three types of assets in your portfolio

Brett Alegre-Wood
April 11, 2012

3 rulers of investment,

I was listening to a talk by the National Asset Management Agency (NAMA) from Ireland. They are the company tasked with managing the 72-billion euros of loans that were provided by Irish banks that subsequently went bad.

It was before the talk that the speaker, Ronnie Hanna, was telling us about some of the assets that made up the portfolio.

At this stage the pre-lunch drinks had kicked in so the conversation was fluid and the energy was great.

Ronnie explained some of the great purchases, the assets that he was having no problems selling because the numbers stacked up every day of the week.

He then explained that a lot of assets had been bought because the buyer lived in the town, and even though it didn't seem to make financial or town planning sense they had bought land, pushed to rezone it as residential and build small towns.

Ronnie then mentioned a few of the other assets that were part of the portfolio but didn't really fit as an investment, a Cannes waterfront property, a W1 postcode, a Piccadilly commercial property…

One of the attendees said ‘So what you are saying Ronnie is that three types of assets are in your portfolio – those bought with the head, those bought with the heart and finally (excuse the coarseness) those bought with the penis.

We all had a laugh but the thought stuck with me because so many people I see start off buying from either their heart (I want to buy close, I want to go see the property, I want it in a nice area…) or those ruled by their penis (I only want W1 postcode, Chelsea, Westminster, it has to be iconic…) but eventually most people move to buying based on their heads.

Buying with your head means you are a numbers investor and this almost guarantees you a return.
I wouldn't mind betting that if these people who lost their entire portfolios in the crash had just stuck with ‘head' investment decisions, they probably would have been here today.

So if you need help getting the numbers straight in your head and you want support and discipline to stay away from the ‘other head's investments', and at the same time controlling the heart, why not give the team a call today on +44 (0)207 923 6100.

Live with passion,
Brett Alegre-Wood


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