Each individual is unique in how we are made, how we are conditioned and how we interpret the experiences of life. As diverse as we are, so it should be in our approach to investing. You are unique and your investments need to be adapted for you. As part of our investing together, I will spend time with you to clearly understand you and your life goals in order to match the appropriate spread of investment instruments that fits you.
To be a successful investor, you need to invest time in understanding your investment personality, specifically an understanding of your emotional response to volatility, and your decision making process when faced with stressful money related issues. As part of our investing together, I will work with you, using proven tests, to understand your risk capacity & your investment personality as a key input into your investment strategy.
The best investors make money in imperfect condition in down, up or sideways trending markets, and in benign or volatile conditions. Using sophisticated strategies customised to your life goals and investment personality, we set the conditions for success, not the market. As part of our investing together, I will walk with you on your learning journey from simple towards sophisticated instruments to maximise your risk adjusted returns.
Case studies are condensed versions of real people and real situations. In my nearly 20 years as an investment adviser, I have come across a myriad of investors and life situations. These 5 cases are the most typical. If you see yourself in one of these or close to, please give me a call to discuss further.
Sam and Lisa have worked hard all their lives, saved diligently, and invested wisely. However, the GFC struck a financial and emotional blow and they find themselves having to delay some of their post retirement plans. Sam & Lisa needs recurring investment income and slowly rebuild trust in the markets
When Sam and Lisa came to see me, I felt that the most important thing for them is to acknowledge the emotional shift in their approach towards risk, given their retirement plans and the impact of the GFC. My advice to them was to shift the majority portion of their investment capital into low risk cash and fixed interest instruments AND to stay exposed to capital growth through blue chip Australian equities with proven dividend histories and reasonable growth potential.
Sam and Lisa now feels emotionally at ease and balanced. They can get on with most of their retirement plans, knowing they have adequate income for their daily needs, but also exposed to capital growth, ensuring that the value of their capital is not eroded through inflation.
John and Maggie are both working parents in their late thirties with 2 primary school going children. The family income enables them to live comfortably, but good cash flow management is key for John and Maggie. Investment wise, they need to build wealth but in instruments that allow for liquidity if needed.
Like many people their age, John and Maggie’s portfolio looks like a collection of opportunistic decisions - an inconsistently risk adjusted share portfolio, a small investment in several funds in their names and money sitting in 3 separate superannuation accounts. I helped consolidate ALL their personal investments and superannuation into one central hub, set up a CMT account for each (high interest, ease of liquidity) and invested the balance in two professionally managed portfolios; fixed interest (for income stability) and our Ord Minnett Australian Core Equities portfolio (for growth).
John and Maggie now feels that they have an intentional plan for their money and that it is being looked after professionally. The set up enables them to manage their cash flow better and participate in the share market easily and pick up occasional growth stocks in their super and personal investments when permitted by their finances.
Simon, in his mid- fifties, believes that his money should work as hard as he does. He has been investing over his working years, within his retirement account and outside. With his children mostly financially independent now and 10 to 15 more years before moving into retirement, Simon is looking to accelerate the growth of his investment capital.
Simon’s attitude towards investment risk is best described as balanced. Typically, investors would just pick a balanced fund and ‘set and forget’, which does not work when the entire market is going down and can take many years to recover from. As Simon is a diligent investor, my approach is much more active as I believe that nuances matter greatly in a balanced portfolio. Besides 40% for low risk cash and fixed interests, I recommended that Simon takes advantage of market movements and investment themes with the rest of his assets including a small amount in international shares.
With his active participation and his willingness to learn the use of more sophisticated financial instruments, Simon’s portfolio now provides returns in all market conditions and is better able to take advantage of investment themes and changes to market cycles.
Bob is a successful business owner. He figured that his successful skills in business building would translate into investment success. However, Bob has had varying success as his rewards did not always commensurate with his risk capacity. Bob needs a more disciplined approach to risk and trading for consistent results.
Utilising Bob’s quick learning abilities, I firstly worked with Bob to ensure that his base knowledge of the investment world is at a good working level. Bob’s capacity for risk also allowed me to recommend a two prong approach - a consistent return portfolio consisting of diversified Australian share portfolio overlaid with tactical options strategies AND trading strategies that allowed him the opportunity to profit from his views of the market.
Bob is enjoying his investment activities more. He feels more confident knowing that he is being guided by a much more experienced adviser using professional and disciplined approaches to translate his views into tradable ideas. His return now commensurate with his risk capacity.
Alvin is at the peak of his income generating years, with his clinics now gaining good local reputations. He earns far in excess of his peers at the maximum tax bracket and would like to be able to invest aggressively for growth so that he can slow down in a few years’ time and pay much less tax. However, he is extremely time poor.
Over the years, Alvin has had different investment advisers putting him in various tax reduction schemes usually around tax time. His portfolio consisted only of time poor investment assets like properties or managed funds. I advised Alvin that whilst tax minimisation is important, it cannot be the sole driving factor. My recommended approach was to build the portfolio over time with quality assets with a balanced focus on tax effectiveness, asset protection through hedging, and taking advantage of global opportunities - all consolidated onto one simple platform.
Alvin’s portfolio is still a work in progress but whatever is there now is chosen for its ability to both be tax effective AND make healthy returns. Being guided by one trusted adviser who constantly generates sophisticated trading ideas enables Alvin to make quick quality investment decisions despite being time poor.
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