Investing in last year’s hot stocks, indexes or managers is a sure way of underachieving in tomorrow’s financial markets. Exceptions exist, but academic studies verify this time and again.
So what is the secret to better investment performance? Don’t invest for the short run, and anticipate the future.
We at AMG spend considerable time and resources thinking about the future, researching international and domestic economies. What major issues and opportunities might materialize? What economic sectors can best take advantage of those opportunities? How can our clients profit from this research while preserving their wealth?
AMG’s research team also actively searches for disruptors, companies that are out to change economies, industries and societies. For example, is Elon Musk and his Tesla electric car the future of the automobile industry? Or are Google’s driverless vehicles? Or is it a combination of both? Similar questions exist for every industry as robotics, artificial intelligence, crypto-currencies, online retail, alternative energy and fintech transform the world.
Knowing that stock and bond prices are influenced by the strength of the economy, inflation expectations and future interest rates, investing today is implicitly saying something about tomorrow. Alternative investments – venture capital, private equity, hedge funds, real estate, and energy – require additional research and due diligence to create value over longer time frames. What is critical is correctly deducing the future, foreseeing how value creation can occur.
That is why AMG financial advisors are backed by a professional team of researchers and financial experts. Some focus on researching economies and markets worldwide. Others look for opportunities unique to our clients’ needs in broader venues than the financial markets. Understanding the why and how of the past, as well as assessing the what and how of the future, creates opportunities to preserve and build wealth with comprehensive, tailored investment strategies.