What should you invest in?
You have some money and you want it to grow - so what should you invest in?
Have you ever wondered what actually makes something a good investment - and by extension, a good investment decision?
Professional investors spend their time researching their options, building shortlists, and waiting for assets to reach prices they like. They create and then stick to plans for their investments, which gives them confidence through different market conditions. They often have exit strategies too, like "I'll hold this until I make my money back," or "This trend should mature in three years, so I'll hold my investment at least until then."
Ultimately, your investment choices are up to you - so we want to explain how we do it at Spaceship and help you understand what we choose and why. It can give you some insight into the type of process you might follow if you don't choose to invest in Spaceship Voyager - or if you're looking to expand your investments outside of it.
Where the World is Going: The investment methodology to pick stocks for long-term growth
Where the World is Going (WWG) is the methodology the Spaceship Voyager Investment Team uses to choose which companies make it into the Spaceship Universe Portfolio and Spaceship Earth Portfolio. Let's take a look.
People invest in Spaceship Voyager portfolios to help their money grow over time.
The Spaceship Voyager Investment Team follows a strict methodology to make sure that only the companies they think have the best chances of long-term growth make it into the Spaceship Universe Portfolio and Spaceship Earth Portfolio.
(The Spaceship Origin Portfolio, Spaceship Explorer Portfolio, and Spaceship Galaxy Portfolio are structured slightly differently.)
We call this methodology Where the World is Going (WWG).
What is Where the World is Going (WWG)?
WWG is the investment methodology that the Spaceship Voyager Investment Team uses to select companies for the Spaceship Universe Portfolio and Spaceship Earth Portfolio. (For the Spaceship Earth Portfolio, companies must also have the potential to advance one or more of the United Nations Sustainable Development Goals.)
There are four parts to the WWG methodology
The Spaceship Voyager Investment Team assesses each company they're interested in against our Where the World is Going methodology, which is made up of four key considerations.
Does it follow a long-term trend?
Companies in the Spaceship Universe Portfolio and Spaceship Earth Portfolio are picked in part because we expect them to benefit from long-term trends. These trends are expected to see continued adoption and growth.
Examples of long-term trends include clean energy, fintech, and cloud computing.
Does it have a moat?
A moat is another word for the competitive advantages we look for in the companies we invest in.
The moats that we pay particular attention to at Spaceship include:
Does it have superior management?
We look for companies that are founder-led or run by management with an 'owner mentality'. Management can defend a company's existing competitive advantage while building new ones.
Can it double in five years?
Companies selected using the Where the World is Going methodology are picked because we think they'll grow at least 15% per year, or will double in stock price over five years.
What about the other Spaceship Voyager portfolios?
The Spaceship Universe Portfolio, Spaceship Earth Portfolio, and Spaceship Origin Portfolio (which is market cap based) target very high returns and are rated very high investment risk. This is in part because they're composed of 85-100% shares. Shares are one of the most volatile investment classes and also have the potential for some of the highest returns.
For investors seeking lower volatility or shorter timeframes, the Spaceship Galaxy Portfolio and Spaceship Explorer Portfolio are tailored to meet these needs.
The Spaceship Galaxy Portfolio also offers exposure to our Where the World is Going methodology. It aims to balance lower-risk investments such as bonds and cash with growth investments that meet our "WWG" criteria.
Of course, all investing comes with risks, and if you invest with Spaceship (or anyone), you should ensure you've read the PDS and TMD so you understand where your money is going. Performance is never guaranteed, and as markets go up and down, so too will the value of your investments.
The information in this article is prepared by Spaceship Capital Limited (ABN 67 621 011 649, AFSL 501605). It is general in nature as it has been prepared without taking account of your objectives, financial situation or needs.
