The CARE Investment Philosophy

Most clients have a goal to retire in style with full financial freedom.

The CARE investment philosophy has a fundamental outlook of protecting and growing our clients’ wealth while avoiding the mistakes, pitfalls and traps of losing money. The CARE investment philosophy has been strategically designed for implementation with a select few, high quality Australian investment providers to simplify the implementation, enable transparency and combine low cost with high quality for our clients.

The CARE investment philosophy – CARE is a simple and an easy way to communicate with clients about investing.

CARE is a combination of the types of investments strategically selected to help our clients. It stands for Core investments, Active investments, Reserves and Enhanced returns.


Core investments are the foundation of any CARE investment portfolio. The assets in Core are structured to match our clients’ risk profiles. Core uses a combination of exchange traded funds (ETFs) and fixed interest fund managers to help your clients gain exposure to the investment market and give them access to literally thousands of different companies.

Active investments offer your clients a tactical blend of Australian shares, global shares, emerging markets, global small companies and gold. The combination is designed to smooth out the volatility of each sector to provide your clients with a nice consistent return overall.

Reserves is the risk management part of the portfolio where we set aside up to four years of cash reserves, depending on your clients’ income requirements. A good Reserves portfolio together with a Core and Satellite (Active and Enhanced Returns) investment approach means we get dividends paid into our Reserves portfolio from Core, Active and Enhanced Returns. The dividends provide a good buffer to confidently continue through adverse market circumstances that can last up to 10 years in some cases.

Enhanced includes a direct Australian share portfolio made up of blue chip Australian companies (such as the big banks, mining companies and other large companies). Investors also have the option of investing in an international share portfolio with a specialist manager.


Fundamental to the CARE Investment Philosophy is what is known as the Dalbar Study. The original Dalbar study was conducted between 1980 to 2000 in the USA on the top 500 US listed companies. The study found that the average return over that 20 year time period for the 500 companies was a 12% return. Do you know what the return was for investors over the same period? It was around 4% over the same 20 year period! That’s a poor average investor return. The number one reason for the 8% difference was bad investor behaviour. See the Dalbar emotional rollercoaster schematic below.

The Dalbar study found that the average holding period by investors who said they were investing for the long term was just over 3 years! Those investors made bad short term decisions based upon events happening in the world at the time. That’s why the CARE investment philosophy was designed – to stop investors from blowing up money, to prevent bad investment decisions being made in down markets and to stop the dangerous Dalbar cycle that destroys the wealth our clients have worked so hard to create.

Are you interested in an excellent investment philosophy that protects your investment future?

Stuart Long – Associate Adviser