The Axiam Wealth Blog
Investing is a lifelong journey. There is always more to learn and teach. Our mission is to share the timeless wisdom that leads to investment success. We want to empower our clients to understand the path to achieving their financial goals through investment success.
The investment industry can be confusing. It is debatable whether it is the intention of the establishment to make the investment process sound more complicated and confusing than it needs to be. Our mission is to share investment knowledge and experience through our blog and email newsletters.
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The AXIAM Annual Investor event took place in late January in Johannesburg and Cape Town. The event offered the AXIAM Team the opportunity to spend time with clients and others interested in our investment philosophy. It also provides us with the opportunity to give a perspective on the past year and a view of the year going forward.
Unlike speculators, investors have criteria against which they evaluate investment opportunities. Charlie Munger shared four criteria he and Warren Buffett use to evaluate an investment opportunity in the following interview: full interview here.
Our investment blogs are designed to demystify the investment process and show that it can be simple to understand. There are many different investments options. So many in fact, that making a choice can be daunting. Investment options include, but are not limited to, property, private companies, commodities like gold and copper, listed companies, futures, options, mutual funds and exchange traded funds to name a few.
An investment philosophy is essential to provide focus on assets that are understood and within your “circle of competence”. It is essential to comprehend what you have bought! Ideally, you have an affinity and passion for the companies that you own. Our clients love understanding their investments and the investment process.
AXIAM Capital Management focuses on buying shares in the global companies listed on various stock markets around the world. Focusing on listed companies does narrow the field of investment options, but there are still way too many companies to analyse in detail. According to the World Bank, in 2015 there were roughly 43,500 companies listed on global stock exchanges. Our investment strategy blogs focus on how we select the companies that we buy. Our approach focuses on companies that we can genuinely understand. These companies have characteristics that will allow us to achieve our clients’ investment goals.
Investment Income & Capital Gain
Our research has shown that many new investors believe that the only way to profit from investing in the stock market is to buy shares in the hope that they will rapidly increase in price so that they can sell them at a profit. The investment return results from selling the asset for a capital gain. Our approach is to buy companies that we can potentially own for decades. These companies provide growing income for our investors as well as capital gain.
Our investors earn regular investment income through quarterly dividends. Reinvesting quarterly dividend income in additional shares unleashes the power of compounding.
Understanding value and price of investments
A great company is not a great investment at any cost. There are times when our favourite companies are selling at low prices and times when they are over priced. We focus on buying great companies when they are selling at a discount, when they are temporarily out of favour and unloved, or at times when the overall markets decline.
Our focus is to avoid the greatest risk of all, that is, the permanent loss of capital. The companies that we invest in are not speculative and have a very low probability of disappearing. We do accept, and on many occasions welcome market declines and when they decline, we typically buy more of our favourite companies at discounted prices.
Investor Temperament and Psychology
While investment strategy is critical to investment success, investor temperament and emotional control are just as important. Without emotional control, investors panic and sell in crashes and get seduced by rising prices and buy in bubbles. This behaviour has caused booms and busts in the past and is likely to do so in the future. At AXIAM, we provide the advice and emotional support our clients need to respond in the correct manner during both market declines and bubbles. Understanding your investments and emotions is the most empowering thing that can happen to you and your money, ensuring your actions, expectations and results are aligned.
Our blog is designed to share investment strategy and insight into investor temperament and psychology.