Arch talk.

What a difference a year makes !

Hi and welcome to today’s arch capital update. Today our topic is “One year on: what do markets look like and what was our role during the covid crisis and now”.

This chart here is showing the recovery of all major markets from this time last year to today. We can look at Australian shares, their drawdown was 39% and they’re rebound was 65%. Small companies were down 42%, and up 90%. Global shares were down 36%, and up 74%. Now that’s obviously from the bottom to the top. But the main story there is that if we, in any event like what we’ve just been through, if have a robust philosophy we can have confidence in it and we can stick to it and we’ll be okay.

This ended up being the shortest bear market ever. We didn’t know that this time last year of course, but if you recall our videos, we’re saying hang in there, even think about rebalancing. Of course, we didn’t know what the future looked like, but we just knew that we had the confidence in our process.

So, what we want to really achieve for all clients is that number one: clients come first, the portfolio for you is the one that suits you the most, the one that you can stick with. We want to give you peace of mind, security. We want to make sure that there’s confidence in our process and you’ve got confidence in your investment allocations. We want to make sure that we’re maximising returns but we’re doing that through science, using evidence. We’re not using guesswork to maximise your returns. But we can show from the evidence that we do maximise returns and reduce risk through our process.

We also want to make sure that the expectations are really clear about what to expect in markets and what we can control. Can we control market returns – no we can’t. But we can control the process, we can control the asset allocation, we can control your exposure to certain parts of the market, we can diversify, and we can reduce costs. What this leads to for outcomes is that for all clients our big objective is obviously with the investments we want great returns.

We want:

  • great returns
  • reasonable costs
  • to make sure that you’ve got certainty and reliability

We want to make sure that over the next 20-30 years that we’re helping you – hopefully longer – that you know you’ve got certainty in our process and that the investments we use for you have got the absolute best chance possible of giving you that reliability now to maximise returns and give you the income or the security you need in retirement.

So, thanks for listening.


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