Scott Carmichael

In the face of ongoing market volatility, Scott Carmichael, founding partner and investment adviser at Australia’s leading private wealth and investment advisory group, Escala Partners, is reminding investors that this isn’t a new phenomenon but part of a familiar cycle.

“Market volatility today is no different to any other upheaval over the past few decades,” says Carmichael. “What sees investors through these times is following the golden rules – long-term investment in high-quality, diversified assets across, and within, asset classes.

“That is the way for long-term outperformance. The risk of short-term underperformance comes from making the wrong decisions at the wrong time, that is making emotional, behavioural type decisions.

Carmichael’s investment commandments include steering clear of speculation, avoiding concentration risk and having a deep understanding of personal liquidity needs, income requirements and a clear view of the client’s family circumstances. “Investment planning goes hand in hand with succession planning around the type of assets that families have,” he adds.

One principle he lives by is the “4 per cent rule” or its inverse which is multiplying your annual living expenses by 25 to determine the corpus required for retirement. “The rest of your portfolio basically runs for free,” he says.

Ben James, fellow Escala co-founder and investment adviser, echoes Carmichael’s focus on fundamentals. He notes that valuation metrics are notoriously difficult to use as timing tools. “Timing getting in is hard, but timing to sell is even harder,” says James. “In periods of volatility like we saw in April, we reflected on our long-term rules to stick with high-quality investment managers, let capital compound, use asset allocation as your key defence and trust the process.”

Both advisers emphasise the dual role they play- not just guiding portfolios but providing emotional counsel during market swings.

“Advisers often act like psychologists,” says Carmichael. “We need to make sure that we’re communicating in both good and bad times, and stress-testing our client portfolios.”

That means asking clients tough questions like, “How would you feel if you faced a 20 per cent correction?” and ensuring portfolios are structured to survive those scenarios.

For Carmichael and James, the message is clear: in a world of unpredictable markets, discipline, communication and a robust strategy trump any crystal ball.

Ends

Media contact

Simrita Virk, Capital Outcomes

simrita@capitaloutcomes.co

About Escala Partners

Founded in 2013, with offices in Sydney and Melbourne, Escala Partners is a premier private wealth investment and advisory group dedicated to delivering sophisticated, high-quality investment solutions to high-net-worth individuals, family offices and institutional clients. The firm is committed to providing objective and tailored investment strategies, leveraging deep expertise and innovative technology to create long-term wealth for its clients.

Discover more about Escala:  https://escalapartners.com.au/

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