Curt Custard, the chief investment officer for Newton, told Investor Daily that there needs to be an ebb and flow in the markets because a correction in the markets creates value.
“It doesn’t feel good at the time, but the point of being a good investor is to invest when it doesn’t feel good,” he said.
Newton operates in Australia under the BNY Mellon brand but is a global company with a global perspective said Mr Custard.
Mr Custard said that the last 30 years have been more an anomaly than the norm but young investors don’t know this.
“I talk to people now who haven’t seen an interest rate cycle and they go ‘oh my gosh’ but go back to 1998. Look what happened then. This is what normally happens and it’s going to get worse,” he said.
Mr Custard said he told clients in the past that if you know it’s safe to invest then the prices have already adjusted and that they wouldn’t make any money.
“The only way I could say that the best way to invest is when you’re most scared. If you’re feeling good about something, that probably means there’s not a lot of excess returns to be garnered,” he said.
Mr Custard said the markets aren’t going to tank but the growth is unlikely to be replicated and those excess returns can’t keep happening.
“Everything does fall eventually. And that’s when you find companies that have sound fundamental and business models and invest in them,” he said.
Mr Custard said that is why Newton was unique in the field because a lot of other investment managers did not look for enough in the future.
“if you don't have this broader world view, this long-term worldview, it becomes very, very difficult to be able to get a competitive advantage in the market. And that's what we work on, we work on this thematic approach to be able to give us the clarity of foresight,” he said.
