Biography
David joined NZ Funds in 1997 and today oversees the investment management of the Growth Portfolios. David previously worked at J B Were as their chief economist for three years. Prior to that David worked at the Reserve Bank of New Zealand for 10 years.

Approach
I have spent over twenty years as an Economist and Financial Market Participant. Over this time I have seen that too much time has been spent trying to forecast the future, whether it be economic, company or financial indicator forecasts. Too often I have been asked where I think the currency will go next week. Good investment management is not about good forecasting. No one individual or organisation will be able to consistently forecast the future. You also have to ask yourself even if they have been successful in the past, what will happen if they get it wrong?

In my view good investment management is about correctly defining the objectives and then careful implementation of the portfolio consistent with those objectives. Diversity is important but that in itself means the portfolio will not always be fully invested in the best performing asset. It is important to remember that for most people investing is just the means to the end. Money is invested so we are able to meet our lifestyle or legacy objectives at a later point in life. It is therefore crucial that the portfolio in constructed in such a way that it can adapt to the future.

The best guide to the future can be in understanding the past. Knowing that all asset classes will go through periods of enthusiasm and periods of being out of favour. A well constructed portfolio should have strategies in place for both of these periods. That may mean that it doesn’t necessarily make sense to always own a particular asset or asset class.  

However it is also important that the portfolio can deal with the unknown. This is where risk management becomes important. Building a good portfolio is like building a multi- storey building, it is important that it has smoke alarms, water sprinklers and fire escapes.