About the Philosophy
Bluestone’s Investment Philosophy was created specifically for entrepreneurs so as to provide a framework for more effective investment decision-making and action. It is based on the following concepts:
Every Asset Should Have an Investment Objective
Being clear about objectives can promote more effective capital allocation – whether reinvesting in the business, buying real estate or adding to cash reserves. And clearly understanding the link between assets and objectives may result in more effective asset management – for example, making decisions about when to sell real estate or investment assets. The four main investment objectives are Reserves, Market Growth, Aspirational and Personal.
Every Entrepreneur is Different
There is no single “investment mix” that is right for every entrepreneur. For example, some entrepreneurs are comfortable with their business making up a large percentage of total net worth, while others seek diversification earlier in their entrepreneurial life. Some entrepreneurs prefer to hold large amounts of cash to offset business risk, while others prefer to have more of their cash invested.
What is important is that every entrepreneur be aware of their investment mix so that investment decisions can be made which are consistent with the entrepreneur’s overall wealth creation strategy.
Capital Allocation Can Be Flexible
We know that assets will move from one investment objective to another over time. For example, cash held as part of the Reserves objective may ultimately be used for Personal purposes, such as the purchase of a vacation home. Or, there may come a time when assets invested under the Market Growth objective will be required for spending. At that time, some or all of those Market Growth assets may be shifted to the Reserves objective.
Again, what’s most important is that when it comes time to make decisions about allocating capital and assigning specific objectives to assets, those decisions are made in the context of the entrepreneur’s total net worth and overall wealth creation strategy.