I’ve worked with some great wealth managers over the years. Everything I know about building portfolios, I learned from them. I realised that a lot of considerations one should take into account when building a portfolio are the same when a leader is building a team.
When building a portfolio for long-term investment, there are investment styles that fit your attitude to risk and allow you to meet your goals with a high probability for success. Similarly, there is a ‘magic’ combination of personalities that will work well together, perform under pressure & take your company/brand to new heights. There are a few other factors which contribute to the success of both, which I discuss below.
The ‘perfect’ portfolio is one which keeps you on target to achieve your goals without abandoning your strategy at the worst possible times (market volatility). It is prepared for all potential economic environments, but committed to none. Similarly, a solid team is clear on its goals and where its energy should be directed. Communication (in all its forms) is key: it builds on the premise of honesty & transparency, especially across diverse teams.
Every team member should be clear why they are part of the team & what they are expected to contribute, based on their skill set & area of expertise. Your team needs creatives, strategisers, networkers & planners. In the same way, if you are investing, you should be clear on why you are picking a particular investment and what part you expect it to play in your overall wealth strategy.
Use periodic rebalancing to take advantage of ‘reversion to the mean‘. Rebalancing your portfolio allows you to benefit from volatility and contrarianism in the market: you sell some shares of the winners and plough the gains into the lower performers and/or put new cash into investments that earned lower returns.
The same tactic applied to business allows you to consider new additions to your team. What perspective could your administrative assistant offer? If (s)he’s dealing with your clients & customers on a daily basis, you might get some great insights and ideas. If you have a high performing team member, could you assign them to lead a new team? This will set them on a new learning curve and keep them engaged.
In essence, the key to a good portfolio & a good team is the balance of diverse but complementary elements, active management, a clear vision & concise communication.