Expert's View 名家觀點


十一月 21 , 2015  


Three Priorities of Investing

by Charles Cheng, CFA – Clarity Investment Partners
鄭又銓, CFA -可承資本

Approaching the end of 2015 major investment markets around the world have had mixed results for the year, and likely so have most investment portfolios. Around this time banks, brokerage houses, and newspaper columnists start to issue reports and presentations about their outlooks and investment advice for the upcoming year. As we look to make major investment decisions in the future, how much should we take into consideration how much we gained or lost in the past twelve months, or what brokers say going to happen to the world in the near future? Frankly, not very much at all.

First, market returns are completely independent of decisions you made in the past. As for external advice and forecasts for the upcoming year, while some of the information and analysis can be useful, they do not account for random and unpredictable events that can have a sizable effect on your portfolio.

Instead, one should focus on getting the strategic aspects of their portfolio correct before spending too much time on the tactical decisions. To do that, make sure that the following three areas are well covered in your investment process:




1) Make your first priority to control risk.

While we all know that a higher returning asset “should” typically have higher risk than a comparable lower returning asset, as we discussed in our last note, taking lower risks are the key to stronger long term portfolio returns. Because of the mathematics of compounding, if a portfolio of assets falls by -33%, it takes a +50% gain to recover to its original value. If assets fall by -50%, then it takes a +100% gain to recover. This is in addition to possibility of forced selling by the investor either because of margin calls or psychological pressures, which would result in a permanent loss. Therefore, limiting draw-downs is absolutely crucial to the compounded long term growth of assets.

Based on our professional experiences and studies, we have healthy respect for market tendencies to reach extremes, and seek to build portfolios that can weather periods of market turmoil. This means maintaining a reasonable level of diversification, as well as consideration for one’s personal limits on tolerating market movements.


雖然我們都知道一個高回報的資產 “應該” 比低回報資產具有較高風險,然而根據我們上一期的觀點,承擔較低風險其實是獲得更穩定長期組合回報的關鍵。由於數學的複利原則,如果一個投資組合的資產下跌 33%,那麼它需要漲幅達到50%才能恢復到其原始值。如果資產跌幅達 50%,那麼它需要一個100%的漲幅才可以收回本金。雪上加霜的是,有時投資者因補倉通知(margin call)或心理壓力等因素被迫平倉從而導致永久性損失。因此,限制跌幅是對資產長期的複利率增長絕對至關重要的。

根據我們的專業經驗和研究結果,對於市場走向極端的趨勢,我們抱與審慎的態度,並以此構建可以抵禦市場動盪時期的投資組合,也就是多元化的投資, 參考個人財力對市場變化的容忍度,以確保我們的投資組合不會為了贏取一點額外回報而處於不必要的風險中。

2) Focus on total asset returns rather than individual trades.

A decent return on an entire portfolio beats an exceptional return on a fraction of the portfolio. Gaining 50% on investment originally 5% of the portfolio while neglecting the other 95% in cash, only results in a +2.5% on capital. Before you ask why we couldn’t have allocated that investment to 100% of the portfolio, bear in mind that a) extraordinary investment opportunities do not come about frequently, and b) an investor is generally considered skillful if he is correct 60% of the time. An investment that can gain +50% if you’re right, can easily lose -50% if you’re wrong. By our principle number 1, it is important to avoid becoming too concentrated in a volatile investment.

A common behavior for many private investors is to take great investment risks with only a small portion of their total assets while holding the rest in deposits, thinking that they’re only risking that smaller portion. However, this actually increases the risk of them having a permanent loss, versus a portfolio of lower risk assets, as there would be a greater chance that are forced to or scared into selling the risky investments at an unfavorable price. Instead, it is a much more sensible sustainable approach to utilize a larger amount of capital in consistent and less speculative investments to achieve the same value of return or higher. Ask yourself how much your portfolio, as currently constructed, has returned in the past and under what market environments, as well as how much it lost in times of market stress.


整個投資組合獲得一個良好的收益,勝過小部分資產獲得的優異回報。如果從整個投資組合中拿出 5%的資產進行投資並獲得 50%的回報,而同時剩下 95%的資金作為現金不投資,這樣對於整體資產來說僅僅是 2.5%的增幅。 在你問到為什麼我們不把 100%的資產配置到那個極佳的投資機會之前,請記住以下兩點: a) 特別優質的投資機會並不時常出現; b) 如果一個投資者的正確概率能達到 60%,那麼他已經算是公認的投資能手了。一個回報 50%的投資機會,如果你看準了,那麼你將獲得 50%的收益;而相反如果你看錯了,那麼很輕易的你就將損失 50%的資本。參照我們的第一原則,規避波動性高的投資所帶來的集中風險是非常重要的。你可以參考你現在投資組合,在過去何種市場環境中獲得何種回報,並且在市場壓力時損失多少。


3) Independent research is the path to superior performance.

Exceptional returns can be earned occasionally when a market has the wrong expectations. For liquid securities, the quoted market prices reflect the amount a buyer is willing to pay or a seller is willing to pay that particular day- therefore, the research and opinions of the investment banks and major fund houses are generally baked into the price at which one can obtain a security. Furthermore, much of that research may be burdened with ulterior profit motives, such as commissions or corporate relationships. Therefore it follows that no one is going to consistently outperform the market by only following the views of the large institutions.



By emphasizing risk control, total portfolio returns, and having an independent view to capitalize on market opportunities, you can place yourself on the path to consistently achieving good investment performance.



Mr. Cheng is a managing partner at Clarity Investment Partners, a Hong Kong based independent private investment office that directly manages personal accounts for families and institutions.