WESFIN Independent Insurance & Investment Brokers
Independent Insurance & Investment Brokers
FSP Nr. 4852


Collective Investments


At WESFIN we believe that portfolio construction should follow three steps:

  1. Establish the risk profile of the investor. The investor's risk profile is influenced by a number of factors that are not at all subjective.
  2. Decide on an appropriate asset allocation split for the investor. The investor's risk profile determines the asset allocation of the portfolio. The split between asset classes significantly influences the risk of the investment.
  3. Select suitable funds within each asset class.


Asset allocation serves to diversify risk through the selection of uncorrelated assets. Studies show that asset allocation is the single most important decision influencing investment returns over the long-term. Asset allocation should be reviewed annually. If required must then be rebalanced to remain within asset allocation guidelines. The asset allocation within the foreign component of the portfolio should be diversified across the same asset class bands as used for the local allocation.

Definition of investor risk profiles :

A conservative investor requires stable investment growth or a high level of income. The primary investment goal is capital protection. This investor may require access to the investment within three years.

A cautious investor requires stable growth in his/her investment and is uncomfortable when investment values decline. The investor may require a moderate level or income and is likely to have an investment horizon of three to five years. The primary investment goal is capital protection.

A moderate investor invests for the longer term (five to seven years) and requires no income. The investor can tolerate fluctuations in the value of his or her investment from time to time. The primary goal is capital growth.

An assertive investor invests for the long term (at least seven years) and requires no income. Typically, this investor is prepared to accept more risk than a moderate investor, but does not want full exposure to equities. The primary investment goal is capital growth.

An aggressive investor invests for the long term (at least ten years) and seeks the highest possible growth. Typically, the investor is prepared to accept substantial fluctuation in the value of his or her investment. The goal is long-term capital growth.


Investment Principals

          When considering investments, the principles below can be considered a good summary (by an external           source) of what one should generally bear in mind. We thought of sharing them with you.

  1. Outperforming the market is a difficult task. The challenge is not simply making better investment decisions than the average investor. The real challenge is making investment decisions that are better than those of the professionals who manage the big institutions.

  2. Invest – don’t trade or speculate. The stock market is not a casino, but if you move in and out of stocks every time they move a point or two, the market will be your casino. And you may lose eventually – or frequently.

  3. Buy value, not market trends or the economic outlook. Ultimately, it is the individual stocks that determined the market, not vice versa. Individual stocks can rise in a bear market and fall in a bull market. So buy individual stocks, not the market trend or the economic outlook.

  4. When buying stocks, search for bargains among quality stocks. Determining quality in stock is like reviewing a restaurant. You don’t expect it to be 100% perfect, but before it gets three or four stars you want it to be superior.

  5. Buy low. So simple in concept. So difficult in execution. When prices are high, a lot of investors are buying a lot of stocks. Prices are low when demand is low. Investors have pulled back, people are discouraged and pessimistic. But if you buy the same securities everyone else is buying, you’ll have the same results as everyone else. By definition you can’t outperform the market.

  6. There’s no free lunch. Never invest on sentiment. Never invest solely in a tip. You would be surprised how many investors do exactly this. Unfortunately there is something compelling about a tip. Its very nature suggest inside information, a way to turn fast profit.

  7. Do your homework or hire wide experts to help you. People will tell you investigate before you invest. Listen to them. Study companies to learn what makes them successful.

  8. Diversify – by company, by industry. In stocks and bonds, there is safety in numbers. No matter how careful you are you can neither predict nor control the future, so you must diversify.

  9. Invest for maximum total return. This means the return after taxes and inflation. This is the only rational objective for most long-term investors.

  10. Learn from your mistakes. The only way to avoid mistakes is not to invest – which is the biggest mistake of all. So forgive yourself for errors and certainly don’t try to recoup losses by taking bigger risks. Instead, turn each mistake into a learning experience.

  11. Aggressively monitor your investments. Remember no investment is forever. Expect and react to change. And there are no stocks that you can buy and forget. Being relaxed doesn’t mean being complacent.

  12. An investor who has all the answers doesn’t even understand the questions. A cocksure approach to investing will lead, probably sooner than later, to disappointment if not outright disaster. The wise investor recognises that success is a process of continually seeking answers to new questions.

  13. Remain flexible and open-minded about types of investment. There are times to buy Blue-chip stocks, cyclical stocks and convertible bonds, and there are times to sit on cash. The fact is there is no one kind of investment that is always best.

  14. Don’t panic. Sometimes you won’t have sold when everyone else is selling and you will be caught in a market crash. Don’t rush to sell the next day. Instead, study you portfolio. If you can’t find more attractive stocks, hold on to what you have.

  15. Do not be fearful or negative too often. There will, of course, be connections, perhaps even crashes. But over time our studies indicate stocks do go up… and up.. and up. In this century or the next, it’s still “Buy low, sell high.”


The information contained in this document is provided for information purposes only and to assist the financial intermediary to submit an investment proposal to the client and should not be construed as the rendering of investment advice to clients. Glacier Financial Solutions (Pty) Ltd accordingly accepts no liability whatsoever for any direct, indirect or consequential loss arising from the use or reliance, in any manner, of the information provided in this document.

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