Forager’s investment approach works best for investors who think the same way as we do.If you are considering investing with us you should understand value investing, have a long investment horizon and high tolerance for volatility.
If you meet those criteria and think we can help, you still have a big decision to make: what is the right percentage of your portfolio to invest with Forager?
To be clear, we are not financial advisors and even if we were we don’t know enough about you to give you financial advice. But here is some information to help you and or your financial advisor think about our role.
1. Get your asset allocation plan right
Step one is to have a plan. It doesn’t need to be complicated or sophisticated but you need to sit down and come up with an asset allocation plan that suits your personal situation. Short (0-5 years) term liquidity needs like living costs and holidays in cash and term deposits. Medium term requirements in bonds and other safer assets. Long-term assets in high returning asset classes like shares. Again, this is not our area of expertise. Either seek advice or peruse lots of the free online guides on the topic. Your aim should be to complete a table that looks something like this:
2. Find Forager’s role in that portfolio
Once you have your asset allocation plan, you should have some target weights for Australian and International equities. This is where Forager potentially comes in.
Forager’s role in that equities portfolio can range between zero and a significant portion, depending on the portfolio objectives and your own preferences, investment horizon and risk tolerance.
Any potential investor should have a strong philosophical alignment with Forager’s value investing approach. Understand that we buy businesses, rather than predicting share prices, and agree that this is a logical and successful way to invest. If that isn’t you, you have found the wrong fund manager.
Even among those philosophically aligned, however, there are important things to think about when contemplating how much to invest.
This table provides some indicators as to where you might fit on the spectrum.
3. Stick to it
It has been well documented that the average investor gets worse results than the average fund. Mostly this is a result of buying in at the top and then panic selling at the bottom.
My experience over the past decade is that Forager investors don’t make that mistake. They do make the mistake of being too clever on the entry point though. Many of them fellow value investors, they are always waiting for the coming crash before they invest their money.
For the most part that has been an expensive mistake. Once you have decided on the right asset allocation, our recommendation is not to faff with it. While it is not hard to find evidence after the fact, there is very little evidence that anyone can consistently and repeatedly predict market crashes.
There is a strong case for being invested in equities over the long term and if you can find a fund manager who does a bit better than average, the case is even stronger.
GENERAL ADVICE WARNING
The information provided is general advice only, and has been prepared without taking into account your objectives, financial situation or needs. You should therefore, consider the appropriateness of the advice, in light of your own objectives, financial situation or needs, before acting on the advice. The Trust Company (RE Services) Limited (AFSL 235150) is the issuer of the Forager Australian Shares Fund (ARSN: 139 641 491). Fundhost Limited (AFSL 233045) is the issuer of the Forager International Shares Fund (ARSN: 161 843 778). You should obtain the Product Disclosure Statement (PDS) relating to the product and consider the PDS before making any decision about whether to acquire the product. You can obtain a copy of the PDS at www.foragerfunds.com. The Trust Company (RE Services) Limited, Fundhost Limited and Forager Funds Management do not guarantee investment performance or distributions, and the value of your investment may rise or fall.
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