InvestNow News 8th Nov – AMP Capital – Investing for long term wealth creation
16th Oct 2019 – Andy Gardner – Investment Manager, Global Equities – Equities Sydney, Australia
Long-term fundamental investing is more connected with the real world than the world on our screens. It is focused on aligning with the longer-term trend rather than speculating on the fluctuations around it. In this first instalment of a three-part series, we take a big-picture look at investing for long-term wealth creation.
The ability to create a healthy and sustainable economic profit over and above all costs, including the cost of capital, and to continually reinvest and grow those economic profits over time is what truly unlocks the potential for enduring wealth creation. It is when those characteristics are present and married to a longer-term time horizon that the magic of compounding occurs.
AMP Capital’s Global Equities team time horizon is genuinely long term, in line with our 5-year expected holding period (hopefully much longer for many of our companies). This is counter to the short termism trend in markets, where holding periods are now measured in days or weeks, and the dramatic rise in quantitative and factor-based investing has merely served to reinforce this myopic focus.