Finally it seems that the All Blacks have learned that winning World Cups means having more points on the board at the end of each game. It doesn’t matter what your ranking is, how much depth you have in your squad, how wonderful each of your players is or whether you play attractive rugby. All that matters is points!

As opposed to their normal style of play, the All Blacks have gone about accumulating points at every opportunity in each game they play. (The Springboks with all their so called ‘experience’ clearly forgot this basic point).

What has this to do with investing?

Most people seem to forget that the ultimate purpose of investing is to replace the human capital (ability to generate an income) with financial capital at some future date.

Instead of only taking the risk needed to achieve this objective, many investors put the whole principle at risk. They try to play ‘exciting, attractive rugby’ with their investments. Outguessing the markets, excessive gearing strategies and tax driven schemes have often been the order of the day. Why take any more risk than is necessary to achieve the return required to deliver the financial capital to sustain the desired lifestyle. Once that has been achieved (usually 20 times the desired annual after tax income) then, and only then should more interesting/ fancy strategies be contemplated.

The All Blacks will almost certainly win the World Cup. Much of it will be as a result of the lessons they learned from past mistakes and how they captured those lessons into a changed strategy.
What lessons have you learned from the GFC and have you written them down into an Investment Policy so that you will apply them now and forever.

Contact SentinelWealth to assist you to draft an Investment Policy Statement.

Justin Hooper
Managing Director & Financial Strategist
SentinelWealth