Challenge and opportunity
For most, their investment horizon will be for the very long-term - the rest of their lives. To achieve a sustainable outcome, we must pay particular attention to the two evils of investing; taxation and inflation.
Inflation and tax greatly alter an investor’s return.
Our investment approach must be carefully managed in order to provide sufficient return from investments to account for these evils and still meet the client’s needs. At Redwood, our unique combination of strategic and analytical investment expertise allows us to tackle both evils head-on.
A strategic focus on tax should allow us to manage and minimise the impact of tax on investment outcomes. Considering this, we ask, “Why do people spend a considerable amount of time and effort trying to generate returns, only to pay a greater proportion of those returns to the tax man than they need too?”
While tax is a necessity, it is one of the evils of investing. We should all pay our fair share. However, no more than our fair share.
At Redwood, we understand that every transaction has a tax implication. Our tax knowledge, good long-term planning and management will most often result in better after-tax investment outcomes.
We are focused on achieving outstanding after-tax returns.
Understanding and planning for tax when considering, personal, investment and business transactions will allow us to either invest for a lower before-tax return (thereby taking less risk with our capital) or take a similar approach to investing and enjoy the benefits of a higher after-tax outcome.
In order to combat inflation, it is important that we invest a reasonable allocation of our capital in growth assets. These assets must be capable of growing their earnings at least in line with inflation, delivering us growing dividends and driving increased valuations.
In essence, Tax and Inflation management are the key to successful asset and portfolio management.