cash and other investment types.
Many people think that successful investing is about trying to find the best stocks (stock selection) or trying to time the markets (buying low and selling high) but these strategies rarely work. Academic research studies have proved this time and again.
The message is clear – get your asset allocation right and you will invariably have a great investment strategy.
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Asset Allocation
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Stock Selection
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Market Timing
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Other Factors
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Awards, Accreditations & Trade Associations
NorthStar is proud to be a member of the leading financial planning trade associations. Through a continued commitment to adhere to the highest professional standards and deliver exceptional service, NorthStar has received a number of awards and professional accreditations.
