Check-up of the existing portfolio
It is difficult to know where you want to go to without knowing where your starting point is.
To this end, prior to providing advisory services to an individual client, Panrhema will carry out a revision process, looking at the existing portfolio.
The analysis aims to:
- examine the relationship between the current portfolio and the investor’s real objectives
- quantify, in economic terms, any distortion resulting from a conflict of interests created by the system referred to above and which will inevitably make it more complicated, if not impossible, to achieve the objectives in the medium and long-term
- uncover any possible cognitive, information and emotional asymmetries in the investor’s personal life.
This process involves:
- An analysis of the economic conditions in effect
- An estimation of hidden commissions
- An estimation of the costs linked to difficulties in accessing the market
- A revision of structures and relationships
- An analysis of the level of liquidity
- Identification of inefficient and unsuitable instruments
- Consolidated report of the relationships in effect and an analysis of the critical issues
- Revision of the terms of engagement with the existing portfolio managers
- Inspection of the adequacy and consistency of benchmarks
- Comparison of the dynamic historical trends with regard to a portfolio of adequate and consistent benchmarks
Once the collaboration has begun, Panrhema will conduct its activities in accordance with the following steps:
- Risk management
The streamlining process includes:
- The renegotiation of the conditions in effect
- The creation of strategies which aim to reduce hidden commissions
- The creation of strategies which aim to reduce the costs linked to difficulties in accessing the market
- The streamlining of structures and relationships
- The creation of strategies which improve the liquidity of the portfolio
If you don’t know where you are going to, it’s impossible to get there.
The performance of the portfolio is dependent on the risks the investor is able to take. But what do we mean by risk? And in what quantity and for what portion of the portfolio should they be taken? In order to respond to this fundamental question it is necessary to thoroughly analyse the financial needs of the investor, as these will influence the choice of investments, and to consider the situation with regard to assets and finance as a whole, meaning the resources available to achieve the objectives set.
For Panrhema, planning means being able to answer the following questions:
Why am I investing?
Investments are organised on the basis of needs, because this will produce the expected results within the timeframe decided on, thus limiting the adverse effects of market volatility and safeguarding the emotional wellbeing of the investor, therefore enabling them to avoid stressful situations.
How can I protect myself from unforeseen events and from “myself”?
So-called “antifragility” elements will be included in the portfolio in order to help deal with periods of unexpected market instability and to avoid the investor being induced, for emotional reasons, to change the plan originally agreed upon.
How can I take advantage of the fact that a significant proportion of the resources available to me will exceed my needs in the short-term?
The client shall be considered to be a long-term investor, at least for the portion of the portfolio linked to the long-term objectives. This new awareness will make it possible to counter the short-term volatility of the market and to take advantage of lower prices to acquire a larger quantity of investment equality securities, in addition to obtaining performance bonuses linked to less liquid investments.
The client’s investment portfolio is continuously monitored, on a consolidated level, in order to rapidly identify opportunities to rebalance it, which can also be done tactically, with the aim of controlling the risk profile and improving the profitability prospects.
- Identify and analyse the different types of risks
- Scenario analyses and stress tests
- Design and creation of tactical protection strategies of segments of the portfolio or of excessively concentrated positions.
- Introduction of strategic protection instruments which will protect against the risk of unexpected changes in the financial plan or against the risk of unforeseen events on the markets which could compromise the objectives set being successfully met.