Experience in good & bad cycles, adaptable to changing global orders with ability to innovate, technological adherence, process mapping & implementation and the ability to look beyond the temporary and short-term volatility are the 5 Attributes to select your PMS.
Rather we can correct the sub-topic as “selectively-saintly”. Human contradiction between the brain & the heart, are very difficult to fathom, however, it is common for all to revolve around the current/short-term economic situation. PMS Managers are not exempt from the Euphoria and depression. Only a seasoned (rather saintly) PMS Manager, can look beyond the horizon and calculate the probability of the change in macro as well as micro economic scenario. If your PMS Manager’s psychological dispositions are matching with your perceptions, why at all you need him ?
Macro-economic and geo-political situation are too cumbersome to evaluate, especially in the investor’s perspective. Only a forward looking PMS Manager has the ability to manage risks rightly.
An experienced doyen in the Wall-street shared his experiences with us. Once during the trading cycles, when he reviewed his trades for a given period, he found his profits are considerably lesser than his contemporary. He had programmed his contemporary’s “trading-software” (using the same algorithm he had perfected). On further scrutiny, it was revealed that, while the software followed the algorithm exactly, he himself had deviated from his-own-algorithm, several times. He realized then that his emotions superseded his technical knowledge, while the software did not have any emotion.
The inference we draw from his experience is that, it is better to set process based investment style. More importantly once the process is set, implementation has to be with perfect commitment to the process. PMS Managers are not immune to emotions; even minor ripples in the economy are likely to affect the performance of the PMS portfolio, very badly, if the implementation involves human emotions.
Hence, select a PMS, which employs different skills at various implementation levels.
On perusal of various PMS implementation processes, we found, the PMS companies, which periodically upgrade their platforms according to the technological advancement, perform better than their peers. If not the PMS Manger himself, there is at least one such technical-savvy team member in such PMS companies.
Though the innovations of the strategies are the human brain-child, filtering-out odd-man-out from the gamut of listed entities can be very difficult without the technological support of the modern day machines.
Hence, look out for technological adherence in the PMS Company.
Many leader-stocks of the previous Bull-cycle are unknown names in the current cycle. We witness newer companies with newer Business model emerge every-day. Hence, continuous process of innovation is required, in order to match the changing scenario.
Consider, for example, the current Geo-political and tariff wars. Globalization is losing favor with many countries replaced by protectionism; hence domestic consumption stories may be replacing global presence. PMS Managers need to innovate their strategy and themes to benefit from the changing order.
The newer strategy should work for a reasonable period and perform through various market cycles. It is important, because, the strategy of the PMS cannot be changed.
Hence, look-out for innovative strategies – which can work for the full term of your investment.
Even an amateur makes money through investments in short cycles, but, it is the consistency and risk-minimization, which needs professional acumen. PMS Managers having longer experience would have sailed through various cycles.
It is astonishing to note many PMS Managers have such long-term experience in financial markets. One need to scrutinize the “exact” nature of the “financial-market” PMS Mangers display in their resume.
We find many PMS schemes boast beating the bench-mark by sizeable percentage during the good-times. It is the “draw-down” figure during the bad-times, that tells the real nature of the PMS Manager, whether he can nurture your wealth or not.
Hence, study the bad times more intently to select your PMS
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