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ISA investors following the Fire style are accepting higher risk with the goal of attaining higher returns over time. This strategy requires a higher risk tolerance and the willingness to accept significant volatility in share prices.
But it also opens the door to potentially game-changing returns…
So, what makes this latest Share Advisor stock pick so exciting?
- It’s one of the world’s largest asset managers that provides a proxy for exposure to a wide variety of asset classes.
- The business has immensely cash-generative operations that provide the firepower for steady M&A, which has expanded the group well beyond its core fixed income business over the years.
- It has a founder-led management team that has not only survived previous financial crashes but also used them to the company’s benefit by making opportunistic acquisitions when others are at their weakest.
As our Senior Investment Analyst, Ian Pierce, puts it:
“Management has built the business into an industry giant that despite managing a hard-to-fathom $14trn in assets has grown sales by double-digits in three of the past five years, and has a compelling plan to grow sales by nearly 50% by 2030.”
Ian Pierce, Share Advisor
Of course, there is risk.
The financial services sector is always evolving. That means management needs to keep its fingers on the pulse of what investors want and continually expand the number of asset classes it can give them exposure to. Falling behind and missing, for example, the next boom in passive ETFs would be a very big headwind.
Nevertheless, with an intelligently constructed and well-diversified ISA portfolio, these risks can be managed, limiting the damage to a portfolio in case the situation doesn’t turn out as expected.
We don’t consider Fire investing to be gambling or a get-rich-quick scheme, though. We aim to be long-term owners of these businesses and reap the rewards from their success. Our investing time horizon for these shares is measured in years and decades, not weeks and months.
