Index Fund & Stock Select Philosophy Explained
You decide :- How much money you want to invest
- How you want to invest
- How long your funds will be committed for
Index Fund
Most private investors tend to stick equity index funds, largely because of factors such as:
- Low confidence
- Lack of experience
- Little or no education
- No time to dedicate to attain any level of meaningful understanding
When adopting an Index fund approach, investors have the benefit of a broad selection of equities and bonds on offer. The objective of an index fund is to track and endeavor to outperform its benchmark index, perhaps the S&P500. Funds Generally:
- Have low operating costs
- Expose the investor to lower risk due to a wide range of securities which can be included
- Can be considered tax efficient due to the level of activity within the fund
Stock Select
A stock select approach permits an investor to have that much more control over the performance of a portfolio. All funds have performing securities; however, the fund will also have many underperformers hindering the result of the fund. If those underperformers happen to be large weighted stocks, this can seriously impact a fund’s annual performance.
Therefore, adding a stock select approach to your overall philosophy will permit for greater upside, boosting year-end performance and when you think about it; in essence, will also reduce levels of associated risk due a more considered point of entry and emphasis on a price target for exit.
Our specialty is in identifying high quality growth companies before they are recognized by the broader market. Entering and exiting on this basis, ensures profits are taken at the most opportune time and within a much safer environment given we are acknowledging expected changes in market conditions.
We design & develop products we collectively feel at Sigma Holdings Limited will offer continuity in performance, permitting us to maintain and enhance our market competitiveness, ensuring customers continue to choose Sigma Holdings Limited as their preferred long-term advisory facility.
We seek to identify growth companies that will directly impact and improve the value of customer’s assets held under management at Sigma Holdings Limited. You can actually see some quite delightful performances with your financial arrangements, closing each year as near to your benchmark as you can or even surpassing without extending investor risk.
Experience superior financial performance...
With a more considered and passive manner to entry of investor capital results in being able to reduce our exposure to any market downside potential, allowing us to help customers further preserve capital whilst growing capital at a more respectable rate of return.
This offers investors the ability to experience superior financial performance whilst also managing to provide progressive external results, like taxation and estate management, all to make sure that we are acting in the safest manner possible in the best interests of our customers. This ensures investors are able to keep-up and keep pace with an evolving economy, countering market movements in investor favor, developing portfolio performance and permitting superior performance.
Our philosophy to simply give you a better chance of achieving a more reasonable performance simply by employing a more considered and so responsible approach to point of entry while mindful of our pre-selected targets for perfected exit.
We simply see goals as dreams with deadlines, whether it be lifestyle, retirement or legacy. Our satisfaction is hearing people living life on their terms, as they choose. As financial architects, we feel if you can imagine it, we will make it happen for you!
Stock Select Criteria
When a specific stock security is being considered, it is usually for compelling reasons, perhaps, a pricing catalyst or near-term event set to move the stock to higher levels:
- A Product Launch
- Earnings Report Release to Market
- Merger or acquisition
- Public offering
Factors such as these will encourage the investor to look for a point of entry. Equally, the investor is better off having a full trading itinerary, including predetermined points for exit. The idea is not to chase every point the market offers, yet enter and exit responsibly, removing all sense of emotion from the decisions required. Ultimately, when we make that decision to purchase a position, we must understand why we are entering at that given point and under what conditions are we then willing to release and sell the security.
When the investor acts it must be with the mindset of supporting the overall investment philosophy, with the view to bringing balance and harmony to asset structure. Every year we see certain stocks outperform its industry, sector and on occasion the broader market itself. By investing in the best performers you are giving yourself a far wider possibility to beating your overall approach to investor annual target benchmark.
When selecting specific stock, typical criteria to be considered within industry, sector and the overall macro-economic status:
- Does the stock security own the patents or intellectual property rights to a proprietary product or service?
- Is the company run by a solid board of managers with a proven track record of success?
- What is the historical pricing history of the stock?
- Does the company have the ability to generate greater future earnings?
- How strong is the company’s balance sheet and bottom line?
If you would like to learn more, contact one of our advisors today
Investment Services Open an accountusing our online eApplication form eApplication
Contact Us
Sigma Holdings Limited
Head Office
One International Finance Centre
1 Harbour View Street
Suite 2903
Central, Hong Kong
Tel : +852 5808 1270