Invesco Canada blog

Insights, commentary and investing expertise

Jeff Hyrich | May 23, 2012

Lessons from the super-rich

When investors or advisors ask Erin and I to explain the rationale behind our investing style, I point to the super-rich.

Think of the wealthiest people in the world. I mean the people in the world who regularly top the “rich” lists in popular magazines. I often think about them and how they got to that level of wealth.

Bear with me a minute while I explain.

First, in most cases they don’t own 80, 100 or 150 different businesses. They probably own two or three businesses or concentrate their wealth in a single endeavour.  That’s similar to what we do in our funds. We’ve concentrated our best ideas in about 25 or 26 holdings in both Trimark Global Balanced Fund and Trimark Global Endeavour Fund.

Second, wealthy people tend to hold businesses for a long time. They don’t flip in and out.  They don’t start with a hairdressing salon, sell that and open a coffee shop, then sell that three months later and open a McDonald’s. The wealthiest people out there often own a business for 20, 30 or 40 years.  That’s basically what Erin and I are trying to do, and what the Trimark discipline is all about. We don’t flip stocks due to boredom or short-term views.

If you look at the way we manage the funds, we’re trying to manage it in the same way as people who have methodically built fortunes.  We want to own quality companies and we want to own them for a long time.

I’ve said this before, but it bears repeating: It’s people’s savings we’re dealing with, not just numbers or blips on a screen. Whether it’s for retirement or kids’ education, we’re very aware of the awesome responsibility we’ve been entrusted with.

 

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