When choosing which smartphone to purchase, you wouldn't simply select the one with the flashiest colour. Instead, you'd compare the battery life and processor speed (quantitative), and read reviews of the brand's customer service and construction quality (qualitative).
Similarly, creating a wealth-generating investment portfolio demands the same discipline as evaluating smartphones, but on a significantly greater scope. A process, institutions such as Shriram Wealth deploy with vigour.
The Two Pillars of Wealth Creation
At Shriram Wealth, we employ a dual screening process to separate the winners from the noise of the stock market. This process includes both quantitative and qualitative screening to provide you with the most disciplined financial decision-making possible.
Two Lenses Through Which to View Investments
There are two lenses through which to view investment opportunities:
1. Quantitative Screening: The Numbers
The first lens is quantitative. It involves scanning thousands of options based on numbers. It allows us to immediately determine companies with the best financial strength. Our quantitative screen looks for the following characteristics, among others:
- Consistent profit growth (five years or more)
- Low debt/equity ratio
- High Return on Equity (ROE)
This quantitative screen is entirely data-based; therefore, it eliminates emotional bias during the initial evaluation and focuses solely on those assets that demonstrate value through objective metrics.
2. Qualitative Screening: The People Factor
Companies are not just numbers on a spreadsheet. After narrowing down the list of potential investments based on quantifiable metrics, it moves into a qualitative review. While numbers inform us as to what has transpired, qualitative research informs us why it occurred. A company may be profitable now, but will it endure a downturn?
To answer this question, the experts examine:
- Integrity and vision of leadership
- Competitive advantages ("moats") held by the company
- Level of corporate governance and adherence to ethical practices
In addition to reviewing spreadsheets and analysing financials, we assess the business model's viability for sustained success.
Why Does This Matter for You?
Ultimately, this systematic process protects your capital. Retail investors often lose money due to "hot tips" or "gut" decisions. Conversely, institutionalised research affords a reasoned plan to guide you.
Additionally, by utilising both of these types of screens concurrently, we increase your potential returns while minimising your risk exposure. As such, we believe that disciplined research is the driving force behind achieving wealth. You might be lacking the skills, the resources, or the time to undertake such research.
By taking advantage of Shriram Wealth's research process, you'll have the peace of mind knowing that your wealth is driven by choice rather than by chance.
You can be assured that it is grounded in a scientifically-proven methodology. Experts with experience help you build wealth while avoiding experimentation.
